Hotels across the United Arab Emirates are forecasting weak performance in the fourth quarter of 2026, with no expectation of a full recovery before 2027. Industry leaders reported that occupancy and revenue levels will remain below pre-2026 benchmarks through the final months of this year.
Recovery Timeline Varied by Market
Victor Abou-Ghanem, CEO of Story Hospitality which manages H Hotel Dubai and Al Maya Island & Resort in Abu Dhabi, stated that the hospitality sector does not anticipate a full rebound of travel volumes from Europe and the United States until the second quarter of 2027. “We expect a full recovery of travel volumes from
Europe and the U.S. in the second quarter of 2027,” Abou-Ghanem said, emphasizing that a recovery in Q4 2026 is unrealistic.
Phillipa Harrison, CEO of the Ras Al Khaimah Tourism Development Authority, noted a staggered market return, with some neighboring regions expected to show recovery signs by the first quarter of 2027. However, key markets such as Germany may not regain previous travel levels until the fourth quarter of next year. “Some neighboring markets will be back by Q1,” Harrison said. “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.”
Full Business Recovery Projected by Late 2027
Saurabh Tiwari, Vice President of Indian Hotels Company Limited, a major player in the region’s hospitality industry, confirmed that hotel business activity will not return to 2024-2025 levels before the last quarter of 2027. This reflects the prolonged disruption impacting occupancy and revenue.
Occupancy and Rate Disparity Slows Recovery
The uneven pace between recovering hotel occupancy and lagging average room rates is delaying full financial recovery in the UAE hospitality sector. Travel advisories remain a significant barrier affecting the final 10 to 15% of demand recovery. Industry representatives pinpointed these advisories and wider geopolitical tensions as
key factors sustaining weakened travel volumes.
