BERLIN/ATHENS (dpa-AFX) - The conflict in the Middle East is increasingly becoming a headwind for the travel industry's summer season. "Uncertainties stemming from geopolitical developments are leading to a noticeable reluctance to book, though without fundamentally weakening underlying demand," Albin Loidl, President of the German Travel Association (DRV), told the Deutsche Presse-Agentur. "At the same time, rising costs and operational challenges are exerting additional pressure on the sector."

Many travelers are pivoting to alternative destinations. Overall, there are strong indications of a temporary pause - "with a stabilization and a pick-up in demand as soon as the situation calms down," Loidl said.

Industry Sentiment Sours

This trend is also reflected in industry expectations. According to the Ifo Institute, the business climate for travel agencies and tour operators darkened significantly in March. The sector indicator plunged to minus 41.7 points, down from minus 14.8 points in February. Companies' assessments of their current situation and their outlook for the coming months have deteriorated sharply.

"The geopolitical situation is causing high levels of uncertainty among travelers and travel companies, particularly for trips involving transit through Gulf states in the Middle East," said Ifo expert Patrick Höppner. Consequently, many providers have already had to process rebookings and cancellations.

Destinations in the Eastern Mediterranean, situated closer to the crisis region, are currently seeing greater hesitation in new bookings, the DRV added. This tends to benefit destinations in the Western Mediterranean - although higher prices and limited capacity are acting as a brake on this shift.

Shifts in Travel Destinations

Western European destinations such as the Canary and Balearic Islands, as well as Cape Verde, are particularly in demand, Tui stated upon inquiry. Selected long-haul destinations in the Caribbean are also attracting interest. Conversely, destinations in the Gulf and parts of Asia are currently performing more weakly - partly due to restricted connecting flights. The Hannover-based group is also observing "strong restraint" regarding travel to Turkey.

Overall, prices are hovering at a moderately elevated level. For trips already booked, they remain stable. While rising kerosene prices are a concern for the industry, Tui has already hedged approximately 85 percent of its fuel requirements for the summer. However, how prices will evolve leading up to the summer holidays remains an open question: "Much depends on the resolution of the conflict in the coming days."

High Demand, but Regional Disparities

A similar picture is emerging at Dertour, the industry's number two. "We see that interest in travel remains fundamentally high. However, there is an increased need for consultation," said Chief Product Officer Sven Schikarsky. Guest numbers for the summer holidays are slightly above the previous year's level. Classic Western Mediterranean destinations such as Spain or Italy remain popular, and demand for Greece also remains robust.

Hoteliers in Greece currently view the situation as relatively stable. The greater distance from the crisis region ensures that demand from Europe remains steady. At the same time, they emphasize that the further course of the season will depend heavily on the geopolitical situation. The consequences are more evident in Cyprus. The island is located close to the crisis region, and its airports recorded a 15.3 percent year-on-year decline in March. The government has since ramped up its international tourism marketing.

Airfares Could Rise Further

The geopolitical situation is also impacting aviation costs. The DRV anticipates that higher kerosene prices could lead to rising airfares in the medium term. Lufthansa has already implemented price increases, according to its own statements, yet demand for travel remains unchanged.

The company considers itself better protected against price volatility through fuel hedging. Yet uncertainty persists: "Because the geopolitical environment remains very volatile and characterized by short-term changes and market fluctuations, ticket prices may increase further," a Lufthansa spokeswoman explained.

More Domestic Holidays

Against this backdrop, Germany is coming into sharper focus for many travelers. According to the German Tourism Association (DTV), 41 percent of Germans intending to travel in the next three months plan to spend their holiday domestically; 15 percent even plan two to three domestic trips. "This means Germany continues to have very high relevance as a travel destination," said Managing Director Norbert Kunz.

Domestic tourism will temporarily benefit from the geopolitical security situation, Kunz said, citing initial figures from tour operators. However, high energy and fuel prices, as well as the overall increase in the cost of living, are dampening the outlook. "This means holiday durations could be shortened, or day and weekend trips reduced."/kge/DP/zb