Kashmir Tourism in Crisis: Empty Hotels, Silent Lakes, and a Struggling Industry

Kashmir Tourism in Crisis: Why Hotels Are Empty and Operators Are Struggling

By: Javid Amin | 22 October 2025

The picturesque valleys of Kashmir Valley — their shimmering lakes, snow-draped peaks and lush meadows — have long been a magnet for travellers from across India and abroad. Once branded “Paradise on Earth,” the region’s tourism sector has grown rapidly in recent years. But today, a harsh reality is staring the industry in the face: empty hotel lobbies, silent shikara boats, idle taxi drivers and livelihoods teetering on the brink.

Ground-reports confirm what local operators feared: many hotels are operating at below 20% occupancy, while some are essentially deserted. The sudden collapse of tourist demand is not merely a seasonal dip — it reflects a deep structural shock with far-reaching implications for the valley’s economy.

In this article, we explore why the collapse has occurred, the ground reality of its impact, how the economy is being hit beyond hotels, and what must be done to revive Kashmir tourism. We have cross-verified key facts from multiple credible sources, to present a comprehensive picture of what is happening in the region.

The High Before the Low: A Brief Background of Tourism in Kashmir

Before diving into the crisis, it is important to set the context: how tourism in the union territory of Jammu & Kashmir (J&K) soared, and how vulnerable the model has proved to sudden shocks.

01. Growth in Tourist Inflows

In recent years, J&K recorded strong growth in tourist visits. Though exact numbers vary by source, one widely cited statistic is that tourist arrivals hit over 2.3 crore (23 million+) visitors in 2024 across both domestic and international segments. The expansion of road and air connectivity, infrastructure investments (such as under the Swadesh Darshan Scheme) and aggressive marketing of Kashmir as a safe holiday destination helped fuel this surge.

Hotels, guest-houses, houseboats, tour operators, taxi services and local handicraft sellers all prospered. The economic multiplier effect of tourism in the valley became significant: one estimate suggested tourism and allied businesses supported thousands of families, many of them in informal sectors.

02. Vulnerabilities and Dependencies

However, with growth came high dependency. The region’s tourism model is built on several factors that make it particularly vulnerable to disruptions:

Security perception: Because of the historical insurgency and proximity to the Line of Control, visitor confidence is sensitive to any outbreak of violence or unrest.
Geography & infrastructure: Many tourist destinations in Kashmir are remote, accessible only through mountain roads prone to landslides, closures and weather-related disruptions.
Seasonality and concentrated destinations: Popular spots like Gulmarg, Pahalgam and the houseboats on Dal Lake attract large chunk of tourists — meaning downturns here hit the entire region.
Informal employment linkages: Many jobs tied to tourism (shikara operators, pony ride guides, street vendors) are informal and have little buffer when business drops off.
Perception vs reality gap: Although infrastructure improved, local stakeholders noted that roads still faced disruptions, and security bottlenecks could trigger cascading cancellations.

Thus, while the boom years were real, the sector’s underlying fragility meant a sharp negative event could cause outsized damage.

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What Went Wrong? Key Drivers of the Collapse

The collapse of tourism in Kashmir cannot be attributed to a single cause. Instead a confluence of security shocks, economic stress in other sectors, and infrastructure bottlenecks have combined to create a perfect storm. Let us unpack the major drivers.

01. Security Concerns — The Trigger

The most immediate shock was the deadly attack in the meadow of Baisaran near Pahalgam on 22 April 2025, where 26 people — mostly tourists — were killed by militants.

This incident triggered:

A sharp decline in visitor confidence, both domestic and international.
A security response that included the closure of 48 out of 87 tourist sites in the valley.
Media coverage that amplified fear and uncertainty.
Travel advisories from foreign governments (US, UK) cautioning against travel to the region.

As reported by multiple outlets:

“Tourist arrivals dropped from 179,342 visitors in April to just 6,951 by May 18… a collapse that has sent shock-waves through an industry that forms the backbone of Kashmir’s economy.”

