Representative ImageGeopolitical volatility, airspace risk, and oil price pressure are reshaping Asian outbound travel in ways that most destination planning cycles are not built to absorb. The COVID shock offered a rehearsal. The industry did not fully use it.
By Dr. Jens Thraenhart | CEO, Chameleon Strategies; Founder, Saudi Outbound
Chameleon Strategies | UN Tourism Affiliate Member
Across two decades of working in tourism across Asia, the Middle East, the Caribbean, and North America, I have watched the industry repeatedly mistake stable periods for the baseline. The planning assumption, rarely stated explicitly but embedded in every budget cycle and capacity decision, is that the current conditions will persist long enough for the forecast to hold. They usually do not.
That observation is not pessimism. It is the pattern. And the pattern is asserting itself with unusual force across several pressure points simultaneously: active conflict disrupting the world's most critical aviation corridors, bilateral tensions reshaping connectivity across Asia, and intra-regional conflicts producing tourism damage through mechanisms that destination planners rarely model in advance.
The Airspace Problem: No Longer Theoretical
Iran's airspace is a primary routing corridor connecting South Asia, Central Asia, and East Asia to Europe. IATA estimated that 10 percent of all global international Revenue Passenger Kilometers passed through Middle East airports in 2025. That figure gives some sense of what is at stake when the region destabilizes. Two escalation cycles in 2025 and one in early 2026 demonstrated it concretely.
In June 2025, Israel and Iran exchanged missile strikes. Iran, Iraq, and Jordan closed their airspace. Ben Gurion Airport shut entirely. Emirates suspended flights to Tehran, Baghdad, and Basra through June 30. Etihad suspended Abu Dhabi-Tel Aviv through mid-July. Iran's parliament voted to close the Strait of Hormuz. A ceasefire agreed on June 24 paused hostilities, though EASA maintained its warning against operating in Iranian, Iraqi, Israeli, and Jordanian airspace and described the ceasefire as fragile.
The second cycle began February 28, 2026, when US and Israeli strikes on Iranian targets triggered Iranian missile and drone retaliation across the Gulf. Iran closed its airspace. Bahrain, Kuwait, Syria, and large sections of UAE and Qatari airspace closed simultaneously. Dubai Airport suspended operations on March 7 after a drone struck near Terminal 3. Qatar Airways began ferrying widebody aircraft to Teruel Airport in Spain for storage. Emirates operated at approximately 90 percent of its pre-conflict levels; Etihad dropped to roughly 15 percent of normal Abu Dhabi capacity. Cathay Pacific suspended Hong Kong-Riyadh. Virgin Atlantic withdrew London Heathrow-Dubai for the rest of the winter season. With more than 20,000 passengers stranded across UAE airports, the UAE General Civil Aviation Authority announced on March 1 that the state would bear all accommodation and meal costs for affected travelers. Qatar Tourism issued a parallel circular to hotels covering approximately 8,000 stranded transit passengers. The UAE also issued more than 15,000 temporary entry visas so transit passengers held in sterile zones could move into hotels while awaiting onward connections. Both were notable responses: crisis management that absorbed the financial burden that would otherwise have fallen on individual travelers and, equally, protected the long-term reputational position of both countries as reliable transit and tourism hubs.
The oil cost channel runs in parallel. The Strait of Hormuz handles approximately 20 percent of global oil supply. Any credible closure threat pushes crude prices up, which transmits directly into jet fuel costs. IATA estimated jet fuel averaged USD 86 to 87 per barrel in 2025, already accounting for 25 to 26 percent of airline operating costs at baseline. That share climbs further under a price spike. The arithmetic converts quickly into surcharges on routes serving price-sensitive traveler segments, which describes a significant portion of Asian outbound travel.
Several of the Asian outbound markets I have worked with directly contain large segments of travelers for whom even a moderate fuel surcharge increase represents a genuinely meaningful share of total trip budget. Pakistan, Bangladesh, Kazakhstan, Uzbekistan: these are markets where trip affordability is real, not theoretical. The gap between geopolitical risk as an abstract discussion and geopolitical risk as a suppressor of actual booking decisions is precisely that surcharge.
