UAE's hospitality sector shifts from crisis to recovery amid Iran war fallout

The UAE's hospitality industry is moving from crisis to recovery amid the aftermath of the Iran war, according to experts. Tourism revenue plummeted due to the conflict, but Dubai's tourism sector showed signs of recovery during the summer, even as the war persisted. Raymond Khoury, a Dubai-based management consultant, stated that the UAE is transitioning from resilience to recovery.

Victor Abou-Ghanem, CEO of Story Hospitality, noted that a shift in consumer behavior and attracting new markets have aided the region's hospitality sector in bouncing back from the impact of the conflict. While the sector is not yet matching previous year's numbers, it is optimistic about a strong recovery. The UAE's positioning as a top tourism destination, with attractions like Dubai and Abu Dhabi, is helping to attract visitors.

September typically brings a boom period for the UAE economy, with the start of the school year, high-profile conferences, and cooler temperatures drawing in millions of visitors. However, flight disruptions and traveller uncertainty remain significant challenges. Eti Bhasin, executive director at Majestic Hotels UAE, noted that the Iran war led to greater hesitation, softer bookings, and increased price sensitivity during the summer months.

Nonetheless, demand is expected to strengthen from September onwards, particularly during the final quarter, as Dubai enters its traditional winter season. Hospitality leaders cautioned against predicting a stronger year-on-year performance across the board, citing a decline in hotel performance in the first half of 2026, with revenue per available room falling 31% year-to-date.

Hotel occupancy in Dubai reached 66% in August, the highest since March 2025, indicating a positive outlook for the months ahead.