The German tourism industry faces a complex mix of geopolitical tensions and massive cost increases in the spring of 2026. According to recent surveys by the Munich-based Ifo Institute, sentiment among travel agencies and tour operators deteriorated further in April. The corresponding industry indicator fell to minus 43,5 points, underscoring the deep-seated uncertainty within the sector. The escalating conflict in the Persian Gulf is primarily responsible for this development, not only having a direct impact on popular transit hubs but also unsettling global energy markets.
Since the outbreak of military conflict in the Middle East, the price of jet fuel has more than doubled, forcing airlines and travel providers to drastically raise prices for vacations. While the industry hopes for some relief by the end of the summer season, bookings at major players like TUI are currently lagging behind expectations. This consumer reluctance stems from both security concerns and declining purchasing power in the face of inflation-driven airfares.
Impact of the Middle East crisis on booking behavior
The armed conflict in Iran severely impacted the travel industry in March and continues to have repercussions in the second quarter of the year. According to industry expert Patrick Höppner from the Ifo Institute, the uncertainty is causing many potential vacationers to postpone or cancel their plans. The situation is considered particularly critical for the upcoming 2026/27 winter season, as long-haul trips are often planned well in advance, and destinations in the Arab world, as well as transit connections via the region's major hubs, are now classified as high-risk.
Although the German Foreign Office eased some travel warnings for key transit countries at the end of April, the official assessment for the United Arab Emirates remains restrictive. Authorities continue to strongly advise against travel to this region, as the risk of sudden airspace closures or targeted attacks on infrastructure cannot be ruled out. For tour operators, this means a major organizational challenge: flight routes have to be extensively rerouted, which lengthens flight times and further increases operating costs due to higher fuel consumption. The industry is thus in a holding pattern, which is paralyzing its operations.
The explosion of kerosene prices and its consequences
A key burden on the aviation industry, and consequently on the entire tourism sector, is the development in the oil market. Since the start of hostilities in the Gulf, the price of kerosene has more than doubled. As fuel costs account for between 25 and 35 percent of total costs for airlines, depending on fleet efficiency, passing these burdens on to end customers is unavoidable. Industry observers report massive price increases for package holidays, which could particularly discourage families and low-income earners from traveling to these destinations.
In addition to the direct price increase, the discussion about potential physical bottlenecks in fuel supply is causing unease. Should the Strait of Hormuz remain blocked for an extended period, logistical difficulties in supplying major airports are likely. Travelers are highly uncertain, as no one wants to risk being stranded at their holiday destination due to a fuel shortage. This abstract threat is leading to a slight increase in demand for short-haul destinations within Europe, while the high-margin long-haul market is experiencing a massive collapse.
Subdued expectations among industry giants
The tense situation is also reflected in the balance sheets of major tourism companies. Industry leader TUI recently reported sluggish bookings for the summer season. The company, which is traditionally heavily dependent on stable flight connections and a predictable pricing structure, is facing a reluctance to spend that was not foreseeable at the beginning of the year. Many customers are waiting to see how the political situation develops before committing financially.
This leads to a paradoxical situation in the industry: While current business figures are poor due to costs and the geopolitical situation, long-term business expectations have improved slightly, according to an Ifo survey. This suggests that market participants are assuming a temporary crisis and hoping for a return to normalcy over the course of the next year. Nevertheless, experts warn that the permanent establishment of high airfares could fundamentally change travel behavior. Given the current global situation, the era of extremely cheap air travel appears to be over for now.
Strategic adjustments by tour operators
To counteract the downward trend, many tour operators are trying to make their offers more flexible. Free rebooking options and special insurance packages for emergencies are intended to regain customer confidence. At the same time, there is a shift in destinations. Regions that are geographically far from conflict zones and do not require flying over dangerous airspace are increasingly becoming the focus of marketing efforts.
Nevertheless, the core problem remains the cost structure in Germany. High airport fees, rising aviation security costs, and now exorbitantly expensive energy prices are turning air travel into a luxury. Travel agencies report that consultations have become significantly more time-consuming, as customers ask detailed questions about safety and price stability. However, these consultations are often not adequately compensated, further exacerbating the financial situation of many smaller agencies. The pressure to consolidate within the industry is therefore steadily increasing.
Outlook for the winter season and future price developments
Looking ahead to the second half of the year, uncertainty remains the dominant theme. If no diplomatic solution is found in the Middle East conflict, a further deterioration of the business climate is to be expected. The industry is preparing for a scenario in which last-minute offers become less frequent, as airlines prefer to reduce capacity rather than operate aircraft unprofitably amid high fuel costs. This could lead to a further tightening of supply, keeping prices consistently high even if demand falls.
Overall, the Ifo Institute's current survey reveals an industry in crisis mode. The recovery following the difficult years has been abruptly halted by new geopolitical realities. For travelers, this means that vacations will be more expensive in 2026, planning more complicated, and the choice of destinations more limited by external factors. Travel companies must now demonstrate that they possess the necessary resilience to weather this period of economic and political instability without permanently losing their customer base.