Russia, China, and the Slower-Moving Disruptions
The Russia-Ukraine airspace closure is now in its fourth year and has not resolved. Russian airspace remains closed to most Western carriers, and the routes it once served between Western Europe and East Asia now operate on longer paths, carrying permanently elevated fuel costs. Russian and Chinese carriers retain access to polar and Russian corridor routing, giving them a structural cost advantage on these routes that is not temporary.
For destinations in Europe competing for Japanese, South Korean, or Chinese travelers, that asymmetry in access costs is already embedded in fare comparisons. It is worth understanding, rather than treating as background noise.
US-China bilateral tension has suppressed direct air connectivity and created visa friction that extends well beyond formal policy. Chinese visitors to the United States remain significantly below 2019 volumes, constrained by a combination of reduced frequency, processing delays running to several months in some consular posts, and a consumer sentiment effect that operates even when no formal restriction exists. I have seen this pattern before, in other bilateral relationships, and the consumer sentiment component is consistently the most underestimated by destination marketers who focus exclusively on the policy dimension.
Closer to Home: Three Intra-Asian Conflicts
The Middle East commands the most attention in aviation terms, but three conflict situations within Asia itself carry direct tourism implications for the markets covered in this analysis.
The Thailand-Cambodia border conflict, which escalated into sustained armed clashes from mid-2025, is the most instructive for regional destination planners. The dispute centers on colonial-era boundary claims around ancient temple sites, particularly Preah Vihear. Fighting produced more than 100 deaths and displaced over half a million civilians before a ceasefire took effect on December 27, 2025, which itself was violated within days. Cambodia's Asia-Pacific arrivals fell 20 percent year on year in 2025, according to its Ministry of Tourism, with Thai visitors dropping over 50 percent. On the Thai side, Koh Chang and Koh Kood, resort islands in Trat Province that had reached 90 percent occupancy heading into peak season, saw occupancy collapse to roughly 20 percent. Insurers withdrew coverage for conflict zones. Government advisories from the US, UK, and Australia triggered mass cancellations. The Kasikorn Research Center estimated the conflict could reduce Thai GDP by 0.4 percent if extended into 2026. What strikes me about this case is how geographically small the conflict was, occupying less than five percent of Thailand's landmass, and how large its demand footprint became. The mechanism was not physical inaccessibility. It was the combination of insurance withdrawal and government advisories, which operated across a radius far wider than the actual fighting.
Myanmar remains in a different category entirely. The civil war that began after the February 2021 military coup continues, with active fighting across Kachin, Shan, Rakhine, Sagaing, and other states. A magnitude 7.7 earthquake near Sagaing in March 2025 added infrastructure damage to an already severely constrained tourism environment. The US, Australia, and Canada all carry Do Not Travel advisories for Myanmar, and official visitor arrivals were approximately 1.2 million in 2024, primarily from neighboring Asian countries rather than the longer-haul international markets. Myanmar is not a viable inbound destination at scale and is not a meaningful source of outbound volume for destinations featured here. It is relevant to this analysis because its instability contributes to regional safety perceptions and because its eventual stabilization, if and when it comes, would represent a substantial bilateral market opportunity in multiple directions.
The South China Sea presents the third and most structurally significant risk for the region's tourism horizon. Several overlapping maritime boundary claims in the South China Sea, including China's nine-dash line, have produced recurring incidents in 2025 and 2026. In September 2025, China declared a nature reserve at Scarborough Shoal; both the US and Philippines stated the declaration had no basis in international law. In October 2025, a Philippine government vessel was damaged in an incident near Thitu Island, in waters the Philippines considers part of its exclusive economic zone. The Philippines and the United States have deepened their defense cooperation, with over 500 joint military exercises planned for 2026. As 2026 ASEAN Chair, the Philippines is pushing for a binding Code of Conduct, though structural disagreements across the parties make a near-term resolution unlikely. For tourism, the immediate operational risk to flight paths is low. The longer-term risk is to traveler confidence in the Philippines and Vietnam as destinations if incidents escalate, and to the positioning of both countries in source markets where state media coverage of maritime disputes shapes consumer perceptions before any destination marketing reaches the traveler.
