West Asia conflict hits tourism, aviation: PHD Chamber of Commerce and Industry flags 15-20%

New Delhi: A report released by the PHD Chamber of Commerce and Industry (PHDCCI) on Thursday highlights a 15-20% dip in inbound tourist traffic, significant disruptions in aviation due to rerouting and airspace restrictions, and an estimated ₹18,000 crore net loss for the industry owing to the West Asia conflict. It also notes a sharp impact on the hospitality sector, with nearly 10% of restaurants shutting down and monthly business losses pegged at ₹79,000 crore.

PHDCCI stated that India's 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 industry body's 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 affected, with airlines facing flight cancellations, airspace restrictions and significant rerouting of international flights. These disruptions have increased flying time by 2-4 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 are among the busiest global transit routes, has also reduced connectivity efficiency and increased airfares.