Why the War in Iran Is Making Your Holiday More Complicated

Tui, Europe's biggest holiday company, saw its profits fall sharply by 43% to €153m (£131m) for the months of April to June 2026, down from €267m a year earlier. The war in Iran and the ongoing struggle with high living costs squeezed the company's earnings and changed how Europeans book their holidays The Guardian.

The company said the Iran conflict has cost it €60m (£51m) so far as of August 2026. The biggest part of that was €40m spent on bringing people home and income lost from two cruise ships that got stuck outside the Strait of Hormuz, a narrow strip of water between Iran and Oman that ships use to travel between the Persian Gulf and the open ocean. Tui's Mein Schiff 4 and Mein Schiff 5 were in the Gulf, docked in Dubai and Qatar respectively, when the fighting broke out at the end of February. Unable to pass through the strait, both ships stayed out of service for 12 weeks, with about 5,000 passengers on board affected The Guardian.

All Tui guests were brought home safely about two weeks after the war began, the company confirmed in early March TUI Group. In the weeks after the fighting started, Tui also saw fewer customers wanting to travel to Cyprus and Turkey, popular holiday spots whose closeness to the conflict area put people off The Guardian.

Customer numbers fell 3% compared to the same period a year earlier, to just under 10 million. Tui's division that runs its regional holidays and flights swung from a €50m profit to a €17m loss in the third quarter, hit by weaker demand for holidays, high fuel prices, and a competitive travel market The Guardian.

The change in how people book is striking. Tui said holidaymakers are increasingly waiting until the last minute to book their trips, driven by uncertainty from the Iran war and the cost-of-living crisis. This pattern first showed up in Tui's first-half results, published on 13 May 2026, which flagged a trend toward late demand for summer 2026 bookings TUI Group. The company had posted a smaller-than-expected second-quarter loss of €188m ($221m) for the quarter ended 31 March 2026, roughly 9% lower than a year earlier, while absorbing a €40m hit from the Iran conflict Reuters. Tui suspended its revenue guidance, meaning it stopped telling investors how much money it expected to make, at that time because of the Iran war.

Things have been looking up more recently, though. Tui confirmed its earnings outlook following third-quarter results published on 12 August 2026, stating that bookings had picked up in the past four weeks as the peak summer season got going TUI Group. Underlying earnings after nine months of the financial year stood at €297m, up from €273m the previous year. The improvement was driven by changes to the division that runs regional holidays and flights, even after absorbing about €40m from the Iran war, according to the company's April guidance update TUI Group.

CEO Sebastian Ebel pointed to extending the travel season as a way to deal with squeezed summer demand, noting that Tui now flies to Heraklion in Crete in November and is building holiday offers for November, December, February, and March The Guardian.

The broader context here is that a war in one part of the world can ripple through an industry that depends on people feeling confident enough to spend money on holidays and on fuel prices staying predictable. Tui owns its own hotels, cruise ships, and airlines, which has given it some protection. The company says this setup has helped it weather a difficult period. Yet the third-quarter numbers show the limits of that protection when two cruise ships are physically trapped by a blocked shipping lane and consumers hold off on spending amid inflation and war-related worry.

For anyone watching the industry, the big questions are whether the late-booking trend becomes a permanent habit or fades once the world feels more stable, and whether Tui's strategy of extending the travel season can make up for the weaker summer months. The company's earlier decision to stop telling investors how much revenue it expected, followed by its confirmation of the earnings outlook in August, suggests management believes the worst of the Iran-related damage is now measured, if not fully in the past. The €60m total war-related cost, disclosed with the third-quarter results, is a more precise figure than the €40m estimate from April, and it is the number investors will now use to judge the company for the rest of the financial year.