PHDCCI released its report, Impact of the West Asia Conflict on Indias Tourism, Aviation & Hospitality Sectors, highlighting significant disruptions across aviation, inbound tourism, hospitality and restaurant segments, even as strong domestic demand continues to support overall sector stability. Indias tourism and hospitality sector, which contributes nearly 8% to GDP and supports over 40 million jobs, is once again facing external shocks due to escalating geopolitical tensions. The report notes that while the sector had witnessed a strong V-shaped recovery in 2025, with branded hotel inventory nearing 200,000 rooms and domestic aviation traffic crossing 5 lakh passengers per day, the West Asia conflict in early 2026 has introduced fresh volatility.
The aviation sector has emerged as the most impacted, with airlines facing flight cancellations, airspace restrictions and significant rerouting of international flights. These disruptions have increased flying time by 24 hours on key routes, leading to a sharp rise in fuel consumption and operating costs. Industry estimates indicate that fuel accounts for 35-40% of airline operating costs and the ongoing situation has further strained airline profitability. The disruption of Middle East air corridors which is among the busiest global transit routes has also reduced connectivity efficiency and increased airfares.
The report highlights a 1520% decline in inbound tourist traffic, particularly in leisure travel, as global travellers adopt a cautious approach amid geopolitical uncertainty. Outbound travel patterns have also shifted, with Indian travellers increasingly preferring short-haul destinations such as Thailand, Singapore and Vietnam, while long-haul and transit-dependent routes have seen moderation due to geopolitical risks.
20/04/2026 Business Standard
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