Geopolitical Risks in 2026: How Travel Agents Can Prepare Financially | Antravia Advisory

Geopolitical Risks in 2026: How Travel Agents can prepare financially

UK or European Travel Agent? See section below.

The world in 2026 did not arrive quietly. By the time most travel advisors were reviewing their forward bookings in January, geopolitical analysts were already flagging an unusually dense cluster of risks, spanning active military conflict, destabilized trade relationships, eroding alliances, and a US domestic political environment that is anything but predictable. For travel agents, this is not background noise. It is their operating environment, and it has direct financial consequences to their business and their clients

The Middle East Issue

Iran's ongoing campaign of missile and drone attacks has now stretched into its third week as of mid-March 2026, with the UAE, Kuwait, Bahrain, Qatar, and Saudi Arabia all reporting interceptions. Business Travel News Europe The most tangible point of impact for travel agents is Dubai International Airport, which handles close to a hundred million passengers a year and sits at the center of the most traveled long-haul corridor on the planet. Abu Dhabi, Doha etc are also an issue.

Iranian strikes have targeted the UAE's two main airports, with airports in Kuwait, Bahrain, and Iraq also coming under attack, leaving many tourists stranded and creating cascading disruption across carriers with Middle East connections. Black Car News In the first seven days of the conflict alone, cancellations across seven major regional airports exceeded 19,000 flights. Centre for Aviation British Airways extended a temporary reduction to its Middle East flight schedule, affecting flights from Abu Dhabi, Amman, Bahrain, Doha, Dubai, and Tel Aviv, while airlines broadly reassessed operations through the region's increasingly volatile airspace. ITIJ

This matters deeply to American travel agents booking clients to destinations that have nothing to do with the Middle East itself.

The Maldives Problem

Consider a scenario that is playing out right now for advisors across the country. A client books a luxury resort in the Maldives (or Africa, or Asia). The itinerary routes through Dubai on Emirates. The hotel, a high-end property with strict no-refund policies after final payment, has no obligation to cancel or offer a credit. The booking terms are clear. The client paid in full.

Then Iran fires another salvo. Dubai airport closes for two hours. Emirates suspends inbound foreign carrier connections. The client's flights are cancelled.

The hotel still holds the payment.

This is not a hypothetical and this is happening to our clients. Emirates is operating a reduced flight schedule that includes transit stops, while foreign carriers have faced restrictions on flying to the UAE due to safety concerns. Riskline The UAE's aviation regulator has confirmed that airspace could be shuttered with little to no notice as the security situation develops. Travel Market Report

For the travel agent, the financial exposure in this scenario is layered. The commission may already have been paid out by the supplier on a non-recoverable basis. The agent now owns the client relationship through what will be a difficult conversation about what the booking terms actually say. If the agent took a service fee, that fee is not refundable either, unless the agent's own terms say otherwise. And the hours spent managing the disruption, communicating with suppliers, exploring rerouting options, and handling a distressed client are uncompensated time.

Multiply that across a portfolio of clients traveling to Southeast Asia, East Africa, South Asia, and even Australia, all of whom may transit through Gulf hubs, and the scale of the risk becomes clear. Dubai, Abu Dhabi, and Doha are not just Gulf destinations. They are the connective tissue of global long-haul travel. When that tissue is under sustained attack, the disruption is structural, not isolated.

Ukraine, Europe, and the Long War

The Russia-Ukraine war is now entering its fourth year, with no real prospect of resolution despite European and American diplomatic efforts. Al Jazeera For travel agents with clients planning trips to Eastern and Central Europe, this creates ongoing demand volatility. A single headline about escalation near the Polish border, a new round of Russian hybrid operations in the Baltic states, or a missile strike reaching further west than expected can trigger a wave of cancellations for trips that are nowhere near an active conflict zone.

The most dangerous front in Europe this year is shifting from the trenches in Donetsk to a hybrid war between Russia and NATO, with both sides growing more risk-accepting and the margin for error narrowing. Client anxiety does not wait for events to affect the specific destination they have booked. Anxiety is not rational, and it does not match a policy map. When clients see breaking news about Europe, they call their travel agent.

The agent who has not built the cost of managing that anxiety into their pricing is absorbing it as a loss.

