How the war in Ukraine could harm the recovery of tourism

(CNN) — This year was supposed to be a year of recovery for the tourist travel industry, hit hard by the global coronavirus pandemic. But the war in Ukraine triggered by the Russian invasion may have changed the situation.

After two years of travel disruption due to ever-changing COVID-19 restrictions, airlines and tour operators are once again bracing for closed skies, cancellations and a cloud of uncertainty over international travel.

So far, more than 30 countries have closed their airspace to Russia, and Moscow has responded accordingly. Russia’s Civil Aviation Authority announced on Tuesday that it had closed its airspace to carriers from at least 37 countries. Airspace over Ukraine, Moldova and parts of Belarus also remains closed.

The impact of the war in Ukraine on tourism

In the short term, this means canceling flights or diverting air routes. But the long-term consequences for the travel industry could be far greater. Here’s why:

The Aeroflot check-in counter at Los Angeles International Airport on March 2. (Credit: Mario Tama/Getty Images)

Rising oil will raise travel prices

Global crude oil prices rose above $110 a barrel on Wednesday as investors fear Russian energy exports could be limited or halted due to the conflict in Ukraine.

These price increases will make any type of trip more expensive. Coupled with potentially longer air routes requiring more fuel as they negotiate closed Russian airspace, higher prices will eventually have to be passed on to the consumer.

Europe’s biggest airline, Lufthansa, said re-routing to Asia would cost “single-digit millions of euros” per month. Lufthansa chief financial officer Remco Steenbergen told reporters during the company’s earnings presentation on Thursday that it will have to raise ticket prices to offset rising fuel prices and other costs.

A rate hike could lead to lower demand, which is bad news for an industry already struggling to make up for pandemic-related losses, let alone inflation.

Security fears could affect tourism

The European Aviation Safety Agency (EASA) has warned of a “high risk” for civilian planes flying near the Ukrainian border. The airspace over Russia, Belarus, Poland, Slovakia, Hungary, Romania and Moldova is also on the risk list.

The increase in the cost of fuel will inflate passenger tickets. (Credit: STEFANI REYNOLDS/AFP via Getty Images)

EFSA on Friday doubled the size of the warning zone around Ukraine, fearing that “medium-range missiles could enter controlled airspace”. The agency added that “in particular, there is a risk of both intentionally targeting and misidentifying civilian aircraft.”

EFSA’s warning will not be taken lightly after Malaysia Airlines flight MH17 was shot down over eastern Ukraine in 2014, killing 298 people. Investigators said the missile that shot down the plane was fired from a launcher belonging to Russia’s 53rd anti-aircraft missile brigade.

For many travelers and crew members already spooked by coronavirus concerns, the thought of flying anywhere near a conflict zone may be too much.

“Destinations close to Russia are likely to suffer as consumers will fear the approach of war, although this is irrational as there is no declared threat from Russia,” Olivier Ponti told CNN. , vice president of Outlook, of travel analytics firm ForwardKeys.

“The US market will likely be deterred from visiting Eastern Europe and deterred, but not as much, from visiting Western Europe,” he added.

war ukraine tourism

Turkey is one of the destinations experiencing many cancellations from Russian travellers. (Credit: Chris McGrath/Getty Images)

Covid-19 continues to exist, despite the war in Ukraine

We continue to live in the midst of a global pandemic with country-specific travel restrictions and quarantines. Travel agencies had called on governments to lift Covid-19 travel restrictions as vaccinated companies hoped for a return to “normal”. However, the World Health Organization has warned that conditions on the ground in Ukraine and the ensuing refugee crisis will facilitate the spread of the novel coronavirus.

“Every time you disrupt society like this and set millions of people on the move, infectious diseases benefit,” said Dr Mike Ryan, director of the World Health Organization’s Health Emergencies Programme. health, during a briefing on Wednesday.

“People are huddled together, they’re stressed and they’re not eating, they’re not sleeping well. They’re very susceptible to shock, being infected themselves in the first place. And the disease is much more likely to spread.”

The United Nations High Commissioner for Refugees (UNHCR) reports that more than two million people have been forced to flee their homes and estimates that “up to four million people could leave the country in the coming weeks if the conflict continues “. The effects of a possible spread of the virus to neighboring countries could make governments less likely to ease Covid-19 restrictions, which would keep the travel industry under pressure.

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Loss of tourist revenue

According to the Association of Tour Operators of Russia (ATOR), Russians made more than 10.1 million tourist trips abroad in 2021. ATOR told the Russian state news agency that 46, 5% of the total tourist flow to the 32 open states went to Turkey, a country to which Russian tourists made 4.7 million trips last year.

And those tourism dollars seemed to be flowing well into 2022. Latest data from travel analytics firm ForwardKeys showed that Russian outbound flight bookings for March, April and May had recovered 32% from pre-Secondary levels. pandemic, before the invasion of Ukraine, and that Turkey, the United Arab Emirates, the Maldives and Thailand were the most booked destinations.

Everything changed with Russia’s war against its neighbour. The destinations that experienced the highest immediate cancellation rates during the period from February 24 to 26 are Cyprus (300%), Egypt (234%), Turkey (153%), the United Kingdom (153 %), Armenia (200%) and the Maldives (165%), according to company data. The absence of Russian tourists will deal a severe blow to these highly dependent tourist destinations.

It is important to note that not all countries have cut ties with Russia. For now, flights from the country continue to land in places like Turkey, Thailand and Egypt, but it is Russia’s economic prospects that have tour operators in those countries worried.

Western sanctions sent the Russian ruble to new lows as ratings agencies Fitch and Moody’s downgraded Russia’s sovereign debt to junk status on Thursday morning.

As Russians’ savings lose value, it will also become more difficult for them to use globally recognized credit cards abroad when they travel. Companies such as Visa and Mastercard said this week they were also working to enforce sanctions against Russia.

And, in another possible blow to the country, the World Tourism Organization will hold an emergency Executive Council meeting next week to decide whether to suspend Russia’s membership and participation in the organization.

nobody likes uncertainty

From investors to travelers, no one likes uncertainty. The war in Ukraine has increased uncertainty over whether port closures and shipping delays will limit deliveries of everything from wheat to crude oil to cooking oil.

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Travel stocks are also seeing their prices fall. International Consolidated Airlines Group, which owns British Airways, lost 5% in February. Lufthansa shares have fallen 14% since Russian forces entered Ukraine, and British airline EasyJet paints a similar picture.

Uncertainty about what will happen during the conflict is also making people think twice about planned or existing travel plans.

“We’ve had calls from customers who wanted to make sure their trip would go through and check out our flexible booking policy,” Matt Berna, Intrepid Travel’s general manager for North America, told CNN.

“Intrepid Travel is not currently operating any trips to Ukraine or Russia, but in the short term we expect a slowdown in travel sales to Europe,” he added.

Of course, the planned vacation doesn’t compare to the plight of the Ukrainian people and the immense humanitarian catastrophe unfolding along their borders, but the impact that the Russian invasion of Ukraine could have on a already fragile trip it is something that could be felt in the future.

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