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  Dubai eyes tourism sector recovery

  29 June 2026

  

   

  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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  Chinese contractor wins Qiddiya Northwest transport hub

  29 June 2026

  

   

  Saudi gigaproject developer Qiddiya Investment Company (QIC) has awarded a contract to build a new transport hub in the entertainment city of Qiddiya on the outskirts of Riyadh.

  The contract was awarded to Beijing-headquartered China State Construction Engineering Corporation.

  The project is located within the resort core zone of the development.

  MEED understands that its scope covers the construction of a parking structure for up to 2,000 vehicles; a transport hub consisting of a passenger flow system, ticketing and transit-related activities; retail, food and beverage, and hospitality facilities; mechanical, electrical and plumbing systems; and soft and hard landscaping works.

  Earlier this year, MEED exclusively reported that QIC had tendered a contract to build a new transport hub.

  Local firm Ammico Contracting undertook the site enabling works.

  QIC is accelerating plans to develop additional assets at Qiddiya City.

  Last week, MEED reported that QIC had invited contractors to prequalify for a contract to build an indoor sports arena within its Qiddiya entertainment city project.

  The multipurpose arena is designed to International Olympic Committee standards.

  It will be located in District 18, in the Uptown South area of Qiddiya.

  Once completed, the indoor arena will be capable of hosting a wide range of sports, cultural and entertainment events.

  The arena will feature numerous sports courts for basketball, handball, futsal, volleyball, tennis, boxing and gymnastics.

  It will have a seating capacity of 18,000 spectators.

  QIC’s other major projects include an e-sports arena, the National Tennis Centre, Prince Mohammed Bin Salman Stadium, a motorsports track, a racecourse, the Dragon Ball and Six Flags theme parks, and Aquarabia.

  QIC opened the Six Flags theme park to the public in December last year.

  The park covers 320,000 square metres and features 28 rides and attractions, including 10 thrill rides and 18 aimed at families and young children.

  The Qiddiya project is a key part of Riyadh’s strategy to boost leisure tourism in the kingdom.

  

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  Yasir Iqbal
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  Saudi’s WTCO considers equity model for water schemes

  29 June 2026

  

   

  Saudi Arabia’s Water Transmission Company (WTCO) is understood to be considering changes to the delivery model for the flagship Jubail-Buraidah and Ras Mohaisen-Baha-Mecca independent water transmission system (IWTS) projects.

  According to a source familiar with the plans, WTCO is in ongoing discussions with potential partners to establish a special purpose vehicle (SPV) that would take equity stakes in the two projects.

  The proposed changes could push procurement for the project into 2027, the source said.

  The schemes will have a combined water capacity of almost 1.4 billion cubic metres a day (cm/d). The Jubail-Buraidah IWTS comprises an approximately 348-kilometre-long greenfield water transmission system with a capacity of 840,650 cm/d, delivering water from the Ashmasiah reservoirs to cities and towns in Al-Qassim province.

  The Ras Mohaisen-Baha-Mecca IWTS involves constructing an approximately 325km-long greenfield IWTS with a capacity of 542,000 cm/d, delivering water from Ras Mohaisen to the Adham and Aradhiyah regions.

  The Jubail-Buraidah project is large by WTCO standards. The company’s second phase of the Khobar-Hofuf system, completed in 2024, was 140km in length and had a capacity exceeding 530,000 cm/d. 

  Bidding for both schemes has been extended several times since tendered last September under the public-private partnership model.

  Most recently, the bid submission deadline was moved to 2 August for the Jubail-Buraidah IWTS and to 9 August for the Ras Mohaisen-Baha-