Hotels in the UAE have lowered their expectations for the fourth quarter of 2026, anticipating a prolonged recovery period. Executives from Story Hospitality, Ras Al Khaimah Tourism Development Authority, and Indian Hotels Company Limited (IHCL) outlined delayed forecasts for returning travel volumes at the Arabian Travel Market trade show in Dubai.
Phased Market Recovery to 2027
Victor Abou-Ghanem, CEO of Story Hospitality, which operates H Hotel Dubai and Al Maya Island & Resort in Abu Dhabi, stated that full recovery of travel volumes from Europe and the United States is forecasted for the second quarter of 2027. Phillipa Harrison, CEO of the Ras Al Khaimah
Tourism Development Authority, added that some neighboring markets to the UAE could see recovery by the first quarter of 2027. However, she noted that the German market might not fully rebound until the fourth quarter of 2027. IHCL’s vice president, Saurabh Tiwari, projected that overall hotel business levels in the UAE will not return to 2024-2025 standards until late 2027.
Impediments to Full Recovery
The gap between faster occupancy recovery compared to room rate improvements is a significant factor delaying full recovery. Additional challenges include lingering travel advisories and geopolitical tensions, which affect traveler confidence. Harrison pointed out that the last 10 to 15
percent of demand recovery is slow to materialize, and travel advisories exacerbate the situation.
Executive Perspectives on Recovery Timeline
According to Abou-Ghanem, “A recovery in Q4 this year is too soon,” emphasizing the need for a longer timeline. Harrison remarked, “Some neighboring markets will be back by Q1. Other markets like Germany might not be back until Q4 next year. That last 10 to 15% takes a little while to come back. And advisories don’t help either.” Tiwari confirmed that business levels in UAE hotels are not expected to match 2024-2025 figures before the fourth quarter of 2027.
