The hoteliers are in a great state of anxiety and even laying off staff.
The state depends on religious tourism where people come from different parts of the country and even abroad to visit Kedarnath and Badrinath - the two most revered Hindu shrines.
"The business this time is very poor. Earlier, at this time our hotels used to be full even up to June 20. This time even in May we did not have any business," C.S. Kotwal, general manager at Monal Resorts, a hotel two kilometres from Rudraprayag, told IANS.
Most of the tourists going to Kedarnath either stay at Rudraprayag, Guptkashi or Gangotri, where the most havoc happened during last year's flash floods. Kotwal feels that the sense of fear after what happened last year has resulted in a poor flow of tourists.
"We are really worried as this is the time for us to earn; but this time the business has been terrible," said Kotwal.
The flash floods last year on June 16 had swept away hundreds of pilgrims and the bodies of many could not be recovered.
Manish Bhatt of Bhatt Resorts here told IANS: "The business is not even five percent of what it used to be. The government has clearly failed to pass the message of security to the pilgrims."
According to a business study, tourism in Uttarakhand in 2014-2015 is estimated to see a 70 percent fall - at Rs.6,900 crore from last year's figure of Rs.23,000 crore.
"Till last year a lot of tourists in our hotel used to be NRIs from Gujarat and Mumbai, but none have come this time," Harish Kothari, manager at Hotel Balber Palace Sachen, told IANS.
Kothari's 75-room hotel used to be packed but this year there has not even been a single day when all the rooms have been occupied.
"Instead of the four places of pilgrimage, the people are only going to Badrinath. Further with several new rules, the government has added to the sense of fear among the people," said Kothari.
The state has put a limit on the number of people who can travel to the religious places, depending on the availability of the hotels and infrastructure, and introduced a lot of rules.
"Even the number of helicopter services has been reduced. There used to be 11 companies running the chopper service, but this year it is only five," said Kothari.
The hoteliers also say that up till last year there used to be 15,000- 20,000 people in a day coming for pilgrimage, but the total so far this year has been around 20,000.
Suraj, a driver with a travel agency, recounts, "Within a period of two months we used to make so many trips to the Char Dham (religious places), but this year I have just made one trip."
Bhatt says that this year the tourists from Rajasthan and Delhi are using the local transport and not getting their own vehicles.
The situation is similar for hoteliers at Guptkashi for whom the business is zero.
"Rooms are running empty. So the 10-12 staff we had employed were just kept for a month. Then on June 2 we paid them and asked to leave as there was no business happening," Rajendra Singh Negi, owner of Hotel Raj Hans Tourist Lodge, told IANS.
Negi blames the government for not having built motorable roads faster.
"Building of motorable roads was delayed. People are still scared with more dead bodies being found in the areas," said Negi.
However, the situation is not that bad in the lower hills of Dehradun and Rishikesh, where the effect from the flash floods was not severe.
"People are still coming to Rishikesh; so the business there has been fine," Ranjit Panwar of Himalayan Lodge at Rishikesh, told IANS.