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Dubai eyes tourism sector recovery

29 June 2026

 

> This package also includes: GCC presses ahead with tourism projects

Dubai’s tourism sector was in a position of strength when the regional conflict began on 28 February. 

Full-year figures published by the Dubai Department of Economy & Tourism (DET) in February confirmed that the emirate welcomed 19.59 million international overnight visitors in 2025, a 5% increase on the 18.72 million recorded in 2024, and a third consecutive year of record-setting arrivals. The city received more than 2 million visitors in a single calendar month when December 2025 closed with 2.04 million arrivals, 6% ahead of the same period in 2024.

Average hotel occupancy in Dubai’s 827 properties reached 80.7% in 2025, up from 78.2% in 2024. Revenue per available room rose 11% year-on-year to AED467 ($127), while the average daily rate increased 8% to AED579 ($158). 

By the end of December, the city’s hotel room inventory stood at 154,264, ahead of cities including Bangkok, New York, Paris and Singapore.

Western Europe remained the largest source market, contributing 4.1 million arrivals and accounting for 21% of total visitors, while the GCC and Middle East and North Africa regions together represented 26% , with 2.99 million and 2.17 million arrivals, respectively. South Asia, the CIS and Eastern Europe each contributed 2.89 million visitors.

The regional context was similarly buoyant. According to the World Travel & Tourism Council’s (WTTC) 2026 Economic Impact Research, Middle East travel and tourism GDP expanded 5.3% in 2025, outpacing the global sector average of 4.1%. 

The UAE’s travel and tourism sector reached $68.5bn in GDP contribution in 2025, with international visitor spending of $56.9bn. Pre-conflict, WTTC had forecast $207bn in international visitor spending across the Middle East for 2026.

Sudden shock

The outbreak of conflict on 28 February produced a swift and serious impact across the regional tourism ecosystem. Within days, the WTTC estimated losses of at least $600m a day in international visitor spending across the Middle East, as air travel was disrupted, traveller confidence weakened and regional connectivity fractured. 

The major Gulf aviation hubs including Dubai, Abu Dhabi, Doha and Bahrain, which together process about 526,000 passengers daily, experienced closures and operational disruption. On the day the conflict began, the EU Aviation Safety Agency issued a bulletin on the dangers of flying in the airspace of 11 countries, including the UAE, Saudi Arabia, Bahrain, Qatar, Oman and Kuwait. 

The data for the first quarter of 2026 reflects the scale of the disruption. According to UN Tourism’s latest World Tourism Barometer, international arrivals across the Middle East fell 14% in the first quarter of 2026, with hotel occupancy in the region declining sharply to 48% in March from 75% in January, against a global average of 64%. 

International air traffic among Middle Eastern carriers fell 61% in March, measured in revenue passenger-kilometres, according to the International Air Transport Association (Iata), dragging overall global international traffic into modest contraction for the month.

The conflict also introduced structural complications that extended beyond the immediate decline in arrivals. Several major source markets, including the UK, issued advisories against all but essential travel to the UAE. The UK’s Foreign, Commonwealth & Development Office (FCDO) guidance cited the risk of renewed strikes on civilian infrastructure, including ports, hotels, roads and airports, and advised residents to consider departing if their presence was not essential. 

The divergence from Dubai’s own official position, which characterised the emirate as stable and operationally normal, created a coverage gap that complicated conventional travel insurance provision and suppressed bookings from key markets.

On 18 June, the UK updated its position, removing the advisory against all but essential travel to the UAE and noting that commercial flight routes to depart the region remain available. The change marks a significant shift in the formal risk landscape for one of Dubai’s most important source markets, removing a barrier that had complicated both insurance provision and leisure booking decisions across the UK market for nearly four months.

Emirates and Etihad Airways both moved to address the insurance gap directly ahead of the FCDO change. On 17 June, Emirates launched a comprehensive travel cover product developed in partnership with insurance provider Travel Guard, offering medical cover for conflict-related incidents, trip cancellation cover, compensation for baggage delay or loss, and unlimited medical expense and emergency evacuation cover worldwide. The product is available across 27 markets.

Emirates also committed to rebooking disrupted customers at no additional cost where flights have been cancelled due to conflict-related disruption, including itineraries connecting on other carriers.