US Tariffs and the Confidence Effect

US tariff policy has pushed trade uncertainty to unprecedented levels, with the Supreme Court due to rule on the legality and scope of executive tariff powers in 2026. Al Jazeera This matters to travel agents in two ways.

First, tariffs have a cost-of-living effect. When American households are absorbing higher prices on imported goods, discretionary spending comes under pressure. Luxury travel is not immune to that dynamic, and the mid-market segment is more exposed still. Clients who were planning to spend $12,000 on a Europe trip may quietly defer that to 2027 without ever calling to cancel. The agent sees it as a booking that never came in.

Second, US tariffs are straining diplomatic relationships with key travel destinations. Anti-American sentiment, while rarely translating into safety issues for travelers, does shape the experience of traveling as an American in ways that sophisticated clients pick up on. It is one more variable that adds friction to the booking conversation.

Elections Everywhere

November 2026 sees the complete renewal of the US House of Representatives, 35 Senate seats, and 36 governorships, with Brazil holding a presidential election in October, and Colombia and Peru also heading to the polls. Al Jazeera Election cycles depress corporate travel decision-making and create demand uncertainty in leisure travel to affected markets. Latin America in particular, which has been a growth market for American travel agents, is entering a period of political transition across multiple countries simultaneously.

This is not a reason to avoid selling Latin America. It is a reason to price the engagement appropriately and to know your cancellation and rebooking rights on every supplier contract in that market before the client asks.

What Financial Preparation looks like

Travel agents who treat geopolitical risk as purely a client communications problem are misclassifying it. It is a financial planning variable, and it belongs in the same conversation as cash flow, margin management, and business structure.

The first thing to audit is your booking terms. Every client engagement should include clear language on what happens when a disruption is not classified as a force majeure by the supplier but is nonetheless real enough that the client cannot travel. This is the Maldives scenario. The hotel says the trip is operational. The airline says the flight is cancelled. The client says they want their money back. Without documented terms that address this exact ambiguity, the agent is exposed.

The second thing to build is a supplier-by-supplier understanding of commission protection. Some suppliers claw back commissions on cancelled bookings even when the cancellation is initiated by the supplier itself. Others have force majeure carveouts that release commission liability. Knowing which is which before a disruption occurs, not after, is the difference between a financial event and an administrative inconvenience.

The third thing to address is cash reserves. Aviation consultants have noted that if airspace avoidance persists, airlines face structurally higher operating costs and profit margin pressure, especially on long-haul networks reliant on Middle East transit corridors. Centre for Aviation That structural pressure will eventually manifest in schedule changes, route suspensions, and fare increases. An agent whose working capital is thin has very little room to absorb a month where gross bookings drop sharply while fixed costs remain unchanged.

The target is at minimum two months of operating expenses held in liquid reserves. Most independent travel agents are nowhere near that. The ones who get there tend to do so through consistent fee-based income that does not disappear when bookings slow.

Travel agents and this Risk

There is a reason sophisticated clients are increasingly turning to human travel advisors rather than booking platforms. Online tools cannot pick up the phone and explain what a Dubai airspace closure means for a Maldives itinerary booked on Emirates. Algorithms do not follow up two days later with rerouting options through Colombo or a confirmed credit with the hotel. Platforms do not maintain relationships with resort GMs who might extend checkout as a goodwill gesture when a client is stranded.

The geopolitical complexity of 2026 is, bluntly, good for the value proposition of a knowledgeable travel agent. But it is only commercially good if the agent has structured their business to absorb the operational burden that complexity creates. That means appropriate service fees, documented terms, supplier contracts that have been read in full, and a financial foundation that does not collapse the moment a conflict zone disrupts a transit hub.

The combined stresses of military conflicts, a rapidly fragmenting global order, and trade disruption paint a difficult structural picture for the year ahead. CNBC None of that is changing before December. Travel agents who plan their finances around a stable world will be caught out. Those who price for disruption, hold adequate reserves, and know their contracts will be the ones clients call next year too.

Antravia works with travel agents and tour operators on the financial infrastructure that makes this possible, from fee structures and engagement terms to cash flow planning and supplier contract review. If you want to talk through where your business stands, we are here.

