Under the Uttar Pradesh Tourism Policy 2022, the state has received investment proposals to the tune of Rs 1 trillion in the hospitality sector in the last two years, according to government officials. The proposals were received after the state organised the Global Investors Summit in February 2023. The state's tourism policy seeks to ramp up tourism infrastructure and hospitality properties across UP in partnership with the private sector.

The proposed investments pertain to hotels, resorts, guesthouses, wellness centres, and homestays across 75 districts of the state, according to Mukesh Kumar Meshram, principal secretary, tourism & culture, UP.

Most of the investment is proposed in religious and spiritual centres such as Varanasi, Ayodhya and Prayagraj apart from traditional tourism hotspots like Lucknow, Agra, Kanpur, and Noida. While 10 new hotels are coming up in Ayodhya, a dozen properties are being developed in Varanasi.

After the consecration of Lord Ram temple early last year, Ayodhya has emerged as one of the top tourist destinations in the state. The temple town welcomed 16.4 million pilgrims in 2024, a rise of over 10 million compared to a year before.

Indian Hotels Company (IHCL), which operates the flagship Taj Group of Hotels, recently announced the signing of a luxury Taj property in Ayodhya in association with the Solitaire Group.

Puneet Chhatwal, managing director and chief executive officer, IHCL, said the company will now have 31 hotels in UP, including 18 under the development phase, which reflected the rising profile of the state in the domestic tourism landscape.

UP receives the largest number of domestic tourists in India. The state has a total of about 190,000 hotel rooms, of which 4,000 are categorised as quality rooms. It is looking to add 200,000 new hotel rooms to its hospitality inventory, with primary focus being on Varanasi, Ayodhya, Prayagraj, Agra, Mathura, Gorakhpur, and the Buddhist Circuit. This is expected to generate 300,000 new job opportunities.

The state government is betting big on tourism to feed its overarching $1 trillion economy goal. UP’s annual tourist footfall is estimated to touch 850 million by 2028. In 2024, the state recorded a tourist inflow of 650 million, a growth of 17 per cent from 480 million in the previous year, according to latest figures released by the state tourism department.