Arrivals data

Data from UK-based analytics firm GlobalData illustrates both the scale of the expected contraction and the strength of the projected recovery. UAE international arrivals, which reached approximately 30 million in 2025, are forecast to fall to about 26.4 million in 2026 – a decline of roughly 12% – before rebounding sharply to 32.1 million in 2027. 

GlobalData’s projections then show continued growth to about 33.5 million in 2028, 35.1 million in 2029 and 36.6 million by 2030. 

On that trajectory, arrivals would exceed pre-conflict levels within a single year of recovery and surpass 2025 figures by more than 7% in 2027 alone.

The GlobalData numbers place the 2026 contraction in a longer historical context. UAE arrivals grew almost uninterrupted from 8.4 million in 2009 to 25.6 million in 2019, before collapsing to 8.4 million in 2020 at the height of the Covid-19 pandemic. The subsequent recovery was among the fastest recorded for any major destination: arrivals reached 22 million in 2022, crossed 26.3 million in 2023 and climbed to 28.7 million in 2024 before the 2025 peak. 

That precedent – a two-thirds collapse followed by full recovery within three years – underpins the confidence embedded in GlobalData’s post-conflict forecast, which projects a return to growth momentum by 2027 and a trajectory that would deliver 36.6 million arrivals by 2030.

The near-term contraction nevertheless remains substantial. A decline from approximately 30 million to 26.4 million in a single year represents the sharpest drop in UAE arrivals outside the pandemic, and it comes at a point when the sector had been tracking well ahead of pre-pandemic levels.

Past experience

Historical precedent from comparable disruptions points to a consistent pattern: recovery shape is determined less by the severity of the initial decline than by the duration of the disrupting event and the speed at which the perception of the source market resets.

Single-event incidents with clear endpoints and no sustained security overhang have historically produced the fastest recoveries, with arrivals returning to trend within 12 months. Sustained conflicts or events that trigger prolonged travel advisory regimes produce more extended recovery arcs, with source market confidence rather than operational conditions defining the timeline. 

The Egypt Metrojet bombing in 2015 remains the most instructive cautionary example for the Gulf: Russian airspace restrictions imposed after the incident kept a major source market out of the Egyptian market for more than five years, with arrivals recovery lagging the resolution of the underlying security concern by a significant margin.

The UAE’s own Covid recovery offers a relevant local reference point. The GlobalData numbers show arrivals collapsed from 25.6 million in 2019 to 8.4 million in 2020, before recovering to 21.9 million in 2022 and surpassing pre-pandemic levels by 2023. The post-conflict recovery forecast of a bounce back to above 2025 levels by 2027 is less aggressive than the post-Covid rebound, reflecting both the more moderate scale of the 2026 contraction and the more complex advisory and perception dynamics involved in a conflict resolution scenario.

The DET’s response is structured around three priorities: operational continuity, sector support and market confidence. The government announced a AED2.5bn ($612.7m) support package targeting the tourism, hospitality and entertainment sectors, structured to protect business continuity, preserve employment and maintain visitor experience standards. Dubai is doing all it can, but much depends on how quickly perceptions shift.

Pilgrimages drive Saudi tourism

More than 1.7 million pilgrims performed Hajj in 2026, according to official data published by Saudi Arabia’s General Authority for Statistics, underscoring the continued centrality of religious tourism to the kingdom’s visitor economy.

The total of 1,707,301 pilgrims comprised 1,546,655 from outside the kingdom and 160,646 internal pilgrims, which includes Saudi citizens and residents. 

The vast majority of international pilgrims arrived by air, with 1,485,729 using this mode of transport. A further 54,429 arrived overland and 6,497 by sea. Pilgrims represented 165 nationalities, reflecting the global reach of the event.

The scale of the logistical operation accompanying Hajj is equally significant. Supporting the pilgrimage required 441,049 workers and 26,701 volunteers. Saudi Arabia’s pre-clearance programme, which processes travel documentation at the point of departure to streamline entry to the kingdom for participants from select countries, was used by 388,694 pilgrims.

Hajj is a structural pillar of Saudi religious tourism, which alongside Umrah, draws tens of millions of visitors to Mecca and Medina each year. The sector sits at the core of Vision 2030’s tourism diversification strategy, which targets 150 million visits a year by the end of the decade. 

Continued investment in transport infrastructure, including the expanded King Abdulaziz International airport and Haramain high-speed railway capacity, will help Riyadh achieve this target.

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Colin Foreman

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