Cheap flights, backpacker hostels and stunning beaches have helped make Southeast Asia one of the most resilient tourism regions in the world.
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Today, however, as the repercussions of the Iranian conflict spread across global energy markets, this picture is much less stable.
Between rising airfare and fuel prices and plummeting attendance in tourism-dependent economies like Thailand, Vietnam and Cambodia, the region is discovering how summer travel remains vulnerable to events taking place at thousands of kilometers.
The balance of the upcoming high summer tourist season is being called into question, with uncertainties surrounding a ceasefire continuing to cause flight cancellations and rising prices.
A region recovering under pressure
Tourism in Asia has not yet fully recovered from the Covid-19 pandemic, which particularly hit the region.
Just a few years later, Southeast Asia is bearing the brunt of the ongoing war’s impact on global energy supplies and prices.
Tourism is an economic lifeline for many developing countries. In Thailand, it represents almost 13% of gross domestic product, almost 9% in Vietnam, and it supports millions of jobs in Cambodia.
But recently, the Thai Ministry of Tourism and Sports reported that the number of visitors to Thailand fell 7% year-on-year in April, while arrivals from Europe fell by almost 16% and those from the Middle East collapsed by 57%.
In neighboring Cambodia, the tourism department indicates that, over the first four months of 2026, the number of international and domestic visitors registered in Siem Reap, very popular with tourists, decreased by 37.5% compared to the same period last year.
Travelers also bring essential foreign exchange to import-dependent economies like the Philippines and Nepal.
Experts say the conflict will determine which tourism businesses can survive long enough to profit when travelers one day return.
“Seeing two shocks of this magnitude five years apart, first the pandemic and then war, is terrible for the tourism industry,” Jitsai Santaputra of energy consultancy The Lantau Group told the Associated Press.
War in Iran increases travel costs
Jet fuel shortages and soaring costs have led Vietnam Airlines, Malaysia-based AirAsia Group, Hong Kong’s Cathay Pacific and other airlines to cut flights or reorganize their schedules.
European companies, which transport passengers to Asia often via the Middle East, are facing the same difficulties.
Closures of airspace over the Persian Gulf at the start of the war, as well as occasional closures of some airports, removed key stopover points for flights to Asia or forced commercial planes to take longer and more expensive routes.
At the same time, airfares have surged – and remain high – with airlines such as Air India and Cathay Pacific implementing sharp hikes in fuel surcharges, often doubling their previous levels.
This is causing real concern among travelers, Lavinia Lau, Cathay’s customer and commercial director, told the AP.
According to her, travelers are now booking much closer to their departure date than before, a sign of high uncertainty.
On the ground in South-East Asia, the rise in the cost of fuel in areas dependent on tourism is also weighing on taxi and VTC platform drivers, some of whom have recorded a marked drop in their profits since the start of the war.
The United Nations Development Program has warned that rising airfares and loss of confidence in travel can quickly impact household livelihoods and government revenues in economies where visitor arrivals are a major source of jobs, income and foreign exchange.
Travel is often the first expense people cut back when the economy takes a turn for the worse, says Le Tuyet Lan, who runs guesthouses in Hanoi and He Chi Minh City, Vietnam.
In times of crisis, high-end travelers turn to mid-range options, high-end customers opt for budget hotels, and the most economical end of the market becomes the most vulnerable.
“It will shake up the entire industry,†Le Tuyet Lan told the AP.
