As neighbouring Colombo has introduced fuel rationing amid a drop in tourist arrivals following the escalating war between Iran and the combined forces of the United States and Israel, the hospitality sector in Kerala, which contributes around 10% of the State’s Gross Domestic Product, is staring at a bleak future with a large number of cancellations, including in the medical tourism segment.
Kerala is considered the cradle of wellness tourism in the country, and nearly 70% of the foreign tourists visiting the State belong to this category.
Read: Iran-Israel war LIVE
Around 85% of the foreigners visiting the State use either Doha or Dubai as transit points to reach Kerala, in the absence of direct flights connecting the State with Europe. This movement has come to a complete halt following the outbreak of the war, leading to cancellations and postponements of trips. According to Sajeev Kurup, general secretary of the Confederation of Kerala Tourism Industries (CKTI) and chairman of the Ayurveda Task Force of FICCI’s National Tourism Committee, the sector is facing an unprecedented crisis with travel restrictions coupled with an energy crisis.
“Despite the foreign tourist season nearing its fag end in Kerala, which usually begins in October-November and ends by March, the sector has already lost around 20–25% of its business. There have also been no bookings for the next season since the war began. Further, the hospitality sector is unable to operate smoothly due to the shortage of commercial LPG, and the issue is likely to snowball into a major crisis if the war continues, especially once the Assembly elections in the country are over,” said Mr. Kurup.
The crisis is likely to lead to layoffs and cost-cutting measures once the upcoming domestic tourist season in April and May is over. According to James Kodianthara, former chairperson of the Kerala chapter of the Indian Association of Tour Operators (IATO), the domestic tourism sector will also be impacted by the disruption of global energy supply chains with closure of restaurants. The next financial year will be a difficult period for the sector unless the Centre introduces support measures such as the Emergency Credit Line Guarantee Scheme (ECLGS), which it rolled out during the COVID-19 pandemic, he said.
A foreign tourist visiting Kerala for medical tourism, particularly Ayurveda, typically spends two to three weeks in the State, significantly contributing to the local economy. In 2025, about 8.21 lakh foreign tourists visited various destinations in Kerala, according to statistics from the State Tourism Department, compared to 7.38 lakh in 2023. The United Kingdom and the United States together accounted for about 2.23 lakh visitors last year.
The State has been lagging in the foreign tourist segment since the COVID-19 outbreak, as it has yet to reach the pre-pandemic peak of 11.89 lakh foreign tourist arrivals recorded in 2019. The present crisis could once again push the sector towards the austerity measures it adopted during the COVID-19 period if the war continues and the emerging trends persist, said Vinod Vattekkat, general manager of Clouds Valley Leisure Hotel in Munnar
Published - March 16, 2026 10:05 pm IST
