UAE hotels are experiencing weak occupancy and financial performance in the fourth quarter of 2026, with industry leaders agreeing that a full recovery will not occur within this year.
Victor Abou-Ghanem, CEO of Story Hospitality, which manages properties including the H Hotel Dubai and Al Maya Island & Resort in Abu Dhabi, stated that a recovery in Q4 2026 is premature. “We expect a full recovery of travel volumes from Europe and the U.S. in the second quarter of 2027,” Abou-Ghanem said. Similarly, Phillipa Harrison, CEO of the Ras Al Khaimah Tourism Development Authority, confirmed that while some neighboring markets
are expected to rebound by Q1 2027, tougher markets such as Germany may not return to pre-disruption levels until Q4 2027. “That last 10 to 15% takes a little while to come back. And advisories don’t help either,” Harrison added.
Recovery milestones extend through 2027. Saurabh Tiwari, Vice President of the Indian Hotels Company Limited (IHCL), commented that business levels equivalent to those recorded in 2024 and 2025 are unlikely to be achieved before Q4 2027. Industry reports indicate occupancy rates have been improving more rapidly than average daily rates (ADR), resulting in a lag in full financial recovery for
UAE hotels.
The sector’s slowdown is influenced partly by international travel advisories and wider geopolitical factors, including the ongoing war, which contribute to hesitance in certain source markets. These conditions, combined with uneven rate recovery, are the primary reasons for postponing anticipated full business normalization until late 2027, according to hotel operators attending the Arabian Travel Market trade show in Dubai.
