Among the myriad of problems caused by the current war in the Middle East, the hotel industries in the nearby countries are facing abrupt and complicated changes inevitably associated with airline routes and flight corridors.
During the webinar “The Middle East outlook: Assessing the impact on global travel and hospitality,” hosted by Tourism Economics and The Bench, panelists said markets and hotels dependent on international inbound demand and are directly or indirectly affected by the war in Iran will face challenges
This hypothetical timeline focuses on a two-month length of hostilities. If that timeline is realized, the effects on the hotel, air and tourism industries will likely to last nine or 10 months — essentially the rest of 2026.
Ali Shahid, CEO of The Bench, said with so much uncertainty, now is the time for “some perspective that gives us foresight.”
While events in the Middle East might be regarded as just more noise, the current conflict arrives at a time when governments and businesses thought inflation was coming under control, leading to more preferred interest rates.
David Goodger, managing director, Europe, Middle East and Africa, Tourism Economics, said it was “expected for 2026 to be a year of rebound, but that is sadly not the case.”
“Inflation will fall short of the spikes seen in 2022, but prices will rise. There will be a softening of growth, spending and gross domestic product,” he said.
He said travel to the Middle East is at risk.
Concern about traveling to the region has reversed, at least temporarily, notable performance gains since the ending of the pandemic.
Goodger said he now predicts a sharp fall in travel demand to the region, down between 25% and 30%, not the 13% growth predicted before the start of the crisis.
The recalculated numbers suggest a “$56 billion loss in tourism revenue for the region,” he said.
“Gulf Cooperation Council recovery will depend on longer-haul travel,” he said, adding in 2025, 46% of performance was domestic, 22% intra-GCC travel and 32% international inbound.
“So, one-third needs to come back to spur a recovery. … That inbound is really needed,” Goodger said.
Jonathan Worsley, chairman, The Bench, asked if the “long tail” following such crises might be becoming shorter as everyone becomes more resilient to geopolitical noise.
The Bench in mid-March postponed its Future Hospitality Summit Saudi Arabia conference to June from April. Dubai’s Gulf & Indian Ocean Hotel Investors’ Summit rescheduled from March to October, and the Arabian Travel Market, also in Dubai, moved from April to August.
Revising routes
The long tail will have a profound effect on some markets as a result of necessary changes in air routes, and the complicated, expensive nature of making such changes.
Worsley said he saw Africa especially affected by this scenario.
“Travelers are more aware of what corridors they are flying in, and that never was the case. Routes take a long time to put in place, and once you lose them, it takes a long time to recover them,” he said.
Goodger said British Airways has cut back flights to the Middle East, instead, moving its capacity to the Asia-Pacific region.
He said Middle Eastern airport hubs are a major consideration in global travel.
Deriving from changes in air routes and capacity to the Middle East, he saw at risk 3% of travel to North America, 4% to Europe, 8% to APAC and 14% in Africa.
African destinations will see a 10% decrease in roomnights, Goodger said.
Egypt, Morocco and Turkey are exposed, he said. Twelve percent of travel to the U.K. is potentially at risk and 18% to Australia, a well.
“The requirement for new routes and the higher fuel costs and longer travel times, potentially will see 21% of international roomnights in APAC at risk,” he said.
Indian and European visitors might see higher air prices due to their reliance on Middle Eastern energy.
Acquisitions of energy from Russia have not been theoretically possible since Russia’s invasion of Ukraine, a conflict that also affected air routes, which now have been further disrupted by Iran sitting close to the southern edge of massive Russia.
A webinar attendee, Daniel Silke, director, Political Futures Consultancy, said he wondered if the crisis would not spur a move to diversify airlift routes toward more direct point-to-point services as alternatives to hubs.
“But that’s easier said than done in the real world,” he said.
Staying at or close to home is another strategy, Goodger said.
Chinese outbound travel is "part of the regionalization travel story. We have seen more independent travelers (from there), but it is a market we can say still is more risk-averse,” he said.
Business sentiment due to interventionist global policy is another major concern.
Changing travel patterns
People are still prioritizing travel, and if they're not going to the Middle East, they are going somewhere else.
Goodger said leisure travel spend in the European Union sits at approximately 11% of income, a level that has not changed in the last four years.
He said travel is increasingly important, but people are focusing on value and seeking savings on hotels and other lodging accommodation.
Goodger, Shahid and Worsley said Europe stands to gain more travelers as people cancel travel plans to GCC countries. Places like Italy and Spain with high perceptions of safety should benefit, and the speakers said North Africa — notably Egypt and Morocco, perhaps Tunisia — will also see more demand.
“Egypt does have exposure to GCC travel, but it also has opportunities from Europe,” Goodger said.
Istanbul and Addis Ababa are two airport hubs that might see increased numbers.
Another thing webinar panelists agreed on was that a major lesson learned in other crises would prevail.
“We did not see hotel average daily rate being cut during COVID-19, and that lesson likely will be seen in this setback, too,” Goodger said.