Iran war causing 'enormous' tourism, freight disruption

travel
The Middle East conflict has meant fewer international travellers have been jetting into Australia. -AAP Image

Stranded travellers are helping keep Australia's hotels afloat amid massive cancellations driven by the war in the Middle East.

The conflict has driven up the cost of petrol and diesel at home, and jet fuel around the world, causing chaos for international travel and disrupting global supply chains.

The nation's accommodation sector had dealt with widespread and significant cancellations over the past fortnight as tourists from around the world - many who planned to travel to or through the Middle East - were forced to stay home, Accommodation Australia chief executive James Goodwin said.

"There's been enormous levels of disruption in the sector," he told AAP.

While Sydney, Melbourne and Brisbane were predominantly affected, other areas dependent on international travellers like Kangaroo Island, Uluru and the Great Barrier Reef were also being impacted.

But Mr Goodwin said occupancy rates had remained stable, because stranded travellers and aviation staff were forced to stay in Australia for longer than planned.

In one instance after the conflict broke out, a Melbourne hotel was asked to provide 130 rooms to accommodate air crew from a Middle Eastern carrier.

Tourism and Transport forum boss Margie Osmond said the industry was expecting Australian travellers to stay closer to home as high fuel prices and the soaring cost of air travel put a damper on exotic destinations.

"I think that the fuel issue for most of those holiday makers is likely to be one that relates to their own driving behaviours," she said.

"It's a consumer uncertainty issue at the moment, more than anything else."

But Ms Osmond said there would likely be an upside in the form of generous deals to entice Australians to continue travelling around the country.

While some travellers were still deciding how to respond, the nation's freight sector says it's facing significant pressure from skyrocketing fuel prices.

Australian Logistics Council chief executive Hermione Parsons said the ongoing price shocks had shaken the industry to its core and would leave a lasting impact.

Transport operators were negotiating with companies down the supply chain to pass the increased freight costs onto customers over the next few weeks.

"Diesel is the main energy source of transport in Australia," she said.

"The current instability is adding pressure upon pressure on an already pressured system."

Some freight companies are being forced to leave trucks sitting in yards, rather than moving goods, because of ongoing issues with fuel supply, one trucking industry source said.

Global backlogs and price hikes would likely be felt for years after the Middle East conflict ends, Dr Parsons warned.