Airline, Tourism, and Hotel Stocks Plunge Up to 7% Amid Rising India-Pakistan Conflict and Travel Fears

The escalating geopolitical conflict between India and Pakistan sent shockwaves through the travel and tourism sectors on Friday, May 9. Airline, tourism, and hotel stocks witnessed sharp declines as investors reacted to growing fears of reduced travel demand, flight cancellations, and increased military tension along the border.

Tensions Escalate After Border Attacks

Multiple strategic locations in Jammu & Kashmir, Punjab, and Rajasthan—notably Jammu Airport and Pathankot Airbase—came under attack overnight following heavy artillery shelling, drone strikes, and loitering munitions launched from across the border by Pakistan. The attack escalated significantly, shaking investor confidence and triggering broad-based selling in travel-related stocks.

Travel Stocks Take a Hit

At 11:30 AM, several prominent travel and tourism companies were among the session's worst performers:

• Yatra Online, EaseMyTrip, and Thomas Cook India fell 2-5%.
• InterGlobe Aviation (IndiGo operator) saw a decline of 2%, extending prior-session losses.

Additionally, NYSE-listed MakeMyTrip tumbled 13% overnight, closing at $97.13, as global investors offloaded holdings amid the rising military conflict and flight disruption fears.

Hotel Sector Not Spared

Hotel stocks were also under pressure:

• Indian Hotels Company, ITC Hotels, EIH, and Chalet Hotels declined by up to 7%, reflecting expectations of lower occupancy rates and discretionary travel spending due to safety concerns and cancellations.

Air Travel Disruption Worsens

The aviation industry is bracing for further headwinds:

• The Indian government closed 24 airports across North India to civil flights, including Chandigarh, Srinagar, Shimla, Jaisalmer, and others.
• Blackouts and security alerts have disrupted flight schedules, causing mass cancellations, diversions, and the rerouting of both domestic and international carriers.

Earlier, on May 7, IndiGo and SpiceJet had already canceled multiple flights following India's retaliatory military operation, dubbed 'Operation Sindoor', against Pakistan-based targets.

Investor Outlook: Brace for Volatility

With ongoing tensions, the tourism and hospitality sectors may continue to face volatility. Concerns related to flight operations, regional stability, and shifting consumer sentiment are expected to impact demand in the near term.