Hotels in the United Arab Emirates are forecasting a weak performance for the fourth quarter of 2026, with expectations that full recovery of travel volumes from key international markets will not occur until 2027. Industry leaders anticipate that the last stages of recovery, particularly concerning revenues, will extend beyond this year.
Recovery Timelines by Market
Victor Abou-Ghanem, CEO of Story Hospitality, which operates H Hotel Dubai and Al Maya Island & Resort Abu Dhabi, projects that full recovery of travel volumes from Europe and the United States will take until the second quarter of 2027. He stated, “A recovery in Q4 this year is
too soon.” Phillipa Harrison, CEO of Ras Al Khaimah Tourism Development Authority, added that some neighboring markets are expected to return by the first quarter of 2027. However, the German market and similar segments might not recover until the fourth quarter of 2027. According to Harrison, “That last 10 to 15% takes a little while to come back. And advisories don’t help either.”
Occupancy and Rate Recovery Impact
The pace of recovery is uneven, with hotel occupancy rates improving faster than average daily room rates. This gap is a key factor delaying a full industry rebound. Saurabh Tiwari, Vice President of Indian Hotels Company Limited
(IHCL), noted that business activity in the hospitality sector is not expected to return to 2024-2025 levels until the fourth quarter of 2027.
Industry Consensus and Official Statements
At the Arabian Travel Market trade show in Dubai, hotel operators collectively agreed that a full recovery in 2026 is unlikely. The outlook reflects ongoing challenges linked to international travel volumes, with travel advisories also influencing the pace of return. Key stakeholders include Victor Abou-Ghanem of Story Hospitality, Phillipa Harrison of Ras Al Khaimah Tourism Development Authority, and Saurabh Tiwari of IHCL, all emphasizing delayed recovery benchmarks.
