Only three months ago, Dubai Duty Free (DDF), the world’s largest single airport travel retailer, announced record 2025 sales of $2.378bn. It was truly a spectacular year-on-year performance that outshone passenger traffic growth at Dubai Airport (DXB) by 5%. With sales of over $290m, liquor played a huge part in the UAE-based operator’s success story, accounting for more than 12% of its overall turnover.

After last month’s attacks by the US and Israel on Iran and widespread reprisal missile strikes across the Gulf, DDF’s fortunes have suffered a shocking reversal. Scheduled flights at DXB and the Gulf’s two other major hubs, Qatar’s Hamad International and Abu Dhabi, have ground to a virtual halt as the conflict has escalated, delivering a hammer blow to a major travel retail market valued at $7.25bn in 2025, according to Mordor Intelligence.

The damaging ripple effects of the war have spread much further than the Middle East, of course. Underpinned by the region’s big four carriers (Emirates, Qatar Airways, Etihad and Saudia), the Middle East has become a ‘super-connector’ between Europe, Asia and Africa, handling an astonishing 25% of all global long-haul transit traffic.

Since early March, panicked airlines have had to reroute flights through alternative transit hubs such as Istanbul, Cairo and even Helsinki. Yet the amount of displaced traffic has proved too large for these already congested airports to absorb, leading to flight cancellations and delays. Meanwhile, rerouted long-haul flight times have been massively extended due to the closure of airspace over the Gulf, sending air fares soaring to stratospheric levels.

Last month’s dramatic events have already had the most destructive impact on the wider travel retail business since the pandemic. Seasoned observers of the industry might look back to the last Gulf War of 2003 for an historical precedent, but that long-distant conflict was primarily a con ned, land and air-based conflict, which only had a modest impact on global duty free sales.

High-profile attacks

Over two decades later, the Middle East has become the world’s largest transit hub and a major tourist destination in its own right, with international visitor spend forecast to have reached a record $62.2bn last year. Iran is fully aware of this and has embarked on a highly effective campaign to destroy the carefully developed reputation of Gulf states as a stable, tourist and business friendly destinations. High profile attacks have included Dubai airport and the Burj al Arab hotel, arguably Dubai’s most famous landmark.

Social media clips of drones smashing into hotels and embassies are an anti-marketing nightmare for countries like Dubai, Qatar and more recently Saudi Arabia, which will take much longer to repair than a runway or hotel block. With their assortment of luxury goods, multi-million-dollar prize giveaways and sponsorship of high profile sporting events, the likes of DDF, Qatar Duty Free and Bahrain Duty Free have played an important part in the region’s appeal to wealthy expats and international tourists, but the immediate future for these key players looks distinctly bleak.

Away from the tragic events in the Middle East, the industry’s usual round of calendar events has continued to roll on, with the IAADFS Summit of the Americas taking place in its new venue of Orlando last month. The Americas remains a major travel retail drinks market, but it continues to move at different speeds, with the Northern American airport and border market remaining subdued.

The US recorded a 6% drop in international arrivals last year, a decline partly attributable to the aggressive trade and anti-immigration policies of the incoming Republican administration. There are fears that this year’s FIFA World Cup, which the US is jointly hosting with Canada and Mexico, might fail to attract the upswing in tourist traffic that this high-profile sporting event normally attracts.

North of the border, the widespread boycott of US-bound travel by Canadians has brought the Canadian border store business to the brink of extinction and steep sales declines of US vodka, bourbon and wine. Meaningful financial assistance from the federal government has still to materialise. The same issue has also impacted Canadian airport stores, but the broader international passenger mix has partly mitigated its effects.

In contrast, Latin America and the Caribbean enjoyed a much stronger year, with Brazil in particular enjoying a record 9 million international tourists in 2025. Yet the cruise sector is undoubtedly the region’s standout channel. Around 21.7 million US tourists are expected to take a cruise this year, a 4.5% increase on 2025.

Dedicated teams serving this growing business are becoming commonplace in many drink companies, with ever smaller brands targeting the sector. For instance, Pantalones Tequila hit the headlines in February by breaking the Guinness World Record for the most Margarita cocktails sold in an eight-hour period onboard the Regal Princess cruise ship.

Docked in Cozumel, Mexico, the ship sold an astonishing 3,410 ‘24k’ Margaritas – a signature Pantalones twist on the classic cocktail, comprising Pantalones Blanco Tequila, Cointreau, Grand Marnier, Margarita mix and served over ice in a salted-rim glass. In a volatile world where airport traffic can disappear virtually overnight, the cruise sector’s captive audience and record-breaking consumption rates increasingly prove it is no longer just a secondary channel, but a high-seas goldmine for global drinks brands.