KUALA LUMPUR, 25 March 2026: A recent survey has revealed that 48% of Southeast Asian travel businesses believe that the prospects for their businesses in Q2 2026 are worse than they had anticipated at the start of the year, due to the impact of the Iran War.
The report by the ASEAN Tourism Association (ASEANTA) and Pear Anderson showed that inbound operators in particular were pessimistic about future enquiries, with 74% of inbound travel businesses much gloomier about prospects than at the start of the year, compared with 50% of outbound travel businesses.
Singaporean travel businesses were the most pessimistic overall, with two-thirds (67%) expecting enquiries in Q2 2026 to be worse than what they expected at the start of the year, compared to 64% in Malaysia, 54% in Indonesia, 50% in the Philippines, and 43% in Thailand.
Almost three-quarters (72%) of outbound travel businesses reported at least some postponements and cancellations for trips to the Middle East, 70% to Europe, and 58% to other regions, demonstrating that the impact on travel was beyond connectivity.
As for a potential redirection of outbound travel flows, 64% of businesses believed Southeast Asia would benefit, followed by East Asia (47%) and Europe and Central Asia (24%). Thai travel businesses were the most confident that Europe would see growth in interest (56%), likely due to the higher number of direct flights to Europe already operating to Thailand, whilst the Philippines saw a greater chance of travel interest being redirected to domestic travel (30%).
For inbound travel businesses, 54% have received cancellations for May, with the number sharply decreasing for cancellations received in June (21%), and just 3% seeing cancellations from October and onwards, a sign that travellers are taking a wait-and-see approach. 62% of businesses reported that some trips were postponed or cancelled by Middle East travellers, with a higher share (67%) among travellers from Europe, signalling the significant role that Middle East transit hubs play in facilitating inbound travel to the ASEAN region.
Fuel price increases, leading to higher airfares, as well as fuel shortages in general, remain a concern for Southeast Asian travel businesses, who noted their impact on inbound operations in-destination and their potential knock-on impact on travellers’ purchasing power in the medium-term.
“The high percentage who believe that travel will be redirected to Southeast Asia confirms that we must work together as one ASEAN to support our tourism and travel ecosystem,” said ASEANTA President Eddy Soemawilaga. “Travel businesses commenting on the current situation were quick to point to the overall resilience of the Southeast Asian travel industry, and that they believed traveller demand would recover once the situation stabilises.”
“There is no denying that travel businesses, whether outbound or inbound, are suffering at the moment,” stated Hannah Pearson, director at Pear Anderson. “Whilst on the face of it the lack of transit flights to the Middle East is immediately impacting flows both in and out of the region, ASEAN has an opportunity to present itself as an alternative transit hub between Australia and Europe, potentially opening up more direct flight routes – and new opportunities.”
To read the full report, visit: https://www.pearanderson.com/insights/2026/03/the-impact-of-the-middle-east-conflict-on-the-southeast-asian-travel-industry/
About ASEANTA
The ASEAN Tourism Association (ASEANTA) was founded in 1971 as a non-profit organisation dedicated to the development and promotion of tourism within the ASEAN region. It was formed through collaboration between the private and public tourism sectors of several ASEAN countries.
About Pear Anderson
Pear Anderson is a boutique consultancy firm specialising in Southeast Asian tourism. It partners with organisations across the spectrum of tourism-related organisations to build a lasting foundation in these markets, providing sales representation, unique insights, research, and training. The global Muslim travel segment is a core specialisation, and Pear Anderson provides insight and access to it.
For more information, visit Pear Anderson.
(Source: ASEANTA)
