Hilton doubles down on Middle East after Iran war dents revenue by 30%

Hilton plans to continue expanding aggressively in the Middle East despite a 30% drop in revenue due to the Iran war, according to Simon Vincent, the company's president for Europe, Middle East, and Africa. The hotel operator's revenue in the region fell to 2% below pre-pandemic levels in Q2 but recovered to 2% below in Q3. Vincent expects Hilton to return to pre-war revenue levels next year.

Despite the revenue dip, Hilton is maintaining its development push and plans to introduce new brands from its global portfolio of 28 to the Middle East, which currently represents about 3% of its total business. The UAE is Hilton's largest operating market in the region, with 36 trading hotels and 13 more in the pipeline. Saudi Arabia accounts for more than 50% of Hilton's Middle East pipeline, with over 85 hotels in the works.

The company is targeting a mix of luxury, full-service, mid-market, budget, lifestyle, and branded residence properties to capture shifting demand. Hilton chose to keep hotel teams in place during the Iran conflict, reducing working hours instead of cutting staff. The company is now focusing on rebuilding MICE demand, which is crucial for strengthening Dubai's appeal as a destination.

While leisure transient demand is expected to return first, the company is working with government and tourism authorities to rebuild business travel and events. Hilton is also expanding its use of artificial intelligence to support, not replace, staff in areas such as holiday research, booking, itinerary planning, and back-office operations.