PARIS
Greg Abbott is planning his summer holiday with half an eye on the Iran war. He intends to stay closer to home in Europe and is lining up a plan B, wary of rising air fares and cancellations.
The 54-year-old Britain-based Australian is planning a cycling trip with friends in Austria, a festival in Barcelona and possibly a yoga retreat in France. But he doesn’t want to go too far and is keeping travel options open.
We’ll almost certainly be doing short-haul Europe, and almost certainly be doing trains, because they run on electricity, said Abbott, head of operations for a broadcasting company, adding cost was a key factor against longer trips.
The prices are just crazy at the moment. Across Europe and beyond, tourists are reshaping plans in a world of $100 oil, tight jet fuel supply, higher costs and Middle East conflict disrupting popular routes. Many are booking later and building in flexibility.
We observe travellers becoming more cautious and deliberate, said Susanne Dickhardt, co-founder of camper van and motorhome hire firm Roadsurfer.
Most are adapting rather than cancelling, she said, staying nearer home, driving and choosing formats that keep costs down.
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.
You’ve got a war happening – a major war, said Jean-Francois Rial, CEO of tour operator Voyageurs du Monde, adding his firm had seen business drop around a quarter in March, easing to about a 10% decline in April.
People get nervous; they don’t want to travel anymore.
Airlines warn 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.
U.S. low-cost carrier Spirit went bust this month, stoking fears others could follow. European budget carriers with thin margins and limited fuel hedging, such as Wizz Air and airBaltic, face challenges, though are less vulnerable than Spirit, said Rohit Kumar, vice president of corporate ratings at Morningstar.