Another source notes, “Occupancy rates plummeted and graphic media coverage deepened public fear.”

02. Infrastructure and Access Problems

Beyond security, travel to and within Kashmir remains vulnerable to disruptions — especially the key arterial route: the Jammu–Srinagar National Highway (NH-44). Landslides, heavy snowfall, traffic restrictions or military/security movements often block or delay the highway.

A 2025 editorial noted that although the marketing of the region emphasised “normalcy,” access to large parts of the valley remained restricted or uncertain.

Moreover, remote or off-beat tourist spots which had been opened up recently remained closed or under threat, limiting new growth avenues for tourism.

Thus, even when tourists showed interest, logistical uncertainties made travel riskier — compounding the downward spiral.

03. Economic Shocks Beyond Tourism

Tourism in Kashmir does not work in isolation. Many families and businesses have diversified incomes — combining hospitality, handicrafts, horticulture (especially apple cultivation) and transport services.

The summary mentions the apple industry crisis; while I found less public data on current apple yields or pricing crashes, it is widely reported in local news that horticulture remains under pressure (due to weather, pest attacks and market access). The combined shock of horticulture + tourism double-whammy squeezes liquidity across households.

In short: when tourism incomes fall, those informal labourers and small-business operators cannot easily switch to horticulture. And if horticulture itself is under stress, the cumulative burden is heavy.

04. Confidence and Demand Erosion

One of the subtler but most damaging factors is the erosion of demand. Even if conditions are stabilising, once tourist confidence is lost, rebound is slow. As one report put it:

“The silence is haunting … we wait all day for tourists who never come.”

Operators noted cancellation rates of 70-95% and bookings wiped out for months ahead.

Rebuilding that confidence takes more than just saying “we are safe”; it needs visible tourist arrivals, positive social proof and targeted promotion — all of which have been lacking so far.

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Ground Reality: What the Numbers & Voices Say

Let us move from causes to a detailed assessment of the ground-situation: how bad is the downturn, who is being hit, and which parts of the value chain are under threat.

01. Hotel Occupancy and Booking Figures

According to one recent study:

Hotels in the valley are reporting occupancy rates below 20%, far lower than the 70-90% levels seen in healthy seasons.
One sample hotel in Srinagar reported that out of 45 rooms, only 2 were occupied — 43 empty rooms.
Tourist arrivals via air: in mid-April the daily arrival number was ~9,000–10,000; by early May, it dropped to 3,600 in one day; some days saw near-zero arrival.

These figures suggest not just a dip, but a near-collapse of the demand pipeline.

02. Impact on Service & Allied Sectors

The impact ripples out to all sectors tied to tourism:

Shikara operators on Dal Lake: Many are idle, their boats tied up, their daily earnings down to a fraction of what they used to make.
Taxi and tourist-vehicle drivers: With far fewer visitors, transport demand has evaporated.
Houseboats and guesthouses: Some are functioning at loss; others are closed outright.
Street vendors, handicraft shops, restaurants near tourist hubs: These have reduced operating hours, fewer clients, or are shuttered. For example, one ice-cream vendor near Boulevard Road said he normally earned ~₹3,000/day, now only ~₹500.
Financial stress: Many tourism-related businesses are defaulting on loans, staff have been laid off, bank-accounts turning into NPAs.

03. Who is Being Hit — Lives & Livelihoods

Many of the people being hit hardest are in the informal economy: daily wage earners, small boat owners, pony-ride guides, seasonal staff in hotels. The lack of a formal safety net makes them vulnerable.

Showket Ahmad, a hotel-owner in Srinagar, reported losses of ~₹10 lakh and had to retain only 3 of 15 staff.
Even migrant workers and housekeeping staff in hotels have lost jobs.
Local families relying on tourism incomes face cascading challenges: school fees, debt repayments, daily expenses.

