Velocity Ventures and Pear Anderson’s SAILOR 2H2026 report frames the second half of 2026 around a single dominant shock: the US-Israel-Iran Middle East conflict and the Strait of Hormuz closure, which more than doubled jet fuel prices, cut 5.2 million seats from Southeast Asian flight schedules (May–Oct), and pushed war-risk insurance premiums up 50–500%.
According to the report, Vietnam remains the region’s strongest performer, with arrivals holding at least 35% above 2019 levels and posting 23% and 17% year-over-year growth in April and May respectively, while the Philippines continues as the slowest recovering market, still 22-30% below pre-pandemic levels in the first half of 2026. The bigger story, though, is the Middle East conflict’s cascading impact. Jet fuel prices surged over 100% since the war began, and airlines cut 5.2 million seats from Southeast Asia’s flight schedules between May and October 2026, with Thailand and Malaysia each losing 1.1 million seats. Brent crude surpassed $100 a barrel in March and peaked at $126, and the WTTC pegged the conflict’s cost to global travel and tourism at roughly $600 million per day as of March.
The report highlights that governments are scrambling to offset the damage. Malaysia’s monthly fuel subsidy bill swelled from RM700 million to RM7 billion, while the Philippines declared a fuel emergency and Vietnam zeroed out several fuel-related taxes. Currency and inflation pressure followed: the Philippine Peso and Indonesian Rupiah both hit record lows against the dollar in June 2026, while Philippine inflation reached 7.2%. Yet there’s a silver lining for regional hubs — Singapore Airlines saw a 38% jump in transit traffic on Europe-Australia and Europe-Asia routes as carriers reroute around the Gulf’s repeated airspace closures, positioning Singapore, Kuala Lumpur and Bangkok as structural beneficiaries of the region’s lost hub dominance, even as low-cost carriers bear the brunt, exemplified by Spirit Airlines ceasing operations on 2 May 2026 after failing to secure a US government bailout.
On the innovation and investment side, AI adoption is accelerating fast but unevenly. The report shows that 80% of hotel chains are already using AI in some capacity, yet only 11% have deployed advanced AI agents capable of completing bookings and dynamic pricing in real time, which is a gap the report flags as prime territory for agentic booking startups that could let hoteliers bypass OTA commissions.
88% of Millennials and Gen Z travelers plan to maintain or increase their travel budgets in 2026, and APAC travelers are 50% more likely than those in Europe or the US to raise spending. Velocity Ventures highlights seven structural pain points, from OTA commission traps to fragmented payment systems where 74% of travellers abandon bookings without their preferred payment method as the areas ripest for founder-built solutions in the back half of the year.
The full report goes deeper on verticals, China market dynamics, and named startups to watch. Read the full report here.
