Small towns in India have undergone notable changes in their social and economic landscapes, shaped by urbanisation, rising incomes, and changing social practices. One of the most visible transformation is banquet halls, which have become central to the social life of these towns.

Since February 2024, I have been on the field, collecting data for the study titled Growth Dynamics and Regional Transformation Potential of Small Towns: 40 Years’ Development Saga of Dhampur, India. Dhampur, located in western part of Uttar Pradesh. The population of Dhampur is 50,997 with Hindu 49.63% and Muslims 47.97% (Population census, 2011) and is known for its agriculture and industries particularly Dhampur Sugar Mill. During our visit, I noticed a significant number of banquet halls in the town and its surroundings’, particularly near highways. I wondered why there are so many banquet halls in a small town and their surroundings. To gather more information, I met owners of two banquet halls namely:  – Shubham Mandapam and Gulmohar Palace.

Shubham Mandapam, established almost four decades ago in 1986 by late Shri Mukesh Jain, who started it as a tent and lighting business for weddings and other functions. Over time, it evolved into a banquet hall to fulfil the demand for well-organized, larger-scale events in Dhampur. It is currently managed by Mr. Naman Jain, son of late Shri Mukesh Jain. According to Mr. Jain, the banquet hall industry in Dhampur has seen huge growth in the last few years. He mentioned that at present there are 24 banquet halls within a 10-kilometer radius of the town, with three of these halls located inside Dhampur town itself. Shubham Mandapam operates on 1.25 acres of leased land, for which they pay an annual rent of ₹3.5 lakh to Sitapur Gandhi Netra Chikitsalaya. Because the land is leased, the structures are not permanent; the hall consists of five rooms with tin roofs and an open space used for large gatherings. Despite its long-standing presence in the town, Shubham Mandapam has seen a decline in the number of weddings it hosts. Ten years ago, they used to handle between 100 to 120 weddings annually; today, that number has dropped to around 60. The growth of competitors has made it more challenging to maintain their market share. The rest of the time, the hall is used for birthday parties, anniversary celebrations and other social events such as ‘kirtan’. Besides these events, they also rent the space to a magician for his shows, which run for a month, and to traders for weekly bazaars. Altogether, the banquet hall is in use for around 300 days a year and rest of the days are kept for maintenance.

In contrast to Shubham Mandapam’s organic growth from a tent business, Gulmohar Palace is a modern and planned investment, it caters to the town’s growing demand for upscale event venues. The family behind the venture has long-standing roots in the region. It was established in 2007 by the brother of Mr. Dheeresh Agarwal, who is currently running a shoe store in Dhampur town. Mr. Agarwal was a cricketer and a government employee at ONGC and the Reserve Bank of India and later worked in United India Insurance Company Limited in Dhampur. His grandfather was a zamindar and also ran a sugar crusher from 1950 to 1978. His father was the chairman of the Dhampur Municipal Council and he was also arms dealer and operated a stone crusher, which was closed in 2005. Gulmohar is currently managed by Mr. Agarwal’s elder son, Mr. Mayank Agarwal. Their decision to enter the hospitality industry was because they saw a growing demand for quality venues for weddings and other social events.

Gulmohar Palace was designed with modern sensibilities in mind. To start the banquet, Mr. Agarwal’s family spent 90 lakh rupees, of which they took a 50 lakh rupee loan from the State Bank of India at an interest rate of 12.5%, and for the rest of amount they used their savings. This shows the diversification of capital into new economic activity. The banquet offers 9 rooms, a hall, and an open ground. It also has a family restaurant, which is one of the well-known dining spots in the town. Its establishment reflects the town’s changing aspirations and the increasing expectations of its more affluent residents. Managed by a retired government official, the hall has become a central part of Dhampur’s social scene. While the initial investment in Gulmohar Palace was substantial, the venue has continued to grow in popularity, with plans to expand further by adding additional rooms to accommodate guests.

The increase in banquet halls in Dhampur reflects larger economic and social changes that may be happening in small towns throughout India. Both owners of banquet halls mentioned various reason for the demand for banquet halls.

Population growth: As the population increases in urban areas, the number of weddings also rises, leading to a higher demand for event venues.

Impact of urbanisation

As cities expand and penetrate nearby rural areas, villages around Dhampur are increasingly exposed to urban lifestyles and social practices. This exposure is one of the major reason behind the shift from home gatherings for family celebrations and weddings to using a banquet hall. Improved roads, better public transport and higher personal means of transport ownership such as car, motor bike, tractor etc. have enhanced connectivity between rural and urban areas and it is another important reason behind this shift that enables residents of nearby villages to come to the town to attend social celebration in these banquet halls.

Convenience

Hosting events in banquet halls is seen as more convenient, as it reduces the logistical challenges of arranging tents and other necessities at home.

Additionally, fewer people are available to assist in managing larger occasions, making banquet halls a more practical choice.

Changing social trends

Previously, weddings involved extended family participation over several days. Now, guests tend to arrive on the wedding day itself, leading to a preference for well-organized, shorter-duration events.

Impact of increased disposable income

Demand of banquet hall is supported by the increase in disposable incomes. Economic growth in cities has allowed families to spend more on weddings and celebrations, and this trend is also spreading to smaller towns. Even in rural areas, rising incomes of farmers due to agro-based industries and remittances from family members working in cities have contributed to the growing demand for banquet halls.

Impact of higher education

The younger generations prefer more organized events which has increased the demand of banquet halls. Higher education has played a key role in shaping these aspirations. As more people become educated, their exposure to new ideas and modern practices increases. They are influenced by city life and want to bring that level of change to their own celebrations.

Operational challenges

Mr. Jain highlights that running a banquet hall may seem like a profitable business, many entrepreneurs underestimate the operational costs involved. The owner has to follow the rules and regulations and have to register for multiple licences, like – to take NOCs from fire department, electricity board and FSSAI also they have to register for GST and MSME.

In terms of taxation both the banquet hall has to pay GST and every year they have to pay Rs 8000 under Sarai Act additionally they have to pay property tax, since Shubham Mandapam operates on leased land and does not have permanent structures, it is exempt from property taxes. However, Gulmohar Palace has to pay property tax for its permanent structure.

One of the biggest challenges these venues face is workforce management. Both halls rely heavily on informal labor, particularly for events. Shubham Mandapam employs four permanent workers for cleaning and maintenance, and hires additional staff on an as-needed basis from Dhampur tehsil. On the other hand, Gulmohar Palace employs 25 permanent workers, 80% of them are from Nepal, with the rest come from Dhampur and nearby areas. It has been noticed that in food sector most of the workers are from Nepal.

Managing a temporary workforce poses several difficulties, including inconsistency in service quality and the logistical challenges of providing food and lodging for the workers for permanent workers. The owners of both banquet halls noted that all the working group are of male workers, the entrepreneurs mentioned, it’s very challenging to hire female workers because safety for women is still a major concern in this field.

The growth of banquet halls in Dhampur is a small example of the bigger changes happening in small towns across India. These banquet halls create jobs and represent modern living and social status, showing how the people of Dhampur are changing their hopes and dreams. As Dhampur continues to grow, the banquet hall industry will play a big role in shaping the town’s social and economic life as it is likely to help in other small town and surrounding villages across India.