04. Regional Spread: Key Destinations & Access Points

While Srinagar remains central, key destinations like Gulmarg, Pahalgam, Sonamarg and other off-beat meadows are particularly affected:

Many remote spots were closed for security reasons after April.
The houseboat economy in Dal Lake is eerily quiet; even the scenic icon of the valley reflects the downturn.

05. The Overall Economic Impact

The broader economic fallout is significant: tourism is often described as the “backbone” of Kashmir’s economy, supporting not just direct lodging/tourism jobs but transport, horticulture linkages, handicrafts, local supply chains.

With such a collapse:

Local businesses face insolvency.
Regional employment goes into reverse.
Public and private investment plans stall.
The region’s image suffers longer-term damage.

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Why Recovery Is Not Happening Faster

Given the depth of the downturn, why is tourism in Kashmir still not bouncing back quickly? Several factors explain the sluggish recovery.

01. Residual Fear and Market Perception

Even when certain security conditions stabilise, the traveller mindset takes time to correct. The narrative of “risk” builds quickly and unwinds slowly. Media reports of the April attack, combined with foreign advisories, cloud the region’s image. Already, studies show fewer new bookings and tourist interest remains low.

02. Partial Access and Mixed Signals

Despite statements of normalcy, many tourist destinations remain closed or operate under restricted access. For example, off-beat treks and meadows remain under security review. This sends mixed messages: tourists may think “if parts are closed, maybe the region is still unsafe.”

03. Lack of Immediate Cash Flow Relief

Small enterprise operators — hotels, houseboats, shikara owners, taxi drivers — face immediate cash flow issues: salary obligations, loan servicing, maintenance costs. Without relief or bridge finances, many may go under before the demand returns. The summary of the problem mentions this explicitly as “support packages” being needed.

04. Infrastructure & Accessibility Gaps Persist

Structural bottlenecks like highway disruptions, landslides, seasonal closures still plague the region. This undermines the proposition of reliable travel. Many tourists prefer destinations with guaranteed access — so this becomes a competitive disadvantage.

05. Uncoordinated Marketing and Messaging

Finally, while the government and trade bodies have begun talking of revival campaigns, on-the-ground execution appears fragmented. The valley competes with other tourist destinations in India and abroad which are investing aggressively in marketing. Kashmir’s unique selling proposition is also its vulnerability — meaning any setback erodes the brand.

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What Needs to Be Done — A Roadmap for Revival

Drawing on ground reports and business/socioeconomic logic, here is a proposed roadmap for what must happen to revive tourism in Kashmir sustainably.

01. Immediate Confidence-Building Measures

High-profile endorsements: A strong public endorsement of safety by political and business leaders can help. The industry is calling for a “voice of trust”.
Transparent communication: Clear updates on what destinations are open, what security measures are in place, visuals of real tourist arrivals matter more than slogans.
Incentivised travel offers: Early-bird offers, packaged deals for domestic tourists, “safe-return” assurances (e.g., insurance coverage) can trigger bookings.
Remove access bottlenecks: Clear the major infrastructure constraints (e.g., ensure NH-44 is kept open, rapid landslide mitigation, real-time travel alerts).

02. Targeted Marketing & Product Diversification

Domestic tourism push: Given international visitor numbers will lag, focus on India-based travellers, especially metro centres. Highlight “off-season” opportunities.
Niche experiences: Promote houseboats, shikara rides, agro-tourism (apple orchards), winter sports, heritage walks — so the region’s appeal is broadened.
Digital storytelling: Use social media, travel-vlogs, influencer partnerships to rebuild the “Kashmir as paradise” narrative with authentic voices.
Promote new destinations: Open up and promote less‐crowded scenic spots to differentiate from mass tourism and spread the load.

