Iran war threatens global travel industry as passengers grounded

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

As a result, Gong, 30, had her flight plans derailed, and she told CNBC she had to pay $1,600 to get to Shanghai, more than double the price of her original ticket.

She is one of millions of travelers swept from Iran to Mexico this year by war and other conflicts, problems that threaten a global tourism industry worth an estimated $11.7 trillion to the global economy, according to the industry group World Travel and Tourism Council. It shows that people far from falling missiles, drone attacks and other geopolitical flashpoints are not immune to ripple effects.

The US-Israeli attack on Iran sparked massive aviation, travel and safety crises.

More than a million people were stranded around the world due to the closure of airspace, which led to the suspension of more than 20,000 flights since Saturday, according to aviation data company Cirium. Some also commented on cruise ships. Inquiries for more expensive “cancel for any reason” travel insurance policies rose 18-fold this week, said Chrissy Valdez, chief operating officer at Squaremouth, the online insurance marketplace.

Since Saturday, Iran has launched retaliatory attacks on the United Arab Emirates — home to Dubai International Airport, the world’s busiest airport for international passenger traffic, according to Airports Council International — as well as Qatar, Jordan, Israel and Cyprus. Back-and-forth attacks on airlines have left few resources to repatriate travelers.

Days after the attack, the US State Department asked its citizens in much of the region to leave immediately, with few options at hand. The ministry said it is organizing charter flights for American citizens who wish to return from Saudi Arabia, Israel, the United Arab Emirates and Qatar.

“This has turned into an aviation quagmire,” 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 impact of war. Debris fell nearby AccorFairmont The Palm Hotel in Dubai over the weekend. The company said four people were injured, but none of them were guests, visitors or employees. Meanwhile, a fire broke out at the iconic Burj Al Arab hotel earlier this week after being hit by debris from an Iranian drone.

The company said that the MSC Euribia ship, which carries more than 6,300 passengers, is stranded in Dubai and the company is trying to provide flights to the affected guests. “We request priority for our guests from our partners,” the company said in a statement.

The cruise company said: “In order to expedite the repatriation process, we are working on other options such as charter flights” from Dubai and Abu Dhabi in the United Arab Emirates or Muscat in Oman, but the situation on board the ship “remains calm.”

Earlier this week, MSC said it would cancel its remaining flights from Dubai for the winter. “We understand that this will be disappointing, but we are confident that the affected guests will understand this decision,” she added.

Aside from the COVID-19 health crisis that has halted most international travel, Harteveldt described this week as “the most chaotic event we’ve seen, frankly, since September 11 when the United States chose to close its airspace. We haven’t seen anything that has had such a long-lasting and geographically widespread impact on travel.”

The Iran war is the most severe military conflict this year, but it is one of a series of obstacles that have threatened travel demand and the profits of hotels, airlines and cruise companies, as well as local economies that rely heavily on travel, especially international tourists, who tend to spend more than domestic visitors.

Three days later in 2026, the United States struck Venezuela and captured its president, Nicolas Maduro, and his wife, Celia Flores. The attack prompted the United States to close airspace throughout the Caribbean, stranding travelers, many of whom are staying in expensive resorts and rental homes they had booked for vacations.

Then in February, flights were suspended in parts of Mexico, including the coastal resort city of Puerto Vallarta and in Guadalajara, after violence erupted following the Mexican military’s killing of a gang leader.

Executives have already had to make costly changes: rerouting or canceling cruises, issuing flexible reservation and refund policies, delaying planes and changing flight plans entirely, or discounting hotel rooms.

The cost of these struggles is still being counted, including fuel costs, one of the biggest expenses for cruise companies and airlines along with labor, and is usually passed on to consumers, meaning more expensive tickets and stays can be more affordable.

For example, Australian airline Qantas told CNBC that its flight from Perth, Australia, to London will now travel on a route that requires it to stop to refuel in Singapore, although that will also allow it to carry approximately 60 other passengers.

Travel managers started 2026 as they often do: optimistic. Some airline executives, including those who work at America’s most profitable airlines, Delta Airlines and United AirlinesHe expects record profits this year.

War and other incidents broke out as the travel industry relied on premium options to attract wealthier customers, who accounted for a larger share of spending overall. Losing the base of more expensive flights could be a disadvantage for those companies and local economies.

In Mexico, for example, tourism makes up nearly 9% of the economy, and the number of international tourists rose 13.6% last year to 98.2 million people, spending nearly $35 billion, according to the country’s tourism ministry.

Now, airlines are pulling back on flying to Puerto Vallarta, at least from the United States in the near term. Delta cut its routes from April 3 through the end of the month to the city, except for once-daily flights from Los Angeles and Atlanta, according to the Cranky Network Weekly newsletter, which covers changes in the airline industry’s network. Alaska Airlines and Southwest Airlines It also cut service in March.

“Maybe people forget about PVR [Puerto Vallarta International Airport] “Concerns are now that headlines will shift to the Middle East and bookings will rebound, but we will be monitoring changes in capacity as leading indicators,” Brett Snyder and Courtney Miller, the newsletter’s authors, said in the March 1 issue.

These latest cases also come three months before the FIFA World Cup, which is scheduled to be hosted by cities in Canada, Mexico and the United States.

Some hotels in Mexico are starting to notice a change, too.

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

“We’ve had some promotions given what’s happened,” he said, adding that it has reduced prices by 10% to 20% ahead of the busy spring break and Holy Week period next month.

He added that the hotel had no problems, including roadblocks, and that bookings had stabilized since then.

“It’s not like the beginning of the pandemic,” he said. “There’s no comparison.”