Is global travel becoming more regional, expensive and sustainable?

We’re seeing disruption in aviation, rising costs, and shifting demand patterns. Is global travel starting to split in different directions—depending on where you are and how you travel?

Travel has always been driven by domestic and intra-regional travel so there is nothing new, but current factors – climate change, war in the Middle East, fuel supplies, disposable income, technology – are changing how, when and where people will travel.

Europe for example is the world’s largest region for inbound tourism demand, and the majority (65%) of arrivals are intra-regional according to the European Travel Commission. There’s record intent to travel by Europeans due to the likes of the Middle East conflict.

In times of uncertainty, travellers are more cautious and likely to stay closer to home whether that’s to neighbouring countries or staycations. An extreme form of this type of behaviour was exhibited during the pandemic and after reopening old favourites like France, Portugal, Greece, Spain and Turkey were among the first to recover along with the likes of the UAE although it now faces the challenges of conflict in the Middle East, right on its doorstep.

We’ve also seen the rise of dupe destinations, where alternative emerging destinations are popular because they offer a similar experience at a more affordable price. Examples include Girona rather than Barcelona or Balkans rather than Greece/Turkey.

IATA and other industry forecasts point to major fluctuations in travel flows in and out of key regions. When demand falls in one corridor, does it disappear—or simply re-route elsewhere?

Yes, we can see from the latest IATA data for March that Asia Pacific especially benefited from rerouting away from the Middle East. African, Asia Pacific and European carriers registered stronger international traffic growth as passenger flows were rerouted away from hub airports in the Middle East like Doha, Dubai and Abu Dhabi.

The Middle East saw a decline of 59% in March 2026 vs the previous year due to the conflict in the region and the subsequent closure of key hubs, such as Dubai, Abu Dhabi and Doha which have since reopened. However, travel warnings remain in place eg between the UK and Dubai which will soften recovery.

We’re seeing the trend towards last minute bookings which shows that consumers are holding off with their travel plans due to the uncertainty. Some demand will shift to safer destinations but often holidays are booked months in advance, which makes it difficult to shift wholesale from say the Middle East to Europe or Asia.

·       Global passenger growth 2.1% year on year (yoy) RPK – revenue passenger kilometres

·       Middle East -59% yoy

·       International -1% yoy

·       Domestic CN 14% yoy

Are travellers changing not just where they go, but how they travel—moving toward shorter, more predictable trips even if they are more expensive?

Price is a factor, and with fuel prices doubling since the war in the Middle East, and the threat of fuel surcharges as well as flight cancellations, consumers are increasingly cautions. This year points to the year of intra-regional travel where possible, as already there are big impacts of the fuel crisis in regions like Asia Pacific with fuel shortages. China is incentivising domestic staycations to help boost its economy which is slowing from 5% to 4% in GDP according to the International Monetary Fund.

We’re seeing Chinese travellers increasingly staying within Asia, while European demand is also tilting more domestic. Is this the beginning of a more regionalised global travel system?

The short-term outlook is highly uncertain with the US/Israel war in Iran so 2026 is expected to see an uptick in intra-regional and domestic tourism. We may also shift a substitution shift from air to rail travel, especially in countries like China with a world-class high-speed rail network.  

Japan was also popular with the Chinese with the weak yen; however, geopolitical tensions has led to a downturn with a sharp drop of 60% reported in January yoy, but only -5% down for total arrivals to Japan yoy. Lunar New Year fell in Feb/March which has helped to buoy the domestic figures for March 2026, according to IATA data.

What does that mean for destinations that rely heavily on long-haul visitors, particularly from China and other fast-growing outbound markets?

China will remain one of the most significant outbound source markets over the long term due to its strong macro-economic fundamentals and the rise of the middle class. Intra-regional Asia is forecast to benefit the most. Other fast growing outbound source markets include countries with large populations and rising disposable income such as India, Indonesia and Turkiye.  

At the same time, Chinese airlines have returned to profitability but remain highly price sensitive. Is there now a structural divergence in how different regions can absorb rising costs?

With aviation fuel accounting for one third of costs from a starting point, and that’s now doubled we’ve already seen what this means for airlines that were already struggling, as seen with the recent collapse of Spirit Airlines in the US. They won’t be the last to go under, so large airlines that are well hedged may be on the acquisition spree if they have deep pockets.  

Are we seeing a long-term reshaping of global tourism flows—not just a recovery cycle, but a redistribution of where growth happens?

There is a consolidation of existing pattens in the short term driven by the uncertainty in the market, and intra-regional will continue to drive growth but developments in long haul aircraft such as Qantas’ ultra long haul flight will open up new international routes like Sydney - London & New York next year with its next generation Airbus. 

There is increasing pressure on the industry to balance growth with sustainability. Is sustainability now a constraint on expansion—or a driver of innovation and new demand?

There can’t be a future of travel without sustainability, it’s a key driver of the long term viability of the industry, driver of innovation and we can see from recent Booking.com data that it has been embraced as a concern for 85% of travellers, especially Baby Boomers and Gen X who are walking the walk, unlike younger generations who are more experiential.

We often talk about sustainable tourism, but in practice most governments and destinations are still focused on growing visitor numbers. Are we at a tipping point where sustainability is becoming economically unavoidable rather than optional?

Yes, we are at a critical tipping point, where the industry has promised to reduce its emissions by half by 2030 and achieve net zero by 2050, although we are some way away from achieving this, as set out in the Glasgow Declaration on Sustainable Tourism.

There is also a misconception that sustainable travel is more expensive, but reducing operating costs such as water, waste and heating saves money for hotels and operators, whilst building truly authentic experiences elevates the enjoyment for visitors, leading to higher levels of visitor satisfaction.

Sustainability should never be seen as nice to have, it’s a critical factor for business success over the long term. Focusing on business as usual will only lead to playing catch up and losing competitive advantage to more forward-thinking destinations/businesses.

 Looking ahead, is global tourism heading toward a more fragmented, regional system—or can it still function as a genuinely global industry in the way it once did?

The future of the industry needs to be inclusive, and that means ensuring that destinations that rely on tourism continue to have capacity and connectivity, such as Pacific and the Caribbean. Where there is imbalance, ie where 1% of travellers cause the majority of carbon emissions, that is where we must redress the balance, and we are likely to see curbs on business travel, first class and business economy class which have a higher carbon footprint than economy.

It will be up to destination management organisations (DMOs) to ensure that they have the right balance of demand between long haul, domestic and intra-regional, without excluding certain income brackets or generations.