03. Financial & Institutional Support for Stakeholders

Relief/bridge funding: Hospitality operators, houseboat owners, shikara drivers, taxi services need targeted financial relief (low-interest loans, tax breaks, wage subsidies) to survive the trough.
Skill and employment support: Retrain or upskill staff in hospitality, digital guest management, foreign languages, eco-tourism so they remain employable.
Allied business support: Small handicraft shops, vendors, supply chain companies must be assisted, possibly via government cluster-support programmes.
Stakeholder forum coordination: Trade bodies (hotelier associations, transport unions) should coordinate with government to align on messaging and operational support. For example, the newly formed Jammu & Kashmir Tourism & Allied Business Forum (JKTABF) is a step in that direction.

04. Structural & Long-Term Reforms

Resilient infrastructure: Invest in all-weather connectivity, alternate access routes to meadows, real-time travel-info systems, digital booking platforms.
Enhanced safety and security protocols: Visible security presence at major tourist hubs, tourist-friendly police cells or help desks, emergency access.
Diversified tourism model: Reduce over-dependence on a few destinations; develop rural tourism circuits, wellness tourism, hill-adventure segments.
Brand repositioning & sustainability: Build Kashmir tourism as a sustainable, experiential destination (rather than just scenic holiday spot), emphasising culture, local participation, off-peak tourism.
Monitoring & data-driven decision-making: Track occupancy, visitor sentiment, cancellations, infrastructure bottlenecks in real-time to respond proactively.

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Regional and Socioeconomic Implications

The tourism downturn in Kashmir is not just a “business problem” — its socioeconomic implications are profound and deserve careful attention.

01. Job Loss & Informal Economy Risk

With hotel occupancy collapsing and allied sectors idling, large numbers of informal workers face income loss. This includes shikara operators, houseboat staff, taxi drivers, street vendors and seasonal workers. This unemployment risk is particularly acute because many of these individuals lack formal employment contracts, pension benefits, or alternative livelihoods.

The contraction in incomes has knock-on effects: reduced consumer spending, increasing defaults on loans, and potentially rising indebtedness among households.

02. Regional Economic Slowdown

Since tourism is a key driver of the local economy in Kashmir, its collapse could drag down regional GDP growth, investment inflows, and public revenue (through hotel taxes, tourism fees). Smaller towns dependent on tourism-related supply chains (e.g., food provisioning, local transport, handicrafts) are especially vulnerable to being left behind in the recovery.

03. Migration and Youth Unemployment

Young people in Kashmir, who had been drawn into tourism-related employment or entrepreneurial activity (guesthouses, local guiding, handicrafts), now confront a shrinking opportunity pool. If the downturn persists, there is a risk of outward migration of youth, or worse, their disenchantment with the region’s economic prospects — which has broader social consequences.

04. Interlinkage with Horticulture & Agriculture

As noted earlier, many households in Kashmir combine income from tourism and horticulture (especially apples). A tourism collapse therefore increases pressure on horticulture incomes, which themselves face climate, logistics and market challenges. The double shock can push households into deep vulnerability or force shifts into other sectors, perhaps at lower income levels.

05. Long-Term Image & Investment Impact

The damage to tourism extends beyond current season losses: the region’s image as a safe, stable travel destination has been shaken. Investors (hoteliers, tour operators, infrastructure developers) may delay or cancel expansion plans. Recovery lags thus could lock in a prolonged period of under-utilised capacity and depressed earnings.

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Case Studies & Voices from the Valley

Here, we bring in direct voices and lived experiences from the tourism value chain to illustrate the human dimension of the crisis.

01. Hotelier in Srinagar

A manager of a Srinagar hotel (45 rooms) described the abrupt shift:

“Just weeks ago, we had full bookings stretching months ahead. Today, 43 rooms are vacant. We’re lucky if we get one guest a week.”
He explained that hotel costs (staff salaries, utilities, maintenance) remained constant, but revenue had evaporated — making the operation loss-making.

02. Shikara Operator on Dal Lake

A shikara operator near Dalgate, Srinagar shared:

“The silence is haunting. We wait all day for tourists who never come.”
With no bookings, he told how he sometimes ties his boat for days, taking just odd jobs to survive.

