Tourism under pressure in the Eastern Mediterranean

According to data cited by Reuters, the uncertainty generated by the conflict is resulting in increased booking cancellations, weakened demand for new reservations, and an overall deceleration in tourism activity.

In Cyprus, in particular, conditions have deteriorated markedly. Daily cancellation rates for short-term rentals surged from approximately 15% prior to the outbreak of the conflict to levels reaching up to 100% in the immediate aftermath. Although the situation appears to be gradually stabilizing, cancellation rates remain elevated at around 45% through the end of March. This trend underscores the heightened caution among travelers, who are increasingly influenced by the broader geopolitical instability in the region.

At the same time, the Cyprus Hotel Association reports a decline of nearly 40% in bookings for March, with a comparable decrease anticipated for April. Industry stakeholders have expressed significant concern, as this period traditionally serves as a precursor to the summer season, which is critical for overall annual revenue. Representatives of hotel establishments note that cancellations have persisted since early March, contributing to a climate of ongoing uncertainty regarding the months ahead.

Nevertheless, there remains cautious optimism that conditions may improve in the coming months. Tourism authorities emphasize the importance of safeguarding the peak season—namely the summer months—during which tourist arrivals are typically at their highest. Should the current slowdown persist into May, there is a tangible risk of more severe repercussions for the destination as a whole.

The ramifications of the conflict extend beyond tourism and into Cyprus’s broader economic outlook. The Central Bank has revised its growth forecast for 2026 downward to 2.7%, from a previous estimate of 3%. This adjustment is based on the assumption that the conflict will last approximately two months; however, any prolongation could further exacerbate the situation.

Meanwhile, low-cost carriers such as EasyJet and Jet2 are reporting reduced demand for destinations including Cyprus and Turkey. Travelers appear to be shifting toward perceived “safer” alternatives in the western Mediterranean, with Spain emerging as a principal beneficiary of this reallocation.

In Greece, the impact is comparatively milder, yet clearly evident. Aegean Airlines has recorded a double-digit decline in bookings for the summer season, particularly from key markets such as Israel and the Gulf countries. This development is noteworthy, given that these markets have strengthened in recent years and constitute an important pillar of growth for Greek tourism.

A broader slowdown in advance bookings is also being observed, according to industry stakeholders. Although there was a temporary uptick in flight reservations—driven by travelers seeking to secure tickets ahead of potential fare increases linked to rising oil prices—the overall outlook remains subdued. Additionally, demand from major markets such as Northern Europe and the United States has weakened, further intensifying concerns.

Despite these challenges, experts emphasize that tourism momentum prior to the outbreak of the conflict had been particularly robust, providing a degree of resilience and a basis for cautious optimism. Nonetheless, the situation remains fluid and is largely contingent upon the duration and intensity of geopolitical developments.

The period ahead will be critical for both Cyprus and Greece, as it will largely determine whether current losses can be recouped or whether they will leave a more lasting imprint on their respective economies.

INSETE: Positive indications for the current tourism season

The tourism season is commencing under favorable conditions, with increased demand from April supporting expectations for strong overall performance.

Available seats on international flights to Greece are projected to reach 30.6 million, representing an 8.3% increase compared to 2025, according to INSETE’s Airdata tracker.

April, marking the start of the season, records 2.31 million available seats (+4.9%), followed by continued growth in May (3.76 million, +7.1%) and June (4.77 million, +5.6%). Peak capacity is expected in July and August, with 5.58 million and 5.61 million seats respectively, while elevated levels are also projected for September. Notably, October shows a strong increase (+20.6%), contributing to the extension of the tourism season.

Despite ongoing geopolitical tensions, the market has thus far demonstrated resilience, maintaining demand at relatively high levels, particularly at the beginning of the season.

In terms of source markets, the United Kingdom leads with 6.18 million seats (+9.7%), followed by Germany (5.2 million, +10.1%), as well as Italy, France, and the Netherlands. The United States also records a modest but positive increase.

However, April shows a significant decline in demand from Israel (-46%) and a slight decrease from the United States (-3.3%), while flows from the United Kingdom and France are on an upward trajectory.

The coming months will determine whether this positive momentum can be sustained amid ongoing pressures stemming from the crisis in the Middle East.