Emaar sees Dubai hotel occupancy, now at 60%, recovering within a year

Emaar, a prominent Dubai real estate developer, reports that its hotels in the city are currently experiencing an occupancy rate of around 60%, according to the company's founder and chair, Mohamed Alabbar. This figure represents a significant recovery from the 20-25% occupancy rates seen during the Iran war. Alabbar expressed satisfaction with the recovery, stating that it demonstrates the hotels' ability to operate amidst disruptions caused by the conflict.

The downturn in Dubai's hospitality sector is attributed to the broader decline in international travel to the Middle East, North Africa, and South Asia, which is projected to fall by 14% this year, largely due to a 30% drop in Gulf countries. Alabbar noted that Dubai's hospitality sector had become accustomed to a growth rate of 9-10% annually, and thus, the current decline is quite drastic.

Despite the challenges, demand for hotel services is beginning to rebound, driven by increased international flights. While Gulf carriers have gradually increased their capacity, European carriers are expected to resume operations in the region only next month. Alabbar anticipates that hotel occupancy will gradually return to pre-war levels within the next 12 months, rather than immediately rebounding to the 80% seen prior to the war.

Emaar, known for constructing the world's tallest building, the Burj Khalifa, has played a pivotal role in establishing Dubai as a prominent business and tourism hub in the Gulf region. The company boasts a substantial revenue backlog of over $50 billion, and its collection rate remains as robust as it was in 2025. Alabbar expressed confidence in the market, acknowledging that while sales have improved, they are currently 50% lower than pre-war levels.

The developer expects an average 5% decrease in real estate prices in Dubai this year due to the Iran conflict. The UAE state news agency reported a 39% rise in the number of real estate projects completed in Dubai during the first half of 2026, with a total investment value exceeding 111 billion dirhams ($30.22 billion), marking a 52% increase compared to the same period last year.

In June, Emaar unveiled a nearly $55 billion urban district in Dubai, aimed at accommodating 150,000 residents. Alabbar stated that once the situation stabilizes with Iran and the US, the company plans to proceed with the development without delay.