UAE hotels predict underperformance for the fourth quarter of 2026 and a delayed full recovery of international travel volumes until 2027, according to industry executives at the Arabian Travel Market trade show in Dubai.
Recovery Expectations from Key Markets
Victor Abou-Ghanem, CEO of Story Hospitality, which operates the H Hotel Dubai and Al Maya Island & Resort in Abu Dhabi, said a full recovery of travel volumes from Europe and the United States is expected by the second quarter of 2027. He emphasized that recovery in the final quarter of 2026 is premature.
Phillipa Harrison, CEO of the Ras Al Khaimah Tourism Development Authority, noted
that some neighboring markets are likely to regain business by the first quarter of 2027. However, she highlighted that key market Germany may not recover until the fourth quarter of 2027, affected in part by travel advisories. Harrison stated, “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 that hotel business levels in the UAE would not return to 2024-2025 standards until the fourth quarter of 2027.
Factors Impacting Recovery Timeline
Hotel operators
are regaining occupancy faster than room rates, a disparity that is delaying the full industry recovery in the UAE. The gap between occupancy recovery and rate recovery means the sector cannot yet reach pre-2026 financial benchmarks.
Travel advisories and geopolitical tensions have affected the pace of returning international demand, particularly impacting the last 10 to 15 percent of bookings from certain global markets.
Industry Consensus at Arabian Travel Market
Stakeholders across the hospitality sector at the Arabian Travel Market event agreed that 2026 would not see a full rebound. Despite challenges, there is an industry-wide expectation that comprehensive recovery will solidify throughout 2027.
The consensus reflects
ongoing caution within the UAE’s hotel sector, driven by uneven market recoveries and difficulties in restoring previous business levels across key source markets.
