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It’s more or less a lost year for regional tourism, even if the ceasefire holds, while global travel is on track to keep growing. Middle East inbound arrivals are expected to fall 32% this year even if the ceasefire holds, against a pre-war expectation of 14% growth, while the rest of the world will still grow 8%, according to a Tourise and Oxford Economics report (pdf). If hostilities resume, regional arrivals are expected to drop 59%, or by a further 64% under a “sustained disruption” scenario. In these two scenarios, global travel would only take a 1-3% hit.
The gap is an aviation story: Gulf hubs handle around 14% of global transit traffic and roughly 20% of Europe-Asia travel, so instability in the region reprices connectivity everywhere — but is paid for locally. Middle Eastern carriers ran around 50% fewer flights y-o-y in March and cut capacity 37.2% in April. More than 46k flights in and out of the region were canceled between late February and 11 March, and forward bookings through major Gulf hubs for 2Q and 3Q fell by more than 40%.
A reallocation story rather than a demand collapse: Travelers are more likely to adapt than cancel, shifting toward shorter booking windows, regional and domestic trips, and stronger value-hunting. That is a partial hedge for destinations selling to their own neighborhood — and a problem for those built on long-haul, where growth is now seen at 1% in 2026 against a pre-war 10%.
The rebound is back-loaded and steep. Regional arrivals will bounce 51% in 2027 under a ceasefire, but will have a higher rebound to 81% (from a lower base) if hostilities resume first through the rest of this year. That rebound isn’t necessarily automatic, and will depend on restored capacity, clear communication, and destinations showing visible preparedness. Those who tick these boxes recover 1.5x quicker than average, the report says, while reputational spillover hits countries associated with the conflict regardless of actual proximity to it.
