Ladakh’s tourist economy tumbles after string of disruptions

In 2022, as the number of Covid-19 cases began falling and travel opened up again, 30-year-old Irshit Ali’s life changed. There was a sudden surge of tourists in his hometown of Ladakh, where he worked ferrying tourists in his van. This was good for business.

His monthly income went up from around Rs 20,000 in 2022 to Rs 1.5 lakh in 2023. This encouraged Ali to expand his business. He secured a bank loan to purchase two more vehicles. For the next two years, he saw a steady rise in tourists coming to Ladakh.

However, 2025 brought Ali, and Ladakh’s entire tourism sector, to the brink of a crisis.

A series of events from April 2025 severely impacted the tourism economy of India’s newest union territory, those in the industry report. After a terrorist attack in Pahalgam, Jammu and Kashmir that month, there was a slight decline in foreign tourists visiting Ladakh. Then, during the brief armed conflict between India and Pakistan that followed, and even after it, tourist activities completely stopped.

Later in August, after record-breaking rainfall, roads were closed and the region was cut off for a few weeks, discouraging tourists from travelling to Ladakh.

In September, a protest in Leh demanding full statehood for Ladakh and inclusion in the Sixth Schedule of the Constitution turned violent, again keeping tourists away from the cold desert region.

According to Rigzin Lachik, the President of All Ladakh Hotel and Guest House Association, business in Ladakh dropped significantly in 2025 and due to the cancellation of bookings in hotels and guest houses, many hotel owners earned much less than expected.

“Tourism growth in Ladakh has been very positive since 2010. However, this growth has stalled since 2018. Last year was particularly difficult, not only for the tourism industry but for everyone in Ladakh. First, the Pahalgam terror attack, then the heavy rains in Ladakh and neighbouring states, and then the September 24 incident – all these factors impacted the tourism sector,” said Lachik.

Talking about the brief conflict in April, Lachik said, “During Operation Sindoor, the airport was completely closed, and people who wanted to come couldn’t. During that time, 80% of our bookings were cancelled, and we had to refund people in full. So, there were very few tourists in May. We started to recover a little in June, but recovery could not be sustained.”

Data from the Kushok Bakula Rimpochee Airport in Ladakh reveals that the airport was completely closed from May 7 to May 13 due to Operation Sindoor, launched by the Indian Armed Forces. No aircrafts operated on August 25, 26 and 27 due to rain.

In September, following the protests, four people died and over 50 sustained injuries in police firing. A week-long curfew was imposed in Leh after the incident.

According to the data from the Tourism Department, the month of June saw the highest decline in tourist numbers. Ladakh typically sees over 100,000 visitors during this month each year. In 2024, 153,711 tourists visited Ladakh; in 2025, the number stood at 75,089 – almost half.

“No business can plan properly when there are frequent disruptions,” said Arnab Ghosh, the general manager of El Castillo Hotel. “There were a lot of disruptions during the main summer season. By the time we could decide on staffing, capacity, whether to stock or not, or how much to stock, the main season was over,” he said. According to Ghosh, his earnings dropped by about 30-40% last year.

“There were 30 to 45 days when our hotel didn’t have a single guest, meaning zero occupancy! Any businessperson in Ladakh anyway expects only 100 to 120 days of good revenue during the tourist season. About half of those days had zero occupancy,” he added.

“I’ve been in this field since 2010, when I used to drive an Echo van. I bought a new Scorpio N in November 2022,” said Dorje Gyalson, a taxi driver in Leh about his vehicle upgrade. “After COVID, business went well in 2022, and our expectations increased accordingly. Those who have purchased new vehicles are 70%-80% on loans. These people are now having trouble paying their loan instalments. Everyone’s monthly instalments are over Rs 20,000,” he continued. “Because of the extreme weather conditions here, we can work only for six months. We use these funds to pay instalments and sustain ourselves in the next six months,” added Gyalson.

Over the past few years, Ladakh’s tourism infrastructure has expanded, with people obtaining loans from various banks to expand their businesses. However, with the drop in tourist numbers, they find it challenging to repay those loans. Consequently, various organisations requested temporary relief on their loan and interest payments.

The Finance Department, responding to this demand, issued a notification to bankers declaring Ladakh a disaster-affected area. Following this declaration, banks in Ladakh can offer borrowers flexibility in instalments and repayment periods under the provisions of Chapter Seven of the Reserve Bank of India’s Master Direction.

According to data from the Tourism Department, 3,35,872 tourists visited Ladakh in 2025, a decrease of only about 10% from the previous year. But why did many businesses struggle despite only a small decline in visitor numbers?

This may be due to the increase in the number of hotels and guest houses in recent years, says Ladakh’s Tourism Secretary, Sanjit Rodrigues. In the last three years, the number of hotels and guest houses in Leh city alone has increased by approximately 30%. The number of taxis has also increased significantly, he says.

“The peak business months witnessed some disruptions in 2025. However, that is not the only reason behind the drop in earnings of people. Our analysis shows that in the last few years, the number of hotels, guest houses, taxis, tourism related business establishments have increased rapidly, but the number of tourists have not increased in that proportion,” Rodrigues said.

He also noted that there is a need for a scientific study on the carrying capacity of Ladakh, especially in Leh town. Results of overtourism within the town could prove detrimental in the long term both for the industry and ecology.

Those involved in this sector say that it would be inaccurate to assume that the sudden surge in tourist arrivals in Ladakh in 2022 and 2023 was normal and make income predictions based on that. During these years, due to COVID-related restrictions preventing domestic tourists from traveling abroad, the number of tourists in Ladakh exceeded five lakhs. However, in 2024, the number dropped to around 2,50,000.

According to official data, Leh had 149 hotels and 386 guest houses in 2011. In 2015, the number of hotels increased to 213 and guest houses to 433. According to 2022 data, Leh had 291 hotels and 807 guest houses. In Kargil, there were 17 hotels and 82 guest houses in 2015, which increased to 40 and 100, respectively in 2022.

While the most recent data on the number of hotels and guest houses is unavailable, a 2021 report prepared by The Energy and Resources Institute for NITI Aayog, estimated that Ladakh would have 489 hotels, 1,061 guest houses and 73 homestays by 2025. This represents a 108% increase in hotels and a 206% increase in guest houses compared to the 2015 data.

Also, there were 3,646 taxis in Ladakh in 2022, but according to Stanzin Loldan, the vice-president of Ladakh Taxi Union, currently there are more than 5,500 taxis in Leh alone.

The rise of hotels, taxis and other means of transport, coupled with the increased tourist flow, has boosted Ladakh’s tourism and economy. However, this has also led to an increasing consumption of natural resources in the UT.

According to a report by the Indian Institute of Sustainable Development, between 2001 and 2011, the built up area in Ladakh increased from 168 hectares to 294 hectares. Also, the introduction of exotic plant species for urbanisation, aesthetics, and commercial purposes has harmed the biodiversity of Leh city.

The Ministry of Tourism’s vision document for the development of tourism in Ladakh also highlights the cultural and environmental challenges posed by increased tourism. The document states that excessive tourism in Ladakh could threaten socio-cultural heritage, overuse limited resources, and lead to other negative impacts.

The replacement of traditional and eco-friendly buildings with non-eco-friendly ones, the growing problem of dry waste, increasing air pollution, depletion of water resources and the loss of biodiversity, are listed as major challenges to tackle.

This article was first published on Mongabay.

Source: Scroll
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