03. Street Vendor on Boulevard Road

Shahnawaz, a 10-year veteran ice-cream street vendor, said:

“I used to earn about ₹3,000 a day. Now I’m lucky if I earn ₹500. I have six people depending on me — school fees, tuition, daily expenses.”
His story illustrates how deeply informal livelihoods are hit.

04. Hotel & Restaurant Industry Bodies

Trade associations including the Jammu & Kashmir Hotel & Restaurant Association (JKHARA) and the JKTABF have voiced alarm:

“Tourism is at its lowest ebb in decades… immediate action, financial support and strong promotional campaigns are necessary to restore tourist confidence.”

They emphasise that the problem is systemic and demands coordinated response.

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Comparative Perspective: Kashmir vs Competitors

It’s instructive to compare how other mountain/tourist destinations behave when faced with adversity — and what Kashmir might learn.

01. Case of Ladakh

An editorial piece contrasted Kashmir with neighbouring Ladakh:

“While hotel occupancy in Kashmir hovers below 20%, Ladakh is forging ahead with new infrastructure and tourism positioning.”
Ladakh’s strategy includes diversification (eco-tourism, astro-tourism), improved connectivity (e.g., new roads) and branding. The implication: tourism recovery is possible with the right structural approach.

02. Lessons for Kashmir

Diversify beyond the mainstay spots (Pahalgam, Gulmarg) into lesser-known circuits.
Promote value-added experiences (wellness, culture, adventure) rather than just scenery.
Invest in fail-safe infrastructure to reduce travel risk perception.
Develop flexible pricing/off-peak offers to stimulate demand in lean times.

Risks & Challenges Ahead

Revival is possible — but there are clear risks that must not be overlooked.

01. Recurrence of Security or Access Disruption

If another major security incident occurs or a key highway is blocked for extended time, the fragile recovery could be reversed.

02. Debt and Bankruptcy of Operators

If hotels, houseboats and tourism businesses collapse en masse, the supply-side capacity will shrink and recovery will be slower. A wave of insolvencies could lock the region into lower-growth for years.

03. Climate & Environmental Risks

Mountain regions like Kashmir are vulnerable to weather shocks (landslides, snowfall blockages) and climate change effects — which means instability may not just be security-driven.

04. Brand Damage & Long-Term Demand Loss

Tourists may perceive Kashmir as “risky” for a long time — especially international travellers. Reversing that requires persistent marketing, visible arrivals and safety assurances. Any mis-step in the narrative could prolong damage.

05. Funding & Policy Gaps

If policy support (financial relief, infrastructure investment, marketing budgets) is inadequate or delayed, the recovery will stall. Small operators may be the first to drop out.

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Bottom-Line: The Road Ahead for Kashmir Tourism

The tourism crisis unfolding in Kashmir is more than a cyclical dip — it is a structural shock that threatens livelihoods, regional growth and the sustainability of a key economic sector. Hotels are nearly empty, shikara boats sit idle, taxi drivers wait for bookings that never come, and the ripple effects are broader than just the hospitality industry.

Yet, revival is not out of reach. The combination of Kashmir’s natural allure, cultural heritage and renewed infrastructure still offers a strong platform — provided the sector adapts, rebuilds confidence, diversifies offerings and receives timely policy support.

For the region to bounce back, it will require:

Visible and sustained confidence-building efforts.
Aggressive and smart marketing targeted at domestic and eventually international travellers.
Financial relief and restructuring to keep the supply-side alive.
Infrastructure and accessibility upgrades to reduce travel risk.
A shift toward diversified tourism products and less dependency on only a few hotspots.

If executed well, Kashmir could turn through this crisis and emerge with a stronger, more resilient tourism sector. But timing matters: the longer the slump lasts, the greater the damage to businesses, jobs and regional investor sentiment. For the people of Kashmir — from hotel managers to shikara operators to street vendors — the months ahead will be critical.