By Doyinsola Oladipo and Joanna Plucinska
NEW YORK/LONDON (Reuters) - Travelers (NYSE:TRV) are canceling or postponing planned vacations to the Middle East and North Africa due to fears of the Israel-Hamas conflict worsening, and as touring companies have also altered itineraries and canceled flights.
Leisure travel demand to the region was hit after Israel said the Palestinian Islamist group Hamas killed 1,400 people in southern Israel on Oct. 7, and Israel responded with air and ground strikes on Gaza that Palestinian authorities say have killed more than 9,000.
Major airlines extended temporary halts on flights into Israel through the end of the year while cruise operators are shifting itineraries to avoid neighboring countries as well. Travel operators say the war is affecting demand for travel to nearby nations including Egypt, Jordan and Turkey.
"We are seeing clients cancel cruises like an Egypt Nile river cruise as far out as December 2024 due to concerns with the war," said Todd Elliott, CEO of Orlando, Florida-based Cruise Vacation Outlet, a travel agency.
Cruise operator Norwegian Cruise Line Holdings told investors on Wednesday that it was seeing a rise in cancellations and a slowdown in bookings to the region, primarily in short-term reservations. Both Norwegian and Royal Caribbean Group changed their 2024 itineraries to avoid ports in Israel.
Washington-based startup booking platform @Hotel said it has seen a 70% decline in new bookings for countries in the region. Over 40% of trips to Egypt in November and December have already been canceled on the platform, said CEO Konrad Waliszewski.
Cancellation rates in Turkey and Cyprus have doubled for November and December, he said.
Still, some industry representatives say they expect the effect to be short-lived. "In terms of demand, based on the CEOs that I've spoken to, they're saying that they can't identify an impact at this stage," said Willie Walsh, head of the International Air Transport Association, an airlines trade group.
German airline Group Lufthansa said on Thursday their Middle East bookings have not been affected by the war, with only an initial dip when the conflict started.
CANCELLATIONS AS FAR AS OMAN
Hotel operator Marriott International said demand has softened and it has started to see some cancellations for its 27 hotels in Lebanon, Jordan, and Egypt, the company's chief finance officer Kathleen Oberg said on an earnings call.
"While the conflict in Israel is very geographically limited so far, we suspect some cruise bookers are hesitant to book a European visit, even to the western Mediterranean," said Truist analyst Patrick Scholes in a note.
Flight bookings to Egypt have decreased by 26% year-on-year, to Jordan by 49%, and to Lebanon by 74% since the onset of the war, according to flight ticketing data firm ForwardKeys, based in Valencia, Spain.
Spanish travel agency Essentialist said it has canceled 75% of trips to the extended Middle East and Northeast Africa region.
Australia-based Intrepid Travel said more customers are looking to cancel trips to Egypt and Jordan, particularly those due to travel at year-end, said Matt Berna, its president for the Americas.
The conflict's effect on travel demand to the Middle East may extend beyond the holidays and even just neighboring countries.
"Our company has a charter flight from Norway to Sharm el Sheikh, Egypt, and for three or four weeks from now we have no new bookings," said Khaled Ibrahim, co-founder of the Middle East Travel Alliance, which works with destination management firms that connect travel agencies and local providers.
About 40% of tours in Jordan have been canceled, 20% in Egypt, 15% in Oman and 10% in the UAE, he said.
"Even Oman is receiving cancellations even though it's so far away (from the war)."