The COVID shock was the sharpest demand collapse in the history of commercial aviation. UN Tourism recorded a 74 percent fall in international tourist arrivals in 2020. Recovery was slower than virtually every industry forecast predicted, and it was deeply uneven. Some markets had restored 2019 volumes by 2023. Others, including inbound China, remained materially below pre-pandemic levels into 2025.
I was working across multiple destination accounts during that period, and the experience generated a set of lessons that were widely acknowledged and unevenly absorbed. A few that I think deserve more attention than they received:
Flexibility is not a promotion. It is a trust mechanism.
Travelers who were offered genuine, frictionless cancellation during COVID developed lasting booking preferences. Those whose existing reservations were met with enforcement of cancellation penalties, even legally defensible ones, formed lasting impressions in the other direction. The commercial lesson was documented across every major airline and hotel group by 2022. What I observe is that many operators reverted to pre-pandemic cancellation structures once demand recovered. That reversion may look rational now and create real exposure in the next disruption.
Government coordination determines recovery speed, not recovery ambition.
The destinations that recovered fastest had pre-established communication structures between their tourism authorities and the government agencies controlling borders, health protocols, and visa policy. Singapore, UAE, and Thailand moved faster than markets where government and tourism operated at arm's length not because they were less affected, but because they had channels that allowed them to align and communicate quickly.
I have advised tourism authorities in several markets on exactly this coordination gap. The consistent pattern is that the relationship with the foreign ministry, the health ministry, and the civil aviation authority tends to be activated in crisis rather than maintained in advance. That activation lag costs weeks that matter in a demand recovery.
Source market diversification was stated as a lesson and then largely ignored.
Every post-COVID strategic review I read or contributed to included a recommendation to diversify source market portfolios. The logic was, and remains, sound: concentration in a single source market creates exposure that no amount of in-market excellence can mitigate when that market goes offline. What happened in practice is that as Chinese demand recovered, the destinations most dependent on it refocused on it. The diversification was deferred until conditions were again optimal for it, which is to say, until the pressure to do it had eased.
I am not critical of that as a commercial decision under the pressures of the recovery period. I am noting that the same dynamic is likely to repeat unless diversification investment is structured as an ongoing commitment rather than a crisis response.
What the Industry Can Actually Do
There is no planning model that neutralizes geopolitical risk. What planning can do is reduce the time between disruption and recovery, preserve trade partner relationships through uncertainty, and ensure that structural choices do not amplify single-point failures.
One dimension of post-crisis recovery that tends to be underweighted in destination strategy: recovery is not even across a competitive set. When regional disruption hits, traveler demand tends to consolidate around destinations that have spent years building institutional credibility, reliable infrastructure, and a reputation for predictability. Trust, accumulated slowly through consistent execution, becomes a competitive differentiator precisely when uncertainty is high and travelers are narrowing their choices. Airlines and conference organizers do the same. Destinations that have pre-built that trust do not just recover at their own previous pace: they often capture redirected demand from competitors that are slower to restore confidence. The implication is that the investment in market positioning, trade relationships, and consistent service quality during stable periods is not just promotional, it is a form of crisis insurance.
Beyond trust, the structural design of a destination's tourism model affects recovery speed. Tourism systems that are integrated across aviation, hospitality, events, and government tend to absorb shocks better than those where tourism is managed as a standalone export sector. When one segment slows, others can continue to support momentum. When the whole system needs to signal readiness to the market, it can do so through coordinated, credible action rather than fragmented messaging. Destinations that treat tourism integration seriously before a crisis find the recovery cycle meaningfully shorter. Specifically:
• Build disruption scenarios into demand forecasting on a standing basis. Not as an annual exercise but as a quarterly habit. Any destination with meaningful exposure to source markets in South Asia, Central Asia, or the Gulf should be running at minimum a baseline scenario, an airspace-disruption scenario, and a combined-stress scenario. The precise numbers matter less than the discipline of asking the question.
