Shares in hotels and travel agents tumble on fresh UAE airspace closure
IHG and Carnival are among those experiencing falls
Shares in travel firms have taken another tumble this morning after the United Arab Emirates announced another temporary closure of its airspace following a drone attack. Travel firms and airlines are still reeling from the fallout of strikes across the Gulf, which have prompted a reassessment of flight paths and, in some cases, their closure entirely.Investors are continuing to assess the impact of a drawn-out conflict on travel firms. Shares in hotel firm IHG fell 0.5 per cent this morning, having dropped nearly 6 per cent since the start of the war.FTSE 250-listed PPHE Hotel Group and cruise company Carnival dropped 0.5 and 1.2 per cent, respectively.It came after the owner and chair of travel agent Hays Travel told the BBC that the firm had already taken a significant hit from the war. Fallout: Hays Travel bookings have dropped 9% as customers cancel their holidaysDame Irene Hays said bookings were down 9 per cent year-on-year - though this was an 'improved position' compared to the previous week, when news of the war was still emerging.‘At the moment we have a dampening of people booking and an increase in people either wanting to change their holiday or perhaps cancel,’ Hays added. She said disruption in Dubai, which handles approximately 200,000 passengers a day, was having a knock-on effect on those travelling to the Maldives, Mauritius and India.It comes five days after online travel company On The Beach warned of a ‘signficiant slowdown in demand’ for popular destinations, including Turkey, Greece, Cyprus and Egypt. Shares in the firm have plunged 18 per cent since the start of the war.Airline stocks have largely shrugged off the developments this morning, with Easyjet and British Airways owner IAG gaining 0.39 and 0.45 per cent, respectively. But both airlines have suffered huge falls since the start of the war – Easyjet is down over 20 cent - as fuel prices surge.Goldman Sachs has warned that the war will have a bigger impact on jet fuel and diesel than on crude oil, which is up 2.7 per cent to around $102 a barrel today.‘Prices have rallied much more for many refined products than for crude,’ analysts said, with the disruptions posing a risk of lower production of diesel, jet fuel and fuel oil.Susannah Streeter, chief investment strategist at Wealth Club said: ‘While many airlines have oil hedging in place, securing a chunk of their fuel at fixed prices, it’s not a failsafe solution, particularly if the war drags on much longer. 'Competition for other, safer destinations is also set to increase as holidaymakers rethink plans, which is likely to see ticket prices continue to rise.’Hays Travel said prices across Europe were ‘reasonable’ with increased demand for trips to Spain, Portugal and Italy, as well as for cruises.Dame Irene said that while customers were more ‘circumspect’ over travelling, she believed travel would return to normal levels.Lufthansa boss Carsten Spohr has warned that the dominance of Gulf airlines such as Emirates and Qatar Airways on Asian routes would be ‘diminished’ by the war.‘The major hubs of the Gulf carriers are located in a region that is now clearly exposed to new risks. What this means for the future of global air travel remains to be seen,’ he said.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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Shares in hotels and travel agents tumble on fresh UAE airspace closure
