Kashmir tourism slump hits transport operators hard; vehicle loans become unmanageable
Srinagar, Sep 30: The slump in Kashmir’s tourism sector is creating a severe crisis for transport operators affiliated with the trade, many of whom are struggling to repay vehicle loans and meet day-to-day expenses.
Since 2019, Kashmir has been witnessing record-breaking tourist arrivals, with hotels, guesthouses, and houseboats operating at full capacity.
The boom in tourism also fueled a sharp rise in demand for tourism taxis and private vehicles catering to visitors. Many operators, banking on sustained growth, borrowed heavily to purchase vehicles on loans.
Everything was going smoothly until April 22, when the terror attack in Pahalgam’s Baisaran left 26 people dead, including 25 tourists.
The immediate aftermath saw hotel occupancy plummet to just 20 per cent. Tourist arrivals at Srinagar airport were halved, and airlines reduced flights, delivering a severe blow to the entire tourism ecosystem.
Transporters who invested heavily in vehicles now face mounting financial stress. Bashir Ahmad, a taxi operator, said, “I had taken a bank loan for a new vehicle, expecting the tourist season to continue as it had in previous years. Now, with very few tourists, I cannot even manage daily expenses, let alone repay the bank. The EMIs are piling up, and we are under immense pressure.”
Muhammad Yunis, who had purchased two vehicles on loans, added, “The situation is so dire that we are now being forced to sell our vehicles just to survive. The demand we counted on has vanished almost overnight. Many in the business are in the same boat, and defaults are rising.”
Industry insiders note that tourism-linked transport operators are among the most vulnerable segments of the ecosystem, as their income directly depends on tourist inflows.
“This is a classic example of how external shocks can ripple across an entire sector. If tourist arrivals do not stabilise, more operators will default on loans, affecting banks, allied businesses, and the overall local economy,” he said.
The crisis has not only affected transport operators but also highlighted structural vulnerabilities in the tourism sector.
While Kashmir witnessed unprecedented growth in arrivals from 2019 to early 2025, the system remained highly dependent on a few peak seasons, with minimal financial safeguards or contingency planning for operators.
Experts say that diversification of services, better insurance mechanisms for operators, and government support during sudden demand shocks are critical to avoid such crises in the future.
Local transport associations are now urging the government to extend loan moratoriums, provide interest subsidies, and offer incentives to sustain operators during this downturn. “Without immediate relief measures, the livelihoods of hundreds of families linked to tourism transport are at risk,” said Bashir Ahmad.
The slump in tourism, exacerbated by concerns and reduced air connectivity, has underscored how fragile the ecosystem can be. For transport operators who borrowed heavily in good times, the sudden decline in demand has turned previous investments into financial liabilities, leaving many struggling to stay afloat.
