Hotels in the United Arab Emirates are forecasting weak operational results during the fourth quarter of 2026, with hotel operators confirming that a full market recovery will not occur until 2027. Industry leaders gathered at the Arabian Travel Market trade show in Dubai agreed that occupancy and business levels will remain subdued throughout the remainder of 2026.
Industry Leaders Outline Recovery Timeline
Victor Abou-Ghanem, CEO of Story Hospitality, which manages the H Hotel Dubai and Al Maya Island & Resort in Abu Dhabi, stated that recovery in Q4 2026 is overly optimistic. He expects a full recovery of travel volumes from Europe and the United
States not before the second quarter of 2027. Phillipa Harrison, CEO of the Ras Al Khaimah Tourism Development Authority, supported this view, noting that international demand will not be fully restored in 2026.
Saurabh Tiwari, Vice President of the Indian Hotels Company Limited (IHCL), indicated businesses will not return to 2024-2025 performance levels until the fourth quarter of 2027.
Phased Regional Recovery Patterns
Recovery of travel demand to the UAE is expected to occur in phases by geographic market. Harrison noted that some neighboring Middle Eastern markets are likely to resume travel to the UAE by the first quarter of 2027. In contrast, larger
western markets such as Germany are projected to recover only by the last quarter of 2027.
Abou-Ghanem highlighted that the return of travelers from Europe and the United States is critical to the full revival of the UAE’s hotel sector and will not happen before Q2 2027.
Operational and External Factors
The UAE hotel sector is regaining occupancy faster than hotel room rates, impacting revenue recovery. Industry executives associate this with ongoing geopolitical tensions and the prevalence of travel advisories, both of which dampen demand and extend the timeline for reaching pre-2026 business levels.
Harrison remarked on the challenge posed by travel advisories, emphasizing
that they delay the return of the final 10 to 15 percent of market demand. This is a significant hurdle as the region seeks to regain full traction in its tourism and hospitality sectors.
