The Rs 25,000 crore tourism industry has been a driving force of Kerala's economy.
Kerala known for its backwaters, ayurveda, coconut lagoons and sea food has been a favourite destination for tourists but hoteliers claim the new liquor policy may make it difficult to keep up the high spirits.
However, the government claims that far from the dip, the tourists have only increased.
"There should be no fear that tourism will be impacted. Kerala has a lot to offer that is envied actors the world. It's not about liquor. In fact if it is about conventions and meetings there is a provision where the concerned hotel can apply for 1-day licence," Sheikh Pareeth, director for Kerala Tourism, said.
According to official statistics, 2015 has witnessed a 5 per cent increase in international tourists and 8 per cent in domestic. And Kerala's aim for 2016 is to push for a 15 per cent increase in tourists.
Meanwhile, some in the state hold views contrary to the government's claim.
"Liquor policy has affected MICE travel to Kerala, by which we focused on the sector with meetings, incentives, conventions (and exhibition) have all gone for a toss. Terribly wrong signals are going out from Kerala", says Jose Dominique, Chief Executive Officer, CGH Earth Group.
The Rs 25,000 crore tourism industry has been a driving force of Kerala's economy.
Buonjon a tourist from Sweden says, "Kerala is beautiful. While tourists like me are not affected... the new policy will affect those who consider alcohol as an important constituent of their leisure or holiday time."
"The new policy can affect tourism, might increase smuggling, black marketing. For those like me who don't drink, nothing will change. But those who want to find a way will anyway," said Vinod, a doctor.
The liquor policy implemented in 2014 allows hard liquor to be sold only in 5-star hotels or government outlets. Other places can only serve beer and wine.