Iran war threatens global travel industry as passengers are stranded

Zoe Gong, a Chinese medicine dietitian, was days away from boarding an Emirates flight from Paris to Shanghai via Dubai in the United Arab Emirates when the United States and Israel attacked Iran on Saturday.

As a result, Gong, 30, told CNBC that her flight plans were disrupted and she had to pay $1,600 to get to Shanghai, more than twice the cost of her original ticket.

She is one of millions of travelers caught up in wars and other conflicts this year from Iran to Mexico, which the industry group World Travel and Tourism Council says threatens the global tourism industry, which is worth an estimated $11.7 trillion to the global economy. This shows that even people far removed from missile strikes, drone strikes, and other geopolitical flashpoints are not immune to spillover effects.

The attack on Iran by the United States and Israel has created a major aviation, travel, and security crisis.

Airspace closures that have grounded more than 20,000 flights since Saturday have left more than 1 million people stranded around the world, according to aviation data firm Cirium. Some were stranded on cruise ships. Chrissy Valdez, senior director of operations at online insurance marketplace SquareMass, said inquiries for more expensive “cancel for any reason” travel insurance have spiked 18 times this week.

Since Saturday, Iran has launched retaliatory attacks against the United Arab Emirates (home to Dubai International Airport, the world’s busiest airport in international passenger traffic, according to the Airports Council International), as well as Qatar, Jordan, Israel and Cyprus. The spate of attacks has left airlines with few options to repatriate travelers.

Days after the attack, the U.S. State Department told most residents of the area to leave immediately, with few options. The department said it is arranging charter flights for Americans wishing to return from Saudi Arabia, Israel, the UAE and Qatar.

“This is the quagmire the airline industry is in,” said Henry Harteveldt, a former airline executive and founder of travel consulting firm Atmosphere Research Group.

Other sectors of the travel industry are also dealing with the effects of the war. Debris fell nearby AccorThis weekend I went to the Fairmont The Palm Hotel in Dubai. The company said four people were injured, but no customers, visitors or employees were injured. Meanwhile, the iconic Burj Al Arab Hotel caught fire earlier this week after being struck by debris from an Iranian drone.

MSC Cruises’ ship MSC Eulivia, carrying more than 6,300 passengers, has run aground in Dubai, and the company has announced that it is working to secure flights for affected passengers. “We are asking our partners to prioritize guests,” the company said in a statement.

The cruise line said it was “working on other options to expedite repatriation, including charter flights from Dubai, Abu Dhabi, United Arab Emirates (UAE), and Muscat, Oman”, but that the situation on board “remains calm”.

MSC announced earlier this week that it would cancel its remaining flights from Dubai for the winter season. “While we understand this is a disappointing outcome, we are confident that affected guests will understand this decision,” the company said.

Aside from the COVID-19 health crisis that has halted most international travel, Harteveld called this week “frankly the most disruptive event we’ve seen since 9/11, when the United States chose to close its airspace. I’ve never seen an event that had such a long and geographically widespread impact on travel.”

The Iran war, the most serious military conflict of the year, is one of a series of obstacles threatening travel demand and revenues for hotels, airlines and cruise lines, as well as regional economies that rely heavily on travel, especially international travelers, who tend to spend more than domestic travelers.

Three days after 2026 began, the United States attacked Venezuela and captured President Nicolas Maduro and his wife, Syria Flores. The attack prompted the United States to close its airspace across the Caribbean, leaving many tourists stranded in expensive resorts and rental homes they had booked for vacations.

And in February, flights were suspended in parts of Mexico, including the coastal resort cities of Puerto Vallarta and Guadalajara, after violence erupted following the killing of a cartel leader by Mexican troops.

Management has already been forced to make costly changes, including rerouting and canceling routes, issuing flexible reservations and refund policies, grounding planes and completely changing flight plans, and discounting hotel rooms.

The costs of these disputes are still being tallied and include fuel costs, which along with labor costs are among the biggest expenses for cruise lines and airlines, and are typically passed on to consumers, meaning more expensive flights and stays may be an option.

For example, Australian airline Qantas told CNBC that its flight from Perth, Australia, to London would fly a route that would require a refueling stop in Singapore, but would also allow it to carry around 60 more passengers.

Travel company executives started 2026 on a typically upbeat note. Some airline executives, including some of the most profitable airlines in the United States, delta airlines and united airlinespredicting record profits this year.

The wars and other incidents erupted as the travel industry relied on premium options to attract wealthy customers who accounted for a larger share of overall spending. Losing more expensive travel hubs could be even more detrimental to those businesses and local economies.

In Mexico, for example, tourism accounts for nearly 9% of the economy, and the number of international tourist arrivals rose 13.6% to 98.2 million last year, spending nearly $35 billion, according to the country’s Ministry of Tourism.

Airlines are currently discouraging travel to Puerto Vallarta from the United States, at least in the short term. From April 3 through the end of the month, Delta Air Lines has cut service to the city, except for one flight per day from Los Angeles and Atlanta, according to Cranky Network Weekly, a newsletter that covers network changes in the airline industry. alaska airlines and southwest airlines The service was also suspended in March.

“Now that the headlines have shifted to the Middle East and bookings have rebounded, people will probably forget about PVR (Puerto Vallarta International Airport) concerns, but will look to capacity changes as a leading indicator,” Brett Snyder and Courtney Miller, authors of the newsletter, wrote in the March 1 issue.

The latest problems also occur three months before the FIFA World Cup, which will be held in cities in Canada, Mexico and the United States.

Some hotels in Mexico are also starting to notice the change.

Victor Lazo, manager of the Ribera del Rio Hotel in Puerto Vallarta, told CNBC that reservations are down about 10% compared to last year.

“In light of what happened, we have implemented some promotions,” he said, adding that prices have been reduced by 10% to 20% ahead of next month’s busy spring break and Holy Week seasons.

He added that the hotel was not near any problems such as roadblocks and that bookings had remained stable since then.

“It’s nothing like the beginning of the pandemic,” he said. “You can’t compare.”