Profit alerts from travel and leisure firms have reached their highest level in nearly four years, as the ongoing Iran war has severely impacted bookings and driven costs higher, according to a new report from EY-Parthenon.
Travel and Leisure Sector Hit Hardest
Between April and June 2025, listed travel and leisure companies issued the highest number of earnings alerts on London's FTSE, with seven profit warnings – the most since the third quarter of 2022. The Iran war, which began on February 28, has taken a toll on multiple UK sectors, sending fuel and energy costs soaring and prompting consumers to cut back on spending.
Travel firms and airlines were among the first to feel the effects. easyJet, for instance, warned of a hit from lower bookings and skyrocketing jet fuel costs. Overall, the report found that 40% of the 80 UK profit warnings issued since the end of February have cited the conflict's impact.
Housebuilders Struggle Amid Rising Costs and Falling Demand
Housebuilders have also been severely affected, with six profit alerts in the second quarter and eight in the first half of 2025 – the highest number for that industry since the onset of the Covid-19 pandemic. Property builders are reeling from rising build costs, falling house prices, and lower demand, as interest rates remain elevated due to inflation pressures, largely exacerbated by the war.
According to EY-Parthenon, UK listed firms issued a total of 59 profit alerts in the second quarter, up from 55 in the previous three months. More than half (53%) of these cited policy change and geopolitical uncertainty as a major factor, marking the highest quarterly proportion in over 25 years of EY's analysis.
Cost Pressures and Consumer Confidence Weaken
Rising costs were flagged by more than a quarter (27%) of firms in their profit alerts, while contract or order cancellations or delays were mentioned by 25%, and weaker consumer confidence by 14%.
Jo Robinson, EY-Parthenon partner, commented: “The latest figures show that pressure and profit warnings are increasingly concentrated in sectors and businesses facing rising costs, cautious consumers and tighter credit conditions. Just as one source of pressure begins to ease, another emerges; a year ago, companies were grappling with disruption from tariffs and shifting trade policy, while the conflict in the Middle East has now triggered more than two fifths of recent warnings. Beyond geopolitical tensions, businesses face some policy uncertainty – both domestically and abroad – which is creating a source of volatility.”
