The impact of the situation in the Middle East: “greater caution”

# tags: Events , Business Tourism , Middle East

Against an international backdrop marked by geopolitical tensions and uncertainty, the travel and events sector is closely monitoring developments in the Middle East.

For Portuguese DMCs, the impact has not yet resulted in a widespread decline in activity, but rather in a more cautious approach, more requests for clarification and some postponement of decisions. This is the view of Pedro Costa Ferreira, president of APAVT (Portuguese Association of Travel and Tourism Agencies), on the impact of the situation in the Middle East on Portuguese DMCs.

“In the MICE sector, rather than an immediate and uniform impact, what we are seeing is a rise in caution,” says Pedro Costa Ferreira, who points out that “geopolitical instability is casting doubt on air travel, transport costs and operational predictability – factors that are highly significant for those organising international events”.

For DMCs, this “translates above all into more planning work and client advice, revisions of proposals and a greater need for flexibility”. The president of APAVT notes that, “for the time being, we have no signs of a widespread decline in activity in Portugal, but there is, naturally, an atmosphere of greater caution”.

“A cautious approach and risk management”

The information currently available to APAVT does not indicate “a widespread trend of cancellations of events or incentive trips in Portugal due to this situation”; rather, there has been, above all, “some postponement of decisions and additional requests for clarification from companies”.

Pedro Costa Ferreira believes that, “in times of international instability, it is normal for organisations to seek to buy some time before confirming programmes or commitments”.

As for domestic incentive trips to other destinations, “the impact may be slightly more noticeable, particularly when we are talking about programmes involving regions closer to the area of tension or more exposed flight routes”.

According to the official, in some cases there are “postponements, rescheduling or even a change of destination”. “In incentive tourism, the perception of risk carries significant weight and, even when the destination is not directly involved in the conflict, companies tend to opt for solutions with less operational uncertainty,” he explains.

When asked whether companies are opting for alternative destinations for international events and meetings, Pedro Costa Ferreira notes that “there are some signs that companies are evaluating more alternatives, particularly to ensure flexibility should the international situation become more unstable”.

“Destinations perceived as safe, with good accessibility and experience in organising events, such as Portugal, can naturally benefit from this demand. Even so, it is too early to speak of a structural change; at this stage, we are primarily seeing an attitude of prudence and risk management on the part of companies,” he adds.

Impact on prices depends on the duration of the conflict

As far as prices are concerned, in the short term, volatility is the main effect of the conflict. “If there are prolonged disruptions to airspace or pressure on fuel costs, this could be reflected in airfares and the predictability of event budgets,” he points out.

However, in the medium term, “everything will depend on the duration of the conflict”, he argues. “If it is a temporary situation, the impact will tend to be limited. If it drags on, it could increase pressure on transport costs and reduce the ability to set prices well in advance, something that is particularly relevant to the events sector”, he concludes.