Lebanon’s hopes for a long-awaited economic revival have been thrown into jeopardy as the fallout from the Israeli-Iranian confrontation sends shockwaves through its already fragile financial system, disrupting tourism, trade, and aviation just as the country was beginning to recover from years of compounded crises.

Lebanese officials and business owners had pinned their hopes on a strong 2025 summer tourism season, buoyed by the anticipated arrival of hundreds of thousands of expatriates as well as Gulf, Arab, and international tourists. Optimism grew following the lifting of travel restrictions by several Gulf countries.

But those hopes have crumbled in recent days as the outbreak of hostilities between Israel and Iran has already slashed the summer tourism season by more than half. What remains now depends on how long the confrontation lasts.

So far, an estimated $1 billion in expected tourism revenue, out of a projected $2 billion, has vanished. More than 70% of bookings for June and July have been canceled, and nearly all Arab tourists have scrapped their plans for the entire summer. Hopes now rest on salvaging August and September, provided the violence does not intensify further.

According to Annahar newspaper, preliminary figures indicate that over 60% of hotel reservations for June and July have either been canceled or are at serious risk. Major restaurants are considering shutting entire sections and reducing hours, while travel agencies report a wave of mass cancellations.

Jean Abboud, President of the Syndicate of Travel and Tourism Agencies, told Annahar that Beirut airport had been receiving around 13,000 arrivals daily before the war broke out.

“Now, that number has plummeted by more than 75%,” he said, noting that most airlines have suspended flights to Lebanon. While some bookings by expatriates for late July and August remain in place, “cancellations from Arab and foreign tourists are very high,” he added.

The conflict has also rattled the aviation and shipping sectors, with rising insurance premiums and risk surcharges threatening to further isolate Lebanon from the global economy.

According to regional insurance brokers, war risk premiums for flights to Beirut have surged by 35% to 50% within just 72 hours. The situation mirrors past crises such as the 2021 Gaza war and the 2020 Beirut port explosion, when insurers imposed additional fees of $300 to $500 per flight or shipment.

Each day of partial disruption at Beirut’s Rafik Hariri International Airport could cost Lebanon between $3 million and $5 million in direct and indirect losses, according to preliminary estimates based on historical data. These losses include revenue from passengers, cargo, and operational infrastructure.

Maritime trade faces similar risks. The Port of Beirut, Lebanon’s main gateway for imports, is now classified as a high-risk location, with shipping companies considering additional insurance fees of up to $400 per container. Any military incident in nearby international waters could halt shipping entirely.

“The threat isn’t just about immediate supply bottlenecks,” said economist Pierre Khoury. “It also means a surge in the prices of imported goods—especially food, medicine, and spare parts.”

With more than 80% of its needs met through imports, Lebanon would struggle to find quick alternatives, particularly if land routes through Syria prove unsafe or inadequate. The scenario could revive the economic paralysis witnessed during the 2020 crisis, this time under even more complex conditions.

Khoury said that major importers have already started reassessing their future orders, raising fears of a fresh inflationary wave in the coming weeks.

Lebanon’s commercial sector is also under growing pressure. Disruptions to supply chains and soaring freight and insurance costs are feeding directly into consumer prices.

Large traders are reevaluating their priorities, while smaller businesses struggle with wild price swings and tightening credit conditions.

“A large segment of small and medium enterprises could shut down within weeks if this crisis continues,” Khoury warned.

Meanwhile, domestic consumption is depleting inventories at an alarming rate as public anxiety grows. Fuel prices are also rising sharply, disrupting operations for businesses that rely on imported energy.

“Lebanon has now entered a stage of explosive uncertainty,” Khoury said, warning of rising demand for foreign currency and the risk of monetary instability. Although the central bank claims to hold $9 to $10 billion in foreign currency reserves, Khoury noted that the portion actually available for use is closer to $6 billion.