Shah's visit to the hill station is scheduled to celebrate BJP's second year stint in the state led by Jai Ram Thakur.
The converging of tens of thousands of party activists from across the state has also left hoteliers worried as they are expecting a heavy rush of tourists till New Year's Eve.
On an average, approximately 20,000 tourists from Punjab, Haryana, Chandigarh and Delhi reach Shimla and its nearby destinations during the peak tourist season.
More than 15,000 tourists were in town and its nearby destinations like Kufri and Narkanda to celebrate Christmas, say tourism officials.
"Normally after Christmas, the footfall of tourists swelled. The announcement of a public rally by the government has dashed our hopes of brisk business just ahead of the peak tourist season," a local hotelier, who didn't wish to be identified, told .
He said some of the reservations have been cancelled after the announcement of the rally.
According to police, the tourists are also expected to encounter traffic bottlenecks on the route to the hill station with over 50,000 supporters heading there for the rally.
Shimla Deputy Commissioner Amit Kashyap said in light of the heavy traffic expected in Shimla due to celebratory function of completion of two years of the government on December 27, the residents and tourists are advised to avoid the use of Cart Road.
He said the government has made adequate arrangements of public transport and requested the people to make maximum use of it.
He also advised the owners of the vehicles not to park vehicles on the road and urged the public to use available parking spaces other than the Tuttikandi parking.
Kashyap urged the residents and tourists coming to the city to cooperate with the administration and police for smooth flow of traffic so that minimum inconvenience is caused to the public.
( With inputs from IANS )