Tourism sector faces slump following conflict escalation in Iran

Following the onset of U.S.-led military actions against Iran on February 28, the tourism industry in Cyprus has experienced a significant decline in bookings. On March 2, a drone strike on a British naval base in Cyprus exacerbated the situation, leading to a surge in cancellations. Data from AirDNA indicates that daily short-term rental cancellation rates in Cyprus spiked to 100% before stabilizing at approximately 45% by March 21. The Cyprus Hoteliers Association reports a 40% reduction in hotel bookings for March and April. Similar, albeit smaller, increases in cancellation rates were noted in Greece and Turkey. Airline carriers EasyJet and Jet2 have observed a shift in tourist demand toward western Mediterranean destinations like Spain. Furthermore, the Central Bank of Cyprus has revised its 2026 economic growth forecast downward to 2.7%. Industry stakeholders expressed concern that the trend could negatively impact the upcoming high season if conditions do not stabilize.