Hotels across the United Arab Emirates are forecasting weak occupancy levels for the fourth quarter of 2026, with industry leaders agreeing that full recovery will not occur during that year. Operators at the Arabian Travel Market in Dubai indicated that the leisure and business travel sectors will face continued softness through late 2026.
Recovery Timelines by Market
Victor Abou-Ghanem, CEO of Story Hospitality, which manages H Hotel Dubai and Al Maya Island & Resort in Abu Dhabi, stated a full recovery of travel volumes from Europe and the United States is expected during the second quarter of 2027. “A recovery in Q4 this year
is too soon,” he said.
Phillipa Harrison, CEO of the Ras Al Khaimah Tourism Development Authority, noted some neighboring markets should return by the first quarter of 2027, while markets such as Germany may not recover until the fourth quarter of 2027. Harrison added that the last 10 to 15 percent of demand recovery typically takes longer and that ongoing travel advisories hinder the pace of return.
Recovery Dynamics and Business Performance
The slower pace of recovery is linked to a gap between occupancy rates, which have improved faster, and average room rates, which lag behind. This divergence impedes the overall resurgence of the hotel
market.
Saurabh Tiwari, Vice President of the Indian Hotels Company Limited (IHCL), said the business will not return to the 2024-2025 performance benchmarks until the fourth quarter of 2027. Travel advisories affecting international visitor flows further delay the full recovery trajectory.
