West Asia conflict disrupts aviation, leads to 15–20% dip in inbound tourist traffic; Rs. 18,000 crore net loss for industry: PHDCCI report10% restaurants closed down, business down by Rs. 79,000 crore per month

provide stability. However, margin compression remains a key concern, especially for small and mid-sized operators.

 

Despite these challenges, domestic tourism continues to act as the primary growth engine, cushioning the sector against global disruptions. Travel trends such as revenge travel, staycations, bizcations and experiential dining are sustaining demand across hotels, airlines and restaurants.

 

To mitigate the impact and strengthen sector resilience, the report outlines several key policy recommendations. These include diversifying international air routes and reducing dependence on conflict-prone regions, enhancing bilateral air service agreements to improve connectivity and rationalizing taxation across aviation turbine fuel (ATF), hospitality and F&B sectors to reduce cost pressures. The report also calls for targeted financial support and easier credit access for MSMEs, which form a significant part of the tourism and restaurant ecosystem.Further, it recommends accelerating infrastructure development, improving multimodal connectivity and promoting domestic tourism circuits to sustain demand. Strengthening digital travel facilitation, visa processes and destination marketing in alternative global markets is also highlighted as critical to offset declines in traditional inbound segments. For the restaurant sector, the report emphasizes the need to stabilize supply chains, reduce compliance burdens and support local sourcing ecosystems.

 

The report concludes that while the West Asia conflict has introduced short-term disruptions, it also presents an opportunity for India to build a more resilient, diversified and self-reliant tourism ecosystem. With strong domestic fundamentals and coordinated efforts between government and industry stakeholders, India’s tourism, hospitality and F&B sectors are well-positioned to navigate current uncertainties and sustain long-term growth.