Cyprus is among the Mediterranean destinations taking a hit to holiday bookings as the US-Israeli war with Iran ripples through the travel industry, with British package holiday company On the Beach suspending its annual profit forecast and shares falling 10% on the news.
The company, which had guided for adjusted pretax profit of between £39 million and £43 million ($52–$58 million), said demand for holidays in Cyprus, Greece, Turkey and Egypt had dropped sharply since US and Israeli strikes on Iran late last month. Although On the Beach has limited direct exposure to the Middle East, the conflict’s impact on surrounding destinations has made its profit outlook untenable.
The picture on the ground in Cyprus mirrors that broader trend. According to Phileleftheros, cancellations have been recorded for both the spring and summer seasons, with the drop in summer bookings — already running below expectations — the greater concern. The island’s association with the conflict, compounded by the drone strike on RAF Akrotiri and the arrival of European frigates in the region, has unsettled travellers and raised doubts about Cyprus as a safe destination. President Christodoulides convened an emergency meeting with ministers and industry leaders, concluding with a plan for an overseas information campaign to restore Cyprus’s international image.
Global airlines have compounded the disruption by suspending flights to Middle Eastern countries including the UAE, Kuwait and Bahrain. British Airways has dropped all flights to and from Abu Dhabi until later this year. Most airlines serving Cyprus, however, are returning to normal schedules, and tour operators have so far held their chartered flight capacity to the island for the May–October season.
On the Beach CEO Shaun Morton said the company’s operational teams had been “working round the clock to support directly impacted customers in resort and to enable a return home as soon as possible.” The company did not provide further details.
On the Beach said it could not predict the shape of any demand recovery but noted that its asset-light online model kept fixed costs low, allowing it to continue trading profitably and generating cash despite the volatility. Analysts at Peel Hunt described the move as unsurprising and said they expected the company to be “back on track after the Iran disruption concludes.”
Cyprus Hotels Association president Thanos Michailides said the focus was on sustaining the sector’s growth and keeping tourist flow to the island on track, while STEK president Akis Vavlitis struck a defiant note. “The industry is ready to open completely normally, as it does every year,” he said. “We have been through enough crises like this one and it will be overcome.”
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