• Shift contracting structures toward shorter cycles and more flexibility where relationships allow it. The COVID period forced this; the recovery period reversed it. The geopolitical environment of 2025 and 2026 argues for a middle position.
• Invest in travel insurance penetration among Asian outbound segments as a demand stabilizer. Penetration remains below 40 percent in most markets and substantially lower in several. Insured travelers rebook faster after disruption. The commercial interest of destinations and operators in higher insurance coverage is direct, not incidental.
• Establish and maintain government-level tourism relationships before they are needed. The calls that accelerate an airport reopening, a visa waiver extension, or a bilateral connectivity restoration are made between people who already know each other.
• Treat source market diversification as an investment that is funded during strong periods, not as a hedge to be constructed after a market problem materializes.
The Asian Outbound Context Specifically
The key Asian outbound markets each carry distinct geopolitical exposure profiles. South Asian markets, India, Pakistan, and Bangladesh, sit directly under the Iran-corridor risk and contain large price-sensitive segments for whom fare increases convert quickly into booking cancellations. Gulf markets, including Oman, Qatar, and Kuwait, face proximity to the primary conflict zone and contain significant expatriate populations whose travel decisions are influenced by conditions in home countries that are themselves geopolitically exposed.
Central Asian markets, Kazakhstan and Uzbekistan in particular, face connectivity fragility: their primary routing options run through Moscow, Istanbul, or Dubai, each carrying its own geopolitical contingency. A simultaneous stress on two of those transit hubs would leave travelers with severely constrained options and no rapid alternative.
Southeast Asian markets face a different set of pressures. Thailand's outbound market is mature and concentrated in middle-income segments sensitive to price, but its inbound performance can also be damaged by regional conflict perception, as the Cambodia border situation demonstrated through its impact on island destinations far from any fighting. The Philippines operates in an unusual dual exposure: geopolitical disruption in Gulf destination states affects outbound volume from the Philippines directly, since a significant share of Philippine outbound travel originates with overseas workers in the Gulf. And escalating South China Sea tensions between China and the Philippines create a longer-term positioning risk that destination planners targeting Chinese travelers to the Philippines should already be tracking.
These are structural features of the source markets, not edge cases. Understanding them at this level of specificity is what separates destination strategy from destination promotion.
A Note on Honest Forecasting
One thing I have learned working across markets as different as Barbados, Saudi Arabia, the Mekong subregion, and Canada is that the instinct to present optimism to stakeholders is almost universal and almost always understandable. Budget cycles require confidence. Political principals want good news. Trade partners need reasons to invest.
None of that changes the underlying exposure. What it does is create a forecasting culture that treats disruption as a deviation from the plan rather than a feature of the operating environment. The COVID period was extreme, but it was not unique in kind, only in scale. Airspace closures, oil price shocks, bilateral political ruptures, currency crises: these happen with regularity across Asian outbound markets. The destinations and operators that perform best across those disruptions are not the ones with the best marketing. They are the ones that planned honestly.
Asian outbound travel is structurally resilient over long horizons. The motivations that drive it, family connection, aspiration, education, leisure, professional mobility, are not going away. The traveler who postpones because fares doubled or the route no longer operates will travel again. The question for any destination is whether they are positioned to capture that traveler when conditions allow, or whether they spent the disruption period without maintaining the relationship.
About the Author
Dr. Jens Thraenhart
Dr. Thraenhart is CEO of Chameleon Strategies (UN Tourism Affiliate Member), Founder of Saudi Outbound, Author of the Passion-Tourism Economy, and an Advisor to the Saudi Tourism Authority. His prior roles include CEO of Barbados Tourism Marketing Inc., Executive Director of the Mekong Tourism Coordinating Office, Executive Director of Marketing Strategy at Destination Canada, and Executive Director of Digital Strategy at Fairmont Hotels and Resorts. He co-founded Dragon Trail China, one of the earliest firms focused on digital marketing for Chinese outbound tourism.
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Estimates cited without a named publication represent industry approximations qualified as such in the text.
