IDSC sheds light on repercussions of ongoing regional escalation on tourism markets

CAIRO - 5 March 2026: In line with its mandate to monitor and analyze international developments, the Cabinet’s Information and Decision Support Center (IDSC) has reviewed a series of reports issued by global think tanks, international institutions, and major news agencies assessing the repercussions of the ongoing military escalation in the Middle East.

 

The Center highlighted key analyses examining the losses facing regional tourism markets, as well as projections for the sector’s recovery phase.

Among the reports referenced is an assessment by Oxford Economics, which noted that the outbreak of war between the United States and Iran immediately reshaped travel dynamics across the Middle East. The closure of airspace in several countries resulted in the cancellation of more than 5,000 flights within just two days, effectively paralyzing regional and international air traffic.

The suspension of operations was compounded by logistical challenges in restoring scheduled services. Airlines prioritized the evacuation of stranded travelers across the region and along major transit routes linking Europe and Asia, many of which depend on Gulf aviation hubs.

This disruption has generated significant anxiety among both travelers and carriers, with implications likely to extend beyond the immediate cessation of hostilities due to weakened consumer confidence and reduced appetite for travel.

According to the report, the duration of the conflict will be the decisive factor in determining the scale of losses. Even under a scenario in which the war ends within weeks, visitor arrivals to the Middle East are projected to decline by 11% in 2026. This would represent a loss of approximately 23 million visitors and between $34 billion and $56 billion in tourism spending. Should the conflict persist for two months or longer, these losses are expected to nearly double, according to the report.

Countries heavily reliant on air connectivity, particularly the United Arab Emirates and Saudi Arabia, are experiencing a sharp decline in tourist flows due to reduced flight capacity and rising travel costs. The impact is even more pronounced in Israel and Iran, where projections suggest that visitor numbers could fall by more than half compared to pre-conflict recovery expectations.

The report cautions that the effects of the conflict are unlikely to dissipate quickly. Even as some air routes reopen, ongoing instability and security concerns may continue to suppress demand. Recovery will largely depend on how swiftly travelers regain confidence in the region’s safety. This is especially critical for Gulf destinations, which rely heavily on their reputation as secure transit and tourism hubs and account for an estimated 14% of global international air connectivity.

Reductions in operations by major airlines based in Dubai, Doha, and Abu Dhabi are reverberating across global travel networks. At the same time, the diversion of flights to longer alternative routes via Europe and Central Asia has increased travel times and fuel consumption, raising operational costs and prompting the potential cancellation of certain routes.

The strain on aviation networks comes at a time when global air corridors are already constrained. Since the outbreak of the Russian-Ukrainian war, large portions of traditional airspace between Europe and Asia have been closed. The current escalation further narrows available routes, turning the region into a bottleneck within the international air transport system. Airlines are now operating through more congested corridors, increasing the likelihood of additional disruptions and prompting some travelers to reconsider or cancel their plans.

The impact extends well beyond the Middle East. Europe, Asia, and North America are also feeling the repercussions. For example, United Airlines has suspended flights to Tel Aviv due to elevated security risks and operational costs, despite the route historically being among its most profitable.

The crisis is further exacerbated by rising oil prices amid threats to maritime shipping in the Strait of Hormuz. Forecasts suggest that oil prices could exceed $80 per barrel in the second quarter of 2026. Higher fuel costs, combined with extended flight durations caused by rerouting, are placing additional financial pressure on airlines.

These mounting costs are expected to translate into higher ticket prices and weaker travel demand, affecting forward bookings and increasing uncertainty across the aviation and tourism industries for the duration of the conflict.

Countries that depend heavily on tourism as a primary economic driver are among the most vulnerable. Declining revenues are weighing on hospitality sectors and related service industries, while governments face mounting pressure to design and implement rapid recovery programs once hostilities subside.

Analysts stress that the consequences go beyond a temporary drop in visitor numbers. The conflict is reshaping regional and global tourism patterns. Airlines will require time to redeploy aircraft and crews, while some countries may delay reopening their airspace out of concern over renewed attacks. This is likely to create a prolonged imbalance between air transport supply and demand, keeping prices elevated and slowing the pace of recovery.

Overall, the war between the United States and Iran has triggered shocks that exceed traditional expectations regarding the impact of regional conflicts on travel and tourism. Rather than remaining geographically contained, the escalation has disrupted one of the world’s most critical aviation corridors and contributed to a cross-border downturn in global tourism.

The trajectory of these repercussions will ultimately depend on the duration and intensity of the conflict, as well as on the ability of governments and airlines to restore confidence, ensure safety, and provide reliable alternatives for travelers. Even under the most optimistic scenario, rebuilding trust and stabilizing the market will be a complex and gradual process.