The conflict in the Middle East has triggered significant and immediate impacts on travel activity across the region and beyond. Airspace is largely closed, with more than 5,000 flights cancelled within the first two days of the conflict. When flights resume, priority will be given to stranded holidaymakers–both within the Middle East and further afield who will transit through regional hubs–and to residents looking to leave for safety reasons.
We have modelled two scenarios for the impact of the conflict in the Middle East.
- An ‘early resolution’ scenario, lasting 1-3 weeks: Under this scenario, we estimate inbound arrivals to the Middle East could decline 11% y/y in 2026 due to the conflict. This is a loss of 23M international visitors in 2026 when compared to our December baseline. In spending terms, this equates to a $34B loss in the current year.
- The protracted conflict scenario: This is based on our assumption that Iran is unlikely to sustain the fight for more than one or two months. We see larger losses of around 38M international visitors in 2026, which results in a loss of 27% y/y in 2026. In spending terms, this equates to a $56B loss in the current year.
GCC countries will see the largest losses, as they are the largest destinations in the region which have previously relied on perceptions of safety and stability.
The Middle East is also a major global transit hub with its airports accounting for around 14% of global international transit activity. This will inevitably lead to knock-on impacts outside of the region.