Iran war threatens global travel industry as passengers stranded

Zoey Gong, a Chinese medicine food 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 last Saturday.

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

She is one of millions of travelers swept up by war and other conflicts from Iran to Mexico this year, problems that threaten the global tourism industry that is worth an estimated $11.7 trillion to the global economy, according to industry group World Travel & Tourism Council. It is showing that people far from missile strikes, drone strikes and other geopolitical flashpoints are not immune to the knock-on effects.

The US and Israeli attack on Iran triggered massive aviation, travel and security crises.

More than a million people around the world were stranded due to the airspace closure that has grounded more than 20,000 flights since Saturday, according to aviation data firm Cirium. Some were also trapped on cruise ships. Inquiries about more expensive travel insurance policies “canceled for any reason” increased 18-fold this week, said Chrissy Valdez, senior director of operations at Squaremouth, an online insurance marketplace.

Since the February 28 attacks on Iran, that country has launched retaliatory attacks against the United Arab Emirates (home to Dubai International Airport, the world's busiest for international passenger traffic, according to the Airports Council International), as well as Qatar, Jordan, Israel and Cyprus. The back-and-forth attacks have left airlines with few resources to repatriate travelers.

Days after the attack, the US State Department told citizens in much of the region to leave immediately, given the few options they had at hand. The department said it is arranging charter flights for U.S. citizens who want to return from Saudi Arabia, Israel, the United Arab Emirates and Qatar.

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

Other sectors of the travel industry are also suffering the impact of the war. Debris rained down nearby Accor's Fairmont The Palm Hotel in Dubai over the weekend. The company said four people were injured, but none of them were guests, visitors or staff. Meanwhile, the iconic Burj Al Arab hotel suffered a fire earlier this week after it was hit by debris from an Iranian drone.

MSC Cruises' MSC Euribia ship, with capacity for more than 6,300 passengers, was stranded in Dubai and the company is trying to arrange flights for affected guests, it said. “We ask our partners to prioritize our guests,” the company said in a statement.

“To expedite repatriation, we are working on other options such as charter flights” from Dubai, Abu Dhabi, United Arab Emirates, or Muscat, Oman, but the situation on board “remains calm,” the cruise company said.

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

Leaving aside the Covid-19 health crisis that paralyzed most international travel, Harteveldt called this week “the most chaotic event we've seen frankly since 9/11, when the United States decided to close its airspace. We haven't seen anything that has had such a long-term, geographically widespread impact on travel.”

The Iran war is the most serious 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 local visitors.

Three days into 2026, the United States attacked Venezuela and captured its president, Nicolás Maduro, and his wife, Cilia Flores. The attack prompted the United States to close airspace across the Caribbean, stranding travelers, many of them 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 Guadalajara, after violence broke out following the killing of a cartel leader by the Mexican military.

Executives have already had to make costly changes: diverting or canceling trips, issuing flexible booking and refund policies, grounding planes and changing flight plans entirely, or discounting hotel rooms.

The cost of these conflicts is still being tallied, including fuel, one of the biggest expenses for cruise lines and airlines, along with labor, and which is typically passed on to consumers, but signs are emerging of how customers will be affected.

First: more expensive tickets and stays are expected.

united airlines Chief Executive Officer Scott Kirby said Thursday that jet fuel prices, which have risen 60% since the first U.S. and Israeli attacks on Iran last week, would hurt first-quarter results, if not also the second. That will likely quickly translate into higher airfares, he added.

Despite the increase in fuel, which accounted for 20% of United's operating expenses last year, according to a securities filing, with few flights operating in the Middle East, bookings have increased from regions such as Australia for United flights because it offers different routes to the US, he said.

Speaking outside an event at Harvard University, Kirby said demand has generally remained resilient since the conflict erupted.

Airlines around the world have been forced to take longer and more expensive routes due to airspace closures.

Australian airline Qantas, for example, told CNBC that its flight from Perth, Australia, to London will now take a route that will require it to refuel in Singapore, although that will also allow it to pick up about 60 other passengers.

Travel executives entered 2026 as they usually do: optimistic. Some airline executives, including those at America's most profitable companies, Delta Airlines and United, predict record profits within reach this year.

War and other incidents broke out as the travel industry has relied on premium options to attract wealthier customers, who account for a larger share of overall spending. Losing the basis for more expensive trips could be even more disadvantageous for those businesses and local economies.

In Mexico, for example, tourism represents about 9% of the economy and international tourist arrivals increased 13.6% last year to 98.2 million people, who spent about $35 billion, according to the country's Ministry of Tourism.

Now, airlines are stopping travel to Puerto Vallarta, at least from the United States in the short term. Delta cut routes from April 3 through the end of the month to the city, except for daily flights from Los Angeles and Atlanta, according to the weekly Cranky Network newsletter, which covers changes in the airline industry's network. Alaska Airlines and Southwest Airlines It also cut service in March.

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

The recent problems also come 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 beginning to notice a change.

Víctor Razo, manager of the Rivera del Río hotel in Puerto Vallarta, told CNBC that reservations are down about 10% compared to last year.

“We've had some promotions given what's happened,” he said, adding that this reduced rates by 10% to 20% ahead of the busy spring break and Easter period next month.

He added that the hotel was nowhere near the problems, which included roadblocks, and that bookings have since stabilized.

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