With rising oil prices, jet fuel shortages, and the Middle East conflict disrupting travel plans, many tourists are opting for closer-to-home European trips and flexible vacation options this summer.
Tourists wait to view Santorini’s famed sunset on a Greek island in July 2024. However, Greg Abbott is planning his summer holiday with a different mindset. He intends to stay closer to home in Europe and has lined up a plan B due to concerns over rising airfares and potential cancellations. The 54-year-old British-based Australian plans a cycling trip with friends in Austria, attends a festival in Barcelona, and might even go for a yoga retreat in France. Yet, he doesn’t want to travel too far and is keeping his options open.
“We'll almost certainly be doing short-haul Europe and probably trains because they run on electricity,” Abbott explained, emphasizing that cost was the key factor against longer trips. “The prices are just crazy at the moment.”
Across Europe and beyond, tourists are reshaping their plans amid a backdrop of $100 oil, tight jet fuel supply, higher costs, and Middle East conflict disrupting popular routes. Many are booking later and building in flexibility.
Susanne Dickhardt, co-founder of camper van and motorhome hire firm Roadsurfer, noted that most travelers were adapting rather than cancelling their trips. They’re staying nearer home, driving more, and choosing formats that keep costs down.
“People get nervous; they don't want to travel anymore,” Jean-François Rial, CEO of tour operator Voyageurs du Monde, said. “We observe travellers becoming more cautious and deliberate.”
Tourism and aviation are among the sectors most exposed to the war. Slow-moving peace talks point to a prolonged stand-off, hitting Gulf airlines and popular hubs such as Dubai, while nearly doubling jet fuel prices.
Airline profits are under pressure. Air France-KLM expects its jet fuel bill to jump by $2.4 billion this year, while Lufthansa and British Airways owner IAG see rises of about $2 billion. US low-cost carrier Spirit went bust this month, stoking fears that others could follow.
European budget carriers with thin margins and limited fuel hedging, such as Wizz Air and airBaltic, face challenges but are less vulnerable than Spirit. Rohit Kumar from Morningstar warned that given summer is the most profitable period for airlines, any disruption to volumes or costs during this peak season would have a material impact on earnings.
Despite these challenges, demand overall remains resilient, according to airlines and officials. However, destinations are shifting with domestic travel gaining popularity. Spain, Greece, and Portugal are viewed as safer bets, with more self-drive holidays.
Ricardo Fernandez Flores, head of Spanish online travel agency Destinia, highlighted that well-connected, stable Mediterranean markets were attracting travelers. Gabriel Escarrer, CEO of Spain’s largest hotel chain Melia, expects strong bookings in “safe-haven” regions like Spain and the Caribbean.
Even business trips are shifting towards rail. Alvaro Ungurean from Trainpal reported a 25% rise in Eurostar ticket sales, while nearly twice as many Britons are looking to travel by train in France this year. Corporate relocation firm owner Diego Dutra is avoiding flying and may opt for a road trip instead of visiting family in Italy.
With soaring fares, Alice Woodhouse from Hong Kong plans to stay in Asia and offset costs using airline miles. Others are holding off booking until things “clear up.” Jerome Vayr from France-based Vacances Bleues noted that last-minute bookings are rising significantly, by around 15%, as travelers wait for inflation to stabilize.
In summary, the Iran war has reshaped summer holiday plans, with tourists opting for closer-to-home European trips and flexible vacation options. This shift reflects a cautious approach amid economic uncertainties and geopolitical instability.
