Iran War Costing Middle East's Tourism Industry $600 mn A Day: Report

The ongoing conflict in the Middle East is taking a heavy toll on the region’s tourism industry, with losses estimated at roughly $600 million a day in foregone visitor spending, the Financial Times reported, citing calculations by a global tourism body.

A wave of flight cancellations, temporary airspace shutdowns and rising concerns among travellers has unsettled the region’s travel economy. The disruption intensified after Tehran carried out strikes on several Gulf countries following attacks by the US and Israel.

Holidaymakers have begun cancelling their plans in large numbers. Data compiled by analytics firm AirDNA from platforms such as Airbnb and Vrbo shows that more than 80,000 short-term rental bookings in Dubai were scrapped in the week ending March 6.

Before hostilities escalated, the World Travel & Tourism Council had projected international visitor spending in the Middle East to reach about $207 billion this year.

Tourism hubs such as Dubai have long built their appeal on luxury hospitality, warm weather throughout the year and an image of stability despite tensions in the wider region. However, the current conflict has begun to affect even some of the area’s most high-profile properties.

Missile interception debris reportedly fell near the Burj Al Arab in Dubai, while Fairmont The Palm on Palm Jumeirah — operated by Accor — sustained a direct strike.

Major aviation hubs including Abu Dhabi, Dubai, Doha and Bahrain typically handle more than half a million passengers daily. Yet nearly five days of widespread flight disruptions across the region left about four million travellers stranded last week, according to aviation data provider Cirium.

Airlines have since been operating additional flights in an effort to repatriate tens of thousands of visitors who were unable to leave during the shutdown.

Dubai began restoring services last week and had resumed roughly a quarter of its flight schedule by Thursday. Qatar briefly reopened its airspace over the weekend but shut it again on Sunday, although a limited number of flights operated under special clearance on Tuesday.

The region’s tourism sector has shown resilience in the past. Data from hospitality analytics firm CoStar indicates that hotel revenue per available room in Qatar dropped sharply after Israel struck Doha last September, but recovered within a few weeks.

Even so, analysts believe the recovery may vary by segment. Corporate travel could rebound relatively quickly given the Middle East’s strategic position between Europe and Asia, while leisure travellers may opt for alternative destinations in the near term.