Key facts
- Ascott aims to capture increased demand for intra-Asian tourism due to flight disruptions caused by the Iran war.
- The Iran war has led to reduced capacity at major Middle Eastern aviation hubs and doubled jet fuel prices.
- Ascott has expansion plans in Japan and sees it as important to its Asia-Pacific network.
- Southeast Asian tourism faces a potential dip due to fewer direct flights and higher airfares.
- Major Gulf carriers like Emirates and Qatar Airways have significantly cut flights.
Singaporean serviced residence operator Ascott is positioning itself to benefit from a shift towards intra-Asian tourism, driven by increased air travel costs and disruptions stemming from the Iran war. The conflict has led to the closure or reduction of capacity at major Middle Eastern aviation hubs like Dubai, Abu Dhabi, and Doha, significantly impacting global flight paths and increasing jet fuel prices.
Ascott's chief executive, Kevin Goh, stated that Japan is a key component of its Asia-Pacific network and that the company aims to capture the growing demand for regional travel. The higher cost of air travel and the rerouting of flights are discouraging long-haul journeys, prompting Asian travelers to explore destinations closer to home.
The disruption to air travel has had a broad impact on the tourism industry. Major Gulf carriers, including Emirates, Qatar Airways, and Etihad, have canceled thousands of flights. This affects other airlines, such as Malaysia Airlines, which relies on codeshares with Qatar Airways for transit traffic. The price of jet fuel has doubled since the conflict began, leading airlines to impose fuel surcharges, which are being passed on to consumers. Lightfoot Travel, a luxury travel firm, reported a 50% drop in bookings and is shifting its focus to Asia-to-Asia regional travel.
Southeast Asian countries heavily dependent on tourism, like Thailand and Cambodia, are particularly vulnerable. Travel experts note a lack of direct flights between Europe and destinations in Southeast Asia, and a significant portion of annual Europe-Asia travel typically flows through Middle Eastern airports. This situation could lead to substantial losses for these economies, with projections of millions of lost visitors and billions in revenue for Thailand if the conflict persists.
Beyond passenger travel, the conflict has also disrupted supply chains for aircraft maintenance, repair, and operations (MRO), leading to delays and increased costs for spare parts. While some Asian carriers with existing non-stop routes between Asia and Europe may see a slight advantage, the overall impact on the global aviation and tourism sectors is overwhelmingly negative.