Tourism economics models sharp decline in tourism during Middle East conflicts | News
New modeling of Tourism economypart of Oxford Economics, paints a grim picture of travel demand around the world Middle East in 2026 as a result of the escalating conflict involving Iran.
Before the outbreak of hostilities, the region was forecast to see strong double-digit growth in international arrivals this year. However, Tourism economy now outlines two possible scenarios – and both represent a dramatic reversal of that outlook.
In the more optimistic case, where the conflict is resolved within a few weeks, international arrivals to the Middle East would still decline by around 11% year-on-year. That would translate to approx 23 million fewer visitors compared to previous projections, causing an estimated loss of $34 billion in tourism expenditure.
If the conflict continues for about two months, the decline will deepen considerably. In that case the arrivals will come over the region could decline by about 27% by 2026equating to as many as 38 million lost visitors and approximately $56 billion in lost tourism revenue.
The modeling shows that while Gulf Cooperation Council (GCC) destinations would suffer the biggest losses in absolute visitor numbers – due to their size and heavy reliance on air links – the percentage declines could be even sharper in non-GCC markets that were expected to rebound strongly this year. Countries at the center of the conflict, including Israel and Iran, are facing particularly steep reversals as recovery prospects are derailed.
According to Tourism Economics, the expected declines are driven by two interconnected forces: operational disruption and weakened traveler confidence.
On the operational side, widespread airspace closures and flight cancellations in multiple countries are severely limiting access to and through the region. Even once airspace reopens, airlines are expected to prioritize the repatriation of stranded passengers and residents, meaning a slower return to normal flight schedules. In a prolonged conflict scenario, flight networks would take longer to stabilize, increasing the impact on visitor flows.
At the same time, sentiment effects are expected to continue to weigh heavily on demand well beyond the immediate period of disruption. Even in a short-lived conflict Travel confidence is likely to remain subdued during the second quarterwith only gradual improvement thereafter. In the event of a longer conflict, concerns about a new escalation could dampen bookings for much of the year.
Destinations not directly involved in the fighting are also expected to be affected. For example, the GCC countries and Jordan are expected to experience reduced demand, largely due to perception and security issues, rather than due to damage to infrastructure. While these markets may recover more quickly if stability returns, the depth and duration of the downturn will depend heavily on how long hostilities continue.
Tourism economics also highlights the critical position of the Middle East in global aviation. With a significant portion of international passengers traveling via regional hubs, the disruption will impact not only inbound tourism, but also long-haul travel between Europe, Asia-Pacific and North America. Diverted flights, higher fuel costs and reduced capacity are likely to put upward pressure on fares, further weighing on forward bookings.
Taken together, Tourism Economics’ analysis underlines how quickly geopolitical instability can reverse growth trajectories – and how both physical disruption and traveler psychology determine the scale of tourism losses.
