Hotels in the United Arab Emirates anticipate weak occupancy levels for the fourth quarter of 2026, with no expectation of full recovery within the year, industry leaders at the Arabian Travel Market trade show in Dubai agreed. Travel volumes from key markets including Europe and the United States remain subdued, delaying the hospitality sector’s rebound.
Recovery Timelines by Market
A full recovery of travel volumes from Europe and the U.S. is projected for the second quarter of 2027. Neighboring markets are expected to see partial recovery by the first quarter of 2027, while some countries such as Germany may not reach prior travel levels
until the fourth quarter of 2027.
Industry Leaders Detail Recovery Outlook
Victor Abou-Ghanem, CEO of Story Hospitality, which operates properties including H Hotel Dubai and Al Maya Island & Resort in Abu Dhabi, stated that a recovery in Q4 2026 is premature. He said, “We expect a full recovery of travel volumes from Europe and the U.S. in the second quarter of 2027.”
Phillipa Harrison, CEO of the Ras Al Khaimah Tourism Development Authority, outlined a staggered recovery: “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.”
Saurabh Tiwari, Vice President of Indian Hotels Company Limited (IHCL), indicated business performance will not return to 2024-2025 levels before the fourth quarter of 2027.
Occupancy vs. Room Rate Recovery
Occupancy rates in UAE hotels are improving at a faster pace than room rates, impacting the overall recovery trajectory. This disparity is extending the timeline for full sector recovery as revenue growth lags behind occupancy improvements.
Ongoing geopolitical tensions and travel advisories related to regional conflicts continue to suppress travel demand, further delaying the rebound in hotel business from key international markets.
