A few months ago, Ishfaq Ahmad (30) entered the hospitality sector by securing the lease of a property in the scenic destination of Pahalgam. He paid the lessor ₹25 lakh for a hotel comprising 12 rooms.
Ahmad was looking forward to a booming tourism season, with all indicators pointing to significant growth in the sector.
Impact of terrorism on tourism
However, on April 22, a terror attack on tourists in the unruffled meadows of Baisarans shattered his business. Since then, the meadows have been dotted with security forces, meticulously sifting through every inch of the area to gather evidence and track down the terrorists.
“All the 12 rooms of my hotel are lying vacant with guests cancelling their bookings”, said Ahmad.
According to him, tourism is the most fragile sector in the Valley, and one should think multiple times before investing in it.
In the wake of the Pahalgam terror attack, the tourism sector is grappling not only with immediate financial losses but also with the psychological burden of violence.
Many young entrepreneurs are now reconsidering their plans to invest in the industry, given its fragility.
Ovais Mushtaq, a young adventure tourism entrepreneur, said that it was natural that incidents like the one in Pahalgam would discourage young entrepreneurs from investing in tourism.
“There is an uncertainty and it will continue until the ground situation improves”, he said.
However, Javed Ahmad Tenga, the President of Kashmir Chamber of Commerce and Industries ( KCCI) said it was too early to say anything.
“People invested corners in tourism infrastructure in the last few years. We remain hopeful that the industry will soon get back on track”, said Tenga.
He said that the Valley was in shock following the terror attack but expressed hope that the entire tourism sector, including startups, would revive soon.
Startup boom
Over the last few years, Jammu and Kashmir’s startup ecosystem has seen significant growth with the introduction of the J&K startup policy. The policy provides financial assistance, including seed funding, patent support, and help with registration facilitated by the Department for Promotion of Industry and Internal Trade (DPIIT). Since 2020, the region has witnessed a 287 per cent increase in startups, with tourism emerging as a key growth sector.
The official data suggest that the number of startups increased from 237 in 2020 to 917 in 2024.
According to the Economic Survey 2024-2025, Jammu and Kashmir recorded a mass influx of tourists, with 2.36 crore, including 0.65 lakh foreigners, 5.12 lakh Amarnath pilgrims, and 94.56 lakh Vaishnav Devi pilgrims visiting the area in 2024.
Homestays
“I wanted to register my house under the government’s homestay policy, but the recent attack has prompted me to change my mind. An untoward incident could land you in serious trouble”, said an unemployed youth, declining to be quoted by his name.
Given the surge in tourist arrivals, the government promoted tented accommodations and homestays at various locations. Under the homestays, 2,246 were registered, with a total bed capacity of 16,455. In outlying and virgin destinations like Gurez valley, the homestays quickly gained popularity.
However, the April 22 terror strike prompted the government to shut nearly 48 tourist destinations, particularly off-beat sites, that held huge potential for adventure tourism and local economic growth.