Italian travel agencies in difficulty: Easter trips at risk and reservations frozen. The Gulf crisis also pushes up the cost of flights and costs global tourism over 600 million dollars a day
Millions of euros burned. Tourism is already paying the price of the war in Iran. In Italy travel agencies record average losses of over 38 thousand euros per companywhile cancellations related to spring and the Easter holidays have already generated over 222 million euros in lost turnover. Globally, organized tourism is suffering a setback compared by operators to the beginning of the pandemic. According to the World Travel & Tourism Council the war in the Gulf causes over $600 million in losses every day. And the dear flights is already visible on international routes, with the real risk of widespread increases in ticket prices in the coming months.
Tourism, the Gulf crisis weighs on Italian agencies: average losses of 38,800 euros
In Italy there is widespread paralysis in the travel agency sector, according to the photograph taken by the Fiavet Confcommercio Observatory. The 65% of agencies is managing more than 16 travel practices in crisis situationsincluding cancellations, modifications and refund requests. 33% instead find themselves facing over 30 problematic practices for each single agency. The economic damage is immediate. In the last week alone the estimated average loss is equal to 38,800 euros per agency, with almost half of the companies (48%) which he declares losses exceeding 50 thousand euros. Above all, the operational difficulties in the Gulf hubs, which are fundamental for intercontinental connections, weigh heavily. The United Arab Emirates is the destination with the highest number of critical issues, reported by 92% of the agencies, followed by Qatar, indicated by 88% of the sample. The problem does not only concern tourism directed towards these countries, but the entire system of air connections: many flights towards Asia, Oceania and the Indian Ocean pass through these hubs.
Cancellations and frozen reservations: over 222 million losses for Easter and fears about summer
The heaviest consequences are being seen on long-haul bookings and spring holidays, including Easter. According to Fiavet analysis, for destinations such as China, Thailand, the Maldives, India or Australia there are 38% of definitive cancellations and 45% of bookings frozen pending developments. In practice almost four out of ten travelers have canceled their tripwhile almost half prefer to wait before confirming departure. Only 17% of customers agreed to change destination. The result is an estimated loss of over 222 million euros in turnover for Italian organized tourismonly on missed reservations for Easter and spring. And the crisis also affects incoming tourism to Italy: 45% of agencies report blocking bookings from Gulf countries and Israel.
And new pressures are feared for the summer on flight prices due to the increase in the price of crude oil. According to 62% of travel agents, companies could also apply fuel adjustments to tourist packages already sold, while only 9% of operators believe that rates can remain stable thanks to the oil covers already stipulated previously by the carriers.
World tourism: 600 million dollars in losses per day
The impact of the war does not stop at the Italian market. Globally, the organized travel sector is facing one of the most serious crises in recent years. According to the World Travel & Tourism Council are there over $600 million in losses every day between canceled flights, canceled reservations and reduction in airport operations. The hubs of the region (Dubai, Abu Dhabi, Doha and Bahrain) represent a central hub for international air traffic, with approximately 526 thousand passengers per day. When these hubs slow down or stop, the impact ripples throughout the tourism supply chain: airlines, hotels, restaurants, cruises, car rentals and travel-related services. According to the WTTC, security-related crises historically have relatively quick recovery times: in some cases even two months.
Expensive flights: oil and longer routes push up ticket prices
And for those who are leaving and booking the expensive flights can already be seen. The main reason is the price of the petrolium, which directly affects the airlines’ accounts. Fuel accounts for about a quarter of a flight’s operating costs. When the price of crude oil rises, companies tend to pass on part of the increase to tariffs. In 2022, after the Russian invasion of Ukraine, airline ticket prices rose by 28%. And some signs have already arrived. Qantas Airways and Air New Zealand have announced the first increases in ticket prices, while Hong Kong Airlines has announced an increase in fuel surcharges of up to 35.2% on some routes. The factors also weigh changes to routes. The closure or restriction of several airspaces in the Gulf forces airlines to take longer and more expensive routes, increasing fuel consumption and reducing available capacity. The decisive factor remains time: the longer the instability lasts, the greater the pressure on global airfares.
