New modelling from Tourism Economics, part of Oxford Economics, paints a stark picture for travel demand across the Middle East in 2026 as a result of the escalating conflict involving Iran.

Prior to the outbreak of hostilities, the region had been forecast to enjoy strong double-digit growth in international arrivals this year. However, Tourism Economics now outlines two potential scenarios — and both represent a dramatic reversal of that outlook.

In the more optimistic case, where the conflict is resolved within a few weeks, international arrivals to the Middle East would still fall by around 11% year-on-year. That would translate into approximately 23 million fewer visitors compared with earlier projections, wiping out an estimated US$34 billion in tourism spending.

Should the conflict persist for around two months, the downturn deepens significantly. In that case, arrivals across the region could drop by roughly 27% in 2026, equating to as many as 38 million lost visitors and around US$56 billion in foregone tourism receipts.

The modelling shows that while Gulf Cooperation Council (GCC) destinations would suffer the largest losses in absolute visitor numbers — due to their scale and heavy reliance on air connectivity — percentage declines could be even sharper in non-GCC markets that had been expected to rebound strongly this year. Countries at the centre of the conflict, including Israel and Iran, face particularly steep reversals as recovery prospects are derailed.

According to Tourism Economics, the projected declines are driven by two interlinked forces: operational disruption and weakened traveller confidence.

On the operational side, widespread airspace closures and flight cancellations across multiple countries are severely restricting access to and through the region. Even once airspace reopens, airlines are expected to prioritise repatriation of stranded passengers and residents, meaning a slower restoration of normal schedules. In a prolonged conflict scenario, flight networks would take longer to stabilise, compounding the impact on visitor flows.

At the same time, sentiment effects are expected to weigh heavily on demand well beyond the immediate period of disruption. Even in a short-lived conflict, travel confidence is likely to remain subdued through the second quarter, with only gradual improvement thereafter. In a longer conflict, concerns about renewed escalation could dampen bookings for much of the year.

Destinations not directly involved in the fighting are also expected to feel the effects. GCC countries and Jordan, for example, are projected to experience reduced demand largely due to perception and safety concerns rather than infrastructure damage. While these markets may recover more quickly if stability returns, the depth and duration of the downturn depend heavily on how long hostilities continue.

Tourism Economics also highlights the Middle East’s critical position in global aviation. With a significant share of international passengers transiting through regional hubs, disruption affects not only inbound tourism but also long-haul travel between Europe, Asia-Pacific and North America. Rerouted flights, higher fuel costs and reduced capacity are likely to place upward pressure on fares, further weighing on forward bookings.

Taken together, the analysis from Tourism Economics underscores how quickly geopolitical instability can reverse growth trajectories — and how both physical disruption and traveller psychology shape the scale of tourism losses.