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War in the Middle East is costing the region’s tourist industry $600mn a day in lost visitor spending, according to estimates from a global trade body.
Flight cancellations, airspace closures and increasing unease among prospective travellers are damaging the region’s tourism economy after Tehran launched strikes on multiple countries in the Gulf in the wake of US and Israeli attacks.
“Even short periods of disruption can quickly translate into significant economic losses for destinations, businesses and workers across the region,” said Gloria Guevara, president of World Travel & Tourism Council, which provided the estimate.
Travellers have rushed to call off holidays in the region. More than 80,000 short-term rental bookings in Dubai alone were cancelled in the week to March 6, according to bookings from sites such as Airbnb and Vrbo collated by data group AirDNA.
Ahead of the conflict, the World Travel & Tourism Council had estimated that international visitors would spend about $207bn in the Middle East this year.
Cities such as Dubai have thrived by offering luxury, year-round sunshine and tranquillity in a region often beset by tensions.
But some of the world’s most opulent hotels have been caught up in the conflict. Debris from missile interceptions has fallen on Dubai’s Burj Al Arab, while Accor’s Fairmont The Palm on Palm Jumeirah suffered a direct hit.
Big regional hubs such as Abu Dhabi, Dubai, Doha and Bahrain typically process more than half a million air passengers every day, but five days of flight cancellations across the region left an estimated 4mn travellers stranded last week, according to data provider Cirium.
Hundreds of flights have taken off from airports in the Middle East in the past week in an attempt to return the tens of thousands of visitors who were still stuck.
Dubai restarted flights last week and had resumed about a quarter of its services by Thursday. Qatar reopened its airspace over the weekend, only to close it again on Sunday, although a small number of flights operated with special permission on Tuesday.
Destinations in the Middle East have previously bounced back from outbreaks of conflict. Revenue per available room — a crucial growth metric in the hotel industry — declined sharply in Qatar in the week after Israel struck Doha last September, but returned to growth in less than a month, according to figures from hotel industry analytics company CoStar.
While some analysts expect business travel will rebound owing to the region’s strategic location between Europe and Asia, leisure travellers may seek other options.
“If you’re looking on a personal level about where you want to take your family on holiday, you can pretty easily pivot to another destination that ticks all the boxes,” said Matthew Pohlman, a partner at law firm Goodwin, who specialises in hospitality and leisure.
Others, however, are more optimistic. “There’s a reason why this area was popular,” said Richard Clarke, an analyst at Bernstein.
“Obviously while there’s explosions going off then you’re not going to get much demand . . . But as soon as this comes to an end I think we’ll see people come back,” he said.
“Travellers tend to have shorter memories than investors.”
