Hotels and houseboats in Indian Kashmir are offering discounts of up to 70% after travellers fled following a deadly attack. On the Pakistani side, a tourist hotspot just on the border was sealed off as war cries between the foes grow louder.

Residents in the divided Himalayan region known for its snow-covered peaks, fast-running streams and majestic Mughal-era gardens rely heavily on tourism, but their livelihood has become one of the first victims of the latest hostilities between Pakistan and India.

The nuclear-armed neighbours have fought two wars over the disputed region, which they both claim in full while ruling in part, and skirmishes between troops stationed along the de facto border have made Kashmir the frontline of their discord.

But a sharp decline in militancy and a ceasefire that largely held for four years sparked a tourism boom, sending more than 3 million travellers to the Indian side of Kashmir last year while nearly 1.5 million vacationed on the Pakistan side.

The influx had been touted as a major success story for the government of Indian Prime Minister Narendra Modi, whose revocation of Kashmir’s autonomous status in 2019 led to massive unrest.

Hotels, houseboats and taxis were nearly fully booked at the start of the peak summer season this year too, before the attack last month on tourists killed 26 men in a meadow.

India has blamed Pakistan for the attack and announced a series of diplomatic and economic steps against the neighbour. Pakistan has denied any role, unveiled tit-for-tat measures, and warned of an imminent military strike by India.

Yaseen Tuman, who runs a more than 100-year-old travel agency and operates multiple houseboats in Srinagar, the main city of Indian Kashmir, said that nearly all his customers had cancelled bookings and his houseboats were empty.

“Our houseboats were packed and now we have no guests,” Tuman told Reuters, sitting on a wooden sofa in one of the houseboats on Nigeen Lake.

Indian travel booking websites show houseboats and hotels offering heavy discounts, but Tuman said he won’t cut rates because he did not expect tourists to come in big numbers anyway.

“We will have to prepare for a long lull.”

‘GOING TO HURT BADLY’

On the other side in Pir Chinasi, located at an altitude of 9,500 feet, roadside restaurants, hotels and guesthouses were sparsely occupied after authorities advised caution, fearing an Indian strike, though it is not so close to the de facto border.

Neelum Valley, which lies on the border and is one of the most favoured tourist destinations in Pakistan, is out of bounds for now, authorities say.

All the nearly 370 hotels and guesthouses in the valley are now empty, said Abrar Ahmad Butt, spokesperson for the hotels and guesthouses association of the region. Tourists typically throng the place starting in May as temperatures soar in rest of the country.

“It’s going to hurt badly this season,” he said.

Tourism employs around 16,000 people in the region.

For Syed Yasir Ali, who works at a foreign mission in Islamabad, not being able to go to Neelum Valley may have been a dampener but he felt no fear in visiting Pir Chinasi with his wife and three sons.

“This side is safe”, he said, suggesting that others were wrongly fearful of visiting. “I am on the ground, it is safe.”

But the fear is having real economic consequences for a tuck shop run by Musaddiq Hussain.

“Business is completely down,” he said. “We should have peace in the country, so that we could prosper. “We want both countries to have peace.”

In Srinagar, taxi driver Tanveer rues the lost opportunity.

“The streets were packed, there was no place to drive in the city before the horrific killing,” he said, giving only one name. “I wait for a passenger all day. Before the attack, I had no time to take on more work.”