WAR, CONNECTIVITY, AND CONFIDENCE: THE POTENTIAL ECONOMIC CONSEQUENCES OF A U.S - IRAN CONFLICT ON TOURISM AND HOSPITALITY IN THE MIDDLE EAST THROUGH A RAPID ASSESSMENT USING A MIXED-METHOD APPROACH

Abstract

The goal of this study is to examine the economic impact of the 2026 U.S.-Iran war on tourism and hospitality in the Middle East and to highlight the reasons for the varying economic losses experienced by the different tourism and hospitality destinations. A sequential explanatory mixed-methods rapid-assessment design (secondary quantitative indicators and qualitative documentary analysis) is used. The statistics are quantitative and include international arrivals, the exposure of visitor spending, airline passenger demand and capacity, hotel-market performance and selected national tourism receipts and arrivals from January 2025 to July 2026. The qualitative corpus consists of official travel warnings, conflict zone notices issued by aviation authorities, macroeconomic assessments of the situation from a multilateral perspective and analyses of the situation by the tourism industry. The evidence is showcased in a joint-display approach that focuses on accessibility, risk perception, operating costs, composition of demand and crisis governance. A solid regional recovery was disrupted by the conflict. UN Tourism revealed that tourist arrivals in the Middle East fell 14% year-on-year in the first quarter of 2026, and IATA reported that March, April and May saw year-on-year demand drops of 60.8%, 48.1% and 28.8% for Middle Eastern carriers, respectively. International tourism spending was being impacted by a minimum of US$600 million a day during the acute phase, estimated WTTC. The impact was uneven as the Gulf hubs exposed to international travel saw the highest level of disruption in both aviation and hotel sectors as well as Jordanian tourism receipts dropping 5.3% in the first half of 2026, while Saudi domestic and religious tourism helped to buffer hotel demand. Practical implications. Single aviation resilience system should be established for aviation continuity, clear and effective communication of security, flexible booking policies, workforce retention, SME liquidity and market diversification by governments and firms. Originality/value, the article offers a first attempt to integrate an assessment of the conflict in a transparent approach to the data cut-off and clearly distinguishes observations from industry forecasts and calculations of scenarios.