At a time when the tourism sector is battling slowdown, terrorist attacks in Mumbai have cast a shadow on the industry and the hoteliers are expecting large scale cancellation of bookings, especially from overseas visitors.

"Over the next two three months, there will be a large number of cancellations. But I do believe that Indian industry will bounce back like many other destinations," said R K Krishna Kumar, managing director of Indian Hotels, which manages Taj Hotel in Mumbai.

Terrorists, this time, have targeted the five-star hotels damaging Mumbai's historic Taj and Oberoi (Trident), in order to create a fear psychosis among the guests.

"No doubt the immediate impact will show in the hospitality sector as the situation is grave and people tend to react to the incident of the day," Bharat Hotels general manager (marketing and communication) Anjali Chatterjee said.

She said the sector is suffering from such situations like the one witnessed at Bangkok International airport by protesters. "Such incidents even affect inflow of pre-booked tourists," she added.

STIC Travel Group founder chairman Subhash Goyal said," This year we are expecting 20 per cent growth in the tourist movement compared to last year.

"Last year, five million foreign tourists visited India and outbound were 9 million. Year-on-year growth will be affected and we might not see a growth of more than 10 percent in the number of foreigners coming to India," he said.

About 65 per cent of hotel rooms are used by business travelers. About 30,000 rooms are in Mumbai and Delhi.

Carlson Group executive vice-president K B Kachru said, "Security has always been a major factor in tourism. Reaction is bound to happen and a general tourist would be apprehensive."

Goyal added, all the hotel association members are likely to meet the Tourism and Culture Minister Ambika Soni next week to draw a strategy to deal with the consequences of such incidents.

He said this is the busiest season for tourists (October to March) and this attack was unfortunate in the middle of this peak season.

Medium segment which include 2-Star and 3-Star hotels are also expecting a short-term impact, but are hopeful that things would improve in the medium term.

"Although there will be slowdown and cancellation of bookings leading to dip in occupancy in the short-run, the effect will mostly be felt in the metro cities," Phoenix Group director (public relations and communications) Preeti Chand said.