Middle East travel bookings drop 7% as regional war fears hit demand, report says

Israel's neighbours Jordan and Lebanon recorded declines of 21% and 14% in travel demand, according to ForwardKeys

Sunset on the beachfront in Tyre, southern Lebanon, amid continuing tension between Hezbollah and Israel. Reuters

Growing fears of the Israel-Gaza war sliding into a wider conflict involving Iran and its proxies are affecting demand for air travel to the Middle East, with the number of bookings falling in the region.

Flight tickets issued in the period between July 15 and July 25 for any future travel date to the Middle East are down 7 per cent year on year, with Jordan and Lebanon suffering the biggest drops, data from travel research company ForwardKeys has found.

Bordering the Israel-Gaza conflict, Jordan has recorded a 21 per cent year-on-year decline in flight bookings and Lebanon a 14 per cent decrease in tickets booked between July 15 and July 25 for future travel dates, the data showed.

“Travellers increasingly prioritise destinations perceived as stable and secure, and the escalation of tensions in the region will undoubtedly impact travel demand in some way,” Olivier Ponti, director of intelligence and marketing at ForwardKeys, told The National.

Data for flight bookings made in the first seven months of the year also reflects concerns about escalating geopolitical threats in the Middle East.

In the period between January and July 25, Lebanon and Jordan recorded a 25 per cent and 21 per cent year-on-year decline, respectively, for tickets issued. Flight ticket bookings to Egypt are 3 per cent down year on year, “suggesting neighbouring countries are being the most impacted” by the war in Gaza, said Spain-based ForwardKeys.

“Recent political tensions in the region have caused signs of a slowdown in air travel demand, with the outlook for the rest of the year remaining 2 per cent down year on year,” Mr Ponti said.

Leisure travel demand remained on par with the volume of tickets issued last year, while business travel was down 8 per cent, group travel declined 5 per cent and travel to visit friends and family dropped 2 per cent, suggesting consumer confidence is being affected by the conflict, ForwardKeys said.

International airlines have suspended flights to the Middle East or avoided affected airspace amid concerns of a wider confrontation that would draw Iran and Lebanon into a full-on war. Lufthansa on Monday said it had extended its avoidance of Iranian and Iraqi airspace and that it would suspend flights to and from Tel Aviv, Tehran, Beirut, Amman and Erbil until August 21 at the earliest.

Tensions have flared as Iran and its allies vowed to retaliate against Israel for the high-profile killings of Hezbollah's top military commander Fouad Shukr in Lebanon and Hamas's political leader Ismail Haniyeh in Iran late last month.

Hezbollah has been exchanging near-daily fire with Israeli forces across the border between Lebanon and Israel.

The war began when Hamas and allied militant groups attacked southern Israel on October 7 last year, killing about 1,200 people. Israel's retaliatory air strikes and a ground campaign have killed about 39,900 in Gaza to date, says the enclave’s Health Ministry.

A widening of the Israel-Gaza war would severely dent the economic prospects of Lebanon and Israel and further slow growth in Tehran's sanction-hit economy, according to analysts.

For Lebanon, this could mean an economic contraction of 10 per cent to 15 per cent this year, halve its tourism revenue and sever its vital air links, analysts have said.

For crisis-hit Lebanon, a full-scale armed conflict would heighten uncertainty, increase potential losses and lead to the displacement of up to 100,000 people from the south of the country, which would put additional pressure on infrastructure, schools and health systems in other cities, Nasser Saidi, a former economy minister and vice governor of Lebanon's central bank, told The National.

The tourism sector is a major pillar of the Lebanese economy and the country's dependence on the industry has increased as a percentage of its gross domestic product.

“Anything that negatively impacts tourism such as war and violence, or the threat of war and violence, will negatively affect tourist arrivals so it will be a hit to the tourism sector and to the economy,” Mr Saidi said.

Lebanon has relied on high-spending European and Arab tourists, but with the dwindling numbers of international visitors, it is depending on the Lebanese diaspora returning home to visit family and friends.

“But most of them own apartments or stay with their families and friends, which means that hotels and the hospitality industry have fewer people visiting from outside,” he said.

The country is also caught in a “remittance trap” whereby the Lebanese are increasingly reliant on remittances from abroad as a political stalemate is hindering necessary economic reforms to attract foreign investors, Mr Saidi said.

“Remittances are increasingly coming in cash because of a 'zombie' banking system and because the cost of remitting money to Lebanon has increased,” he said.

Travel demand to the GCC

Meanwhile, demand for travel to GCC countries, which are further removed from the conflict and seen as safe and secure, has risen.

Tickets issued to GCC countries so far this year have increased by 10 per cent compared with last year, with Qatar and Kuwait performing well.

“Air travel demand within the Middle East still remains positive for some destinations,” Mr Ponti said.

The number of inbound tourists during the year to July 25 into Qatar has surged 53 per cent on annual basis, the UAE 11 per cent and Saudi Arabia 10 per cent higher than the same period last year, according to ForwardKeys.

Tickets issued in the period between July 15 and July 25 with any future travel date to Qatar have increased 21 per cent and to Kuwait up 17 per cent year on year, it said.