The US/Israel-Iran war has delivered the steepest shock to global travel since the pandemic. Over half of scheduled flights in the region were cancelled in the first two weeks, oil surged 30% to USD92.3 per barrel in March with projections reaching USD115 by July, and major hubs from Dubai to Doha saw capacity plunge by 55-85%. Yet every crisis reshapes the industry. The question is not whether travel will recover, but what strategic lessons will separate those that return stronger and gain a competitive edge in resilience.
Aviation under pressure, but not grounded
The war has had a global ripple effect on aviation and compressed a decade of competitive realignment into months. Brent crude is projected to remain 12.5% above pre-crisis levels to the end of 2027, fundamentally resetting airline cost structures. Jet fuel is approaching USD200 per barrel – double pre-war levels – becoming the largest aviation cost component for many carriers, overtaking labour and aircraft costs. Airlines with lean balance sheets and fuel-hedging programmes are absorbing cost shocks; those without are passing increases to consumers or reducing operations and risk losing share to more resilient competitors.
Gulf hubs, which handled over 200 million passengers in 2025, are experiencing the severest capacity squeeze. Dubai International, the world’s third largest airport by passenger traffic in 2025, is operating at 40-45% capacity, with Emirates at 70-75% of normal schedules. This is creating short-term demand for European and Asian carriers as an alternative to long-haul traffic previously routed through Gulf hubs. The hub-and-spoke model behind GCC aviation’s rise is proving vulnerable; point-to-point connectivity and route flexibility are emerging as key strengths. Long-haul demand generally faces pricing elasticity tests as consumers weigh premium fares against perceived value.
Low-cost carriers may benefit from near-term downtrading on price and a consumer shift towards more regional destinations but they, too, face asymmetric pressure. They are more exposed to fuel price volatility than legacy carriers with broader revenue streams. Simultaneously, corporate travel managers are implementing travel bans and restricting routes, possibly favouring established carriers with proven crisis management capabilities.
Crisis playbooks: What travel learned (and forgot)
Previous crises greatly impacted global travel, illustrating potential for resilience-building evolution. The Global Financial Crisis impacted budget seekers and premium spenders alike and drove the rise of value tourism, democratising travel but compressing margins. The pandemic forced a global reset and drove rapid digitalisation – contactless check-in, dynamic rebooking, supply chain diversification – and proved that resilience is a more compelling competitive advantage than “growth at all costs”. The war in Ukraine demonstrated that regional crisis can have global spillover through airspace closures, yet remain geographically contained.
24% of consumers chose “safe destination” as their top destination feature in 2025
Source: Euromonitor Voice of the Consumer: Travel Survey, fielded January to February 2025
The US/Israel-Iran war is testing which lessons have stuck. Some things appear to be working: instant digital notifications, dynamic crisis communication, operational agility. TUI’s repatriation of 10,000 stranded customers showcased coordinated logistics at scale. Hotels across Dubai and the Gulf pivoted to extended-stay models and local audience targeting, maintaining 25% occupancy – above a 20% breakeven threshold – through staycations, work-from-hotel packages, and deep discounts for regional guests. Governments have provided support. The UAE government paid for stranded passengers to extend their stay as needed.
Other lessons are still being learned: AI-driven customer support, despite years of investment, failed to provide real-time assistance to stranded passengers at scale. The industry’s over-reliance on centralised hub-and-spoke models has created single points of failure. Critically, the US/Israel-Iran war is providing another chance for travel to adapt and come back stronger.
Transformation outlasts disruption
Travel spending in Middle East and Africa is forecast to grow 47.7%, adding USD50.7 billion in incremental value, over the next five years as governments double down on tourism investment. That growth is now at risk. The question is how quickly that trajectory can be preserved. Initial scenario modelling with Euromonitor’s Travel Forecast Model projects the UAE faces a 6-19% decline in 2026 travel spending if the conflict were to end quickly.
The strategic pivots being implemented now – route flexibility, premium focus, regional marketing, extended-stay hospitality, dynamic pricing – are not temporary fixes. They are structural adaptations drawn from lessons learned across the past two decades and beyond. The industry does not merely recover from crises; it evolves through them. The operators that internalise that distinction will define the next chapter of global travel.
Download our report, Navigating the Impact of the US/Israel-Iran War on Travel, for in-depth analysis and strategic recommendations across aviation, hospitality and online travel.