Iran war hits summer travel
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The Iran war threatens to disrupt summer travel as it sends oil prices surging — and flight and hotel bookings are already dipping, industry experts warn.
The big picture: Rising oil prices and dwindling supplies are hitting travel as drivers face higher gas prices and airlines in the U.S. and elsewhere cut flights and raise ticket costs and baggage fees.
- While airfares have risen 20% from 2025, airlines remain confident that passengers will pay higher ticket prices. Customers have been willing to shell out for legroom, better seats and other extras.
- But Virginia Tech hospitality and tourism professor Mahmood Khan tells Axios that flight and hotel bookings have declined. "People are very hesitant to make long-term bookings," he tells Axios.
What we're watching: Khan says "the trickiest" period is still to come — the summer, when the U.S. is due to co-host the World Cup. Hotels in host cities this month cut prices due to weaker demand.
- Khan says gas prices will likely prompt people to think about cutting down on travel and that vacationers may "prefer domestic travel rather than going far away from home."
By the numbers: The average gas price has been above $4 a gallon for weeks and reached the highest level in four years this week.
- It spiked near $5 in parts of the Midwest on Wednesday amid the U.S.-Iran stalemate over the Strait of Hormuz.
Jet fuel prices have surged from $85 to $90 per barrel before the war began on Feb. 28 to over $200 a barrel and have remained volatile during the shaky U.S.-Iran ceasefire and stalling peace talks.
- The average international airfare soared from $776 days before the war began to $1,064 by mid-April, while the average domestic ticket jumped from $335 to $358, per an analysis from travel search engine Kayak.
- Aviation analytics firm Cirium shared data with Axios showing flight bookings to Europe for July that were made from Jan. 7 to April 21 were down 10.5% compared with the same period last year.
- They were down 12.5% from Europe to the U.S., as Europe faces jet-fuel shortages and cost concerns — problems Asia also faces.
State of play: The Strait of Hormuz typically accounts for 20% of global oil supplies, but Tehran has laid mines, effectively closing it to commercial ships, while the U.S. Navy has blockaded the strait.
- The head of the International Energy Agency warned Europe may run out of jet fuel within weeks.
- But Henry Harteveldt, an airline industry analyst with Atmosphere Research Group, told Axios that European executives — especially those with budget airlines — are more concerned about the price of fuel than supply.
Between the lines: The U.S. has plenty of oil, which helps insulate the country — but only to a degree. States receive and process oil somewhat differently.
- United Airlines CEO Scott Kirby told the Los Angeles Times last month that while pipelines connect the rest of the U.S., the West Coast is a "fuel island" where prices are "more susceptible to supply weakness" due to ships bringing in oil and refined products.
- West Coast states are more vulnerable because they rely more on foreign imports and the region has more travel activity due to the large population, Khan said.
- California Energy Commission data shows the state's jet-fuel stockpile has fallen more than 25% to a two-year low and that refining capacity continues falling.
The bottom line: "Expensive jet-fuel prices are here to stay until there is a lasting resolution to the war with Iran and we see Gulf oil production and deliveries start getting close to normal levels," Harteveldt said.
Amy Harder contributed reporting.