A Harder Position: UK and European Travel Agents

American travel agents operating under US law have significant contractual flexibility. They can write terms that limit their refund obligations, charge non-refundable service fees, and lean on supplier cancellation policies as the governing framework for what a client receives. UK and European agents do not have that flexibility in the same way, and in the current geopolitical environment, that distinction is costing people real money.

The UK Package Travel and Linked Travel Arrangements Regulations 2018, which carried forward the substance of the EU's Package Travel Directive into domestic law post-Brexit, are unambiguous on one point. Where unavoidable and extraordinary circumstances at or near the destination significantly affect the package, or the carriage of passengers to the destination, the traveler is entitled to a full refund. Not a credit. Not a rebooking fee waiver. A full cash refund, within fourteen days.

The EU Directive operates on the same principle across member states. French, German, Italian, and Spanish agents selling packages are bound by the same framework.

The word "package" is what matters here. Under both regimes, a package is formed when two or more travel services are sold together, or when they are sold separately but through a linked process that results in a combined contract. An agent who books flights and a hotel together, or who invoices a combined itinerary, is almost certainly selling a package and is subject to these obligations whether or not their terms and conditions say otherwise.

Now apply the Dubai scenario. The hotel will not cancel. It is operational. The destination, the Maldives (as an example), is not itself affected. But the flight is gone because the routing through Dubai is suspended. The traveler cannot reach the destination. Under the Directive and the 2018 Regulations, there is a strong argument that the inability to reach the destination due to transport disruption constitutes precisely the kind of unavoidable and extraordinary circumstance that triggers the refund right.

The agent is legally required to refund the client in full within fourteen days.

The hotel has not refunded the agent.

This is the liquidity trap that catches UK and European agents when geopolitical disruption runs long enough that it cannot be resolved with a quick reroute. The agent is sitting between a client with a statutory right and a supplier with a valid contractual position. The supplier is under no equivalent obligation to the agent that the agent is under to the client.

What UK and European Agents can do

The first line of defense is supplier contract review, and it needs to happen before a disruption, not during one. The key question for every supplier agreement is whether the contract contains a back-to-back force majeure clause that mirrors the agent's obligations to their clients. Many do not. Tour operator terms frequently contain broad no-refund positions that sit in direct conflict with the agent's regulatory obligations. Identifying that mismatch in advance allows the agent to negotiate, to price in the risk, or to make an informed decision about whether to sell that supplier's product at all.

The second consideration is travel insurance structuring. UK and European agents who are building itineraries through high-risk transit corridors should be actively recommending, and in some cases requiring, comprehensive travel insurance that covers trip interruption due to airspace closure and carrier-initiated cancellation. This does not remove the agent's own liability under the Regulations, but it significantly changes the client's financial outcome and reduces the pressure on the agent to absorb a loss that is ultimately the result of a geopolitical event beyond anyone's control.

The third, and least discussed, point is working capital. UK and European package agents are effectively carrying a contingent liability on every forward booking that goes through a vulnerable routing. That liability is not visible on a balance sheet, but it is real. An agent with 40 clients booked on Dubai-transit itineraries for the next six months is carrying a potential refund exposure of several hundred thousand pounds or euros. If that exposure crystallises and the agent does not have the liquidity to cover it, the business is in serious trouble, regardless of what eventually comes back from suppliers.

ATOL protection in the UK provides a consumer safety net, but it does not protect the agent's own financial position. ATOL bondholders and the Civil Aviation Authority are focused on ensuring consumers are not left stranded. They are not a backstop for agent cash flow.

The agents who come through this period in the strongest position will be the ones who have mapped their supplier terms, matched their client-facing obligations to their supplier rights, and maintained enough liquidity to manage a refund event without it becoming an existential one. That is not a compliance exercise. It is basic financial management, and it is the kind of work Antravia does with travel agents who want to run their businesses on solid ground.

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Content published by Antravia is provided for informational purposes only and reflects research, industry analysis, and our professional perspective. It does not constitute legal, tax, or accounting advice. Regulations vary by jurisdiction, and individual circumstances differ. Readers should seek advice from a qualified professional before making decisions that could affect their business.
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