Pahalgam attack to derail immediate hotel openings as Brand Kashmir takes a hit

Hotels checking in

The state-turned union territory has always been on the bucket list of most Indian tourists. However, years of militancy had delivered a blow to the state's travel and ancillary industries before picking up smartly of late. However, the latest attack is another setback.

Jammu and Kashmir had around 1,998 hotels as of January 2025, noted Thakkar, who added that hotel inventory had recorded a 3.73 percent growth since 2023.

"The Kashmir Valley’s branded hotel room count has risen from under 200 to over 850 by 2022–23, with over 1,000 hotels in the pipeline, signalling over a 100 percent increase. The region currently offers 62,488 registered tourist beds across hotels, guest houses and houseboats. Additionally, a major homestay initiative aims to add 55,000 rooms," he added.

According to hospitality advisory service HVS Anarock's data, current branded hotel supply in Jammu and Kashmir is around 3,000 keys (keys refers to the number of individual lodging units) which by 2029 is expected to increase to over 1,200 keys.

Several prominent hotel brands are either operating in Jammu and Kashmir or planning to expand there, said K Syama Raju, president, Federation of Hotel and Restaurant Associations of India). These include Radisson, ITC Hotels, Lemon Tree Hotels, Sarovar, The LaLiT Grand Palace, Welcomhotel by ITC Hotels, and The Khyber Himalayan Resort & Spa. Radisson, in particular, has multiple properties such as the Radisson Collection Hotel & Spa in Srinagar and the Radisson Golf Resort in Pahalgam, he added.

Some of the major hotel openings in the last couple of years include Radisson Riverfront Srinagar which is known as the largest hotel in J&K and was launched in April 2024, Radisson Hotel Sonamarg opened in 2023, while Indian Hotels launched Vivanta Jammu in June 2023 and Ginger Srinagar in September 2024.

Chains like Radisson, IHG Hotels and Resorts (the InterContinental group) and Marriott have projects in the pipeline, with IHG entering the region for the first time, pointed out Thakkar.

The Fern Hotels & Resorts announced the signing of five new hotels in the Valley. Marriott's recent expansion includes J&K as part of its broader India growth. The government is also facilitating development, with proposals for multiple five-star hotels and over 1,000 branded rooms planned, doubling the current supply in the Kashmir Valley, he added.

"Overall, at least five new hotels are confirmed. In addition, J&K is developing 75 new tourist destinations, 75 heritage/cultural sites, 75 Sufism/religious sites and 75 adventure treks/sites potentially attracting tourists for all the four seasons," Thakkar said.

Over Rs 1.69 lakh crore in investment proposals were received, many in tourism, following the abrogation of Article 370. These investments have the potential to create employment for around 5.9 lakh individuals, with tourism being a key sector, noted Thakkar. "Currently, the tourism contribution to GSDP (gross state domestic product) is 7–8 percent and the goal is to increase to at least 15 percent over the next four to five years," he added.

Traveller confidence shaken

However, the attack has derailed the momentum, stakeholders say, and at a time when hotels were running full at premium pricing.

"In the post-pandemic period, Jammu and Kashmir's hotel industry made a strong comeback, with occupancy rates reaching 82 to 85 percent in 2023, surpassing pre-pandemic levels. At the same time, premium hotel room rates crossed Rs 30,000, reflecting high demand and the region's growing appeal as a luxury travel destination. These trends positioned J&K as a lucrative market for hospitality investments," Sanghi said.

The attack in Pahalgam has momentarily undone months of narrative-building and confidence restoration, said Vandana Singh, chairperson, aviation cargo wing, Federation of Aviation Industry In India.

"Tourism is perception-sensitive, and such events cast long shadows. In the short term, we are looking at significant revenue loss for local hoteliers, travel operators and aviation carriers servicing the region. The informal sector—taxi drivers, guides, homestays—will be hardest hit. The long-term risk is even greater: reputational regression. Global and domestic travellers need consistency. One major incident can undo multiple years of progress, especially in a destination that had only recently begun attracting high-value experiential tourists," she said.

Tourist arrivals in the union territory increased from 1.6 crore in 2019 to 2.1 crore in 2023 which increased to 2.3 crore last year. This year too tourism started on a strong note with 8.14 lakh visitors visiting Srinagar’s Tulip Garden in just 26 days.

While the region had begun shedding its conflict-driven identity and was repositioning itself as a refined, experience-rich destination over the past few years, the attack has shaken the traveller's confidence, said Singh.

"Preliminary data from travel aggregators and local hospitality bodies indicate a 35–40 percent drop in hotel bookings across key destinations in Jammu and Kashmir within 48 hours of the attack. Airlines have also reported a notable uptick in cancellation requests on Srinagar-bound routes. This is a clear reflection of shaken traveller confidence," she added.

RARE India which has a collection of luxury hotels across India promotes two hotels in Srinagar where they have seen cancellations, said founder Shoba Rudra.

Pradeep Shetty, Spokesperson, HRAWI (Hotel And Restaurant Association (Western India)  thinks that international travellers may exhibit short-term caution.

Blow to tourism

The emotional and economic backlash will be huge and be known only with time, said KB Kachru, president, Hotel Association of India, and chairman, South Asia, Radisson Hotel Group.

Arjun Baljee, president, Royal Orchid Hotels, said that the region had seen a steady upswing with an eightfold surge in visitors from 2020 to 2024. "However, the Pahalgam attack will sow fear in the tourists who want to visit this beautiful region and set it back in the near term," he said.

Rajiv Mehra, general secretary of FAITH (Federation of Associations in Indian Tourism & Hospitality) highlighted the importance of tourism for the people of the area. "For them, tourism is not just a livelihood, it is their pride, their legacy and their hope. This attack has not only harmed innocent lives but has also dealt a cruel blow to the thousands of families who depend on tourism to survive. From houseboat owners and hoteliers to local guides and artisans, every individual in this chain is affected," he pointed out.

Amid the uncertainty, there is a silver lining—the people's resilience. Analysts and hoteliers expect the impact of the attack to be for the short term and not likely to result in a complete withdrawal or cancellation of hotel projects as the region continues to hold long-term potential as a premier tourism destination.

"If we allow fear to shape our decisions, we give power to those who seek to disrupt peace through such acts. In fact, this is precisely why we are keen on partnering with local hoteliers in the region to put up hotels in Jammu & Kashmir," said Satyen Jain, chairman and managing director, Pride Hotels Group.

While tourism in the region may face a temporary setback, with the support of the government and local communities, both peace and tourism will return stronger than before and allow Kashmir to thrive once again as a destination of choice, said Rama Mahendru, country general manager, India, Intrepid Travel.