A Trend in the Making: How Ongoing Conflict Could Reshape European Travel Demand

Planning trips has become more complex amid ongoing uncertainty in the Middle East. Long-haul travellers are shifting away from Gulf hubs like Dubai, Doha and Abu Dhabi, routing instead through transit points in Asia and Europe such as Singapore, Hong Kong, Tokyo, London, Frankfurt, Paris and Amsterdam. Airlines are adjusting schedules and offering flexible options, while passengers prioritise reliability, often paying premiums to secure bookings they can change if needed.

Rising jet fuel costs are a major factor. With the Strait of Hormuz largely closed, fuel prices have climbed from around US$95 per barrel in mid-February to about US$175 today, according to the IATA Jet Fuel Monitor, making fuel, normally up to a quarter of airline costs, a major driver of higher fares. Closed air corridors force longer routes and reduce aircraft utilisation, especially on long-haul flights. Some airlines have cancelled services, but demand remains strong as travellers book early to avoid further increases. If the conflict persists and prices solidify, this resilience could shift, with travellers favouring shorter, lower-spend trips over long-haul journeys and forcing additional operational adjustments.

Travel demand is being redirected rather than lost, and intra-regional travel is showing robust momentum within Europe. Destinations with slower bookings include the Eastern Mediterranean including Turkey, Cyprus and Egypt as well as parts of Greece, which face a ‘regional risk halo’ and route disruptions that increase travel time and costs. Meanwhile, the long-established favourites of Spain, Portugal and Italy continue to see strong bookings. As overall demand grows, interest is expanding to secondary cities in Northern and Southern Europe, as well as Southeastern Europe, particularly along the Adriatic Sea. TUI UK Managing Director Neil Swanson remarked that the Mediterranean region has grown in popularity in terms of amending travel plans and that for long-haul either the Caribbean or nonstop flights to Asia have had some wind in their sail.

In the medium term, we expect European travel patterns to be shaped by a shift in the composition of demand. International arrivals, who typically contribute higher revenue per stay, may decline slightly, partially offset by increased domestic and intra-regional travel. While this could reduce overall spending in hotels and facilities, the higher cost of long-haul travel is likely to encourage Europeans to allocate more to shorter trips, choosing premium experiences closer to home and largely helping to mitigate the reduction in long-haul international arrivals.

Europe is well positioned to capture current trends, with strong bookings across familiar and emerging destinations. Yet the situation is highly dynamic; when tensions ease, Middle Eastern countries are likely to reclaim displaced demand quickly. For hotel operators, agility is essential, as they must seize current opportunities while preparing for rapid shifts in travel flows and spending patterns.