The ongoing Iran conflict is dampening early summer tourism demand in Cyprus and Greece, triggering a surge in cancellations and slowing new bookings across the eastern Mediterranean.
In Cyprus, the impact has been immediate and severe. The conflict escalated just as the island’s tourism sector was emerging from the winter lull, with a wave of cancellations following Iranian counter-strikes and a drone strike on a British naval base on March 2.
Data from AirDNA shows daily cancellation rates for short-term rentals jumped from around 15% before the conflict to as high as 100% in the days that followed. Although the figure has since eased, it remained elevated at about 45% by March 21.
The Cyprus Hoteliers Association reported a nearly 40% drop in bookings for March, with a similar decline expected in April. Industry figures warn that prolonged disruption could threaten the crucial summer season.
“Since March 1 … we have had a lot of cancellations coming through,” said Nicholas Aristou, commercial director at Muskita Hotels in Limassol. “We have to protect the high season months… otherwise the destination will be in trouble.”
The economic fallout is already visible. Cyprus’s central bank has cut its 2026 growth forecast to 2.7% from 3.0%, assuming the conflict lasts around two months.
Greece sees slower pre-bookings
The effects are also being felt in Greece, where tourism is a key pillar of the economy. While less severe than in Cyprus, booking trends show signs of softening.
Aegean Airlines, the country’s largest carrier, reported a double-digit decline in summer bookings from Israel and Gulf states since the conflict began. Demand from northern Europe and the United States has also weakened, according to industry representatives.
George Vernicos, secretary general of Greece’s tourism confederation SETE, told Reuters, the sector is in a “wait-and-see phase,” noting that while pre-bookings have slowed, earlier momentum is helping to keep the overall outlook positive for now.
Demand shifts to western Mediterranean
Airlines including EasyJet and Jet2 say demand for Cyprus and Turkey has weakened, with travelers increasingly opting for destinations in the western Mediterranean, such as Spain.
The downturn highlights the broader economic ripple effects of the conflict, which has already disrupted oil flows, triggered flight cancellations and increased global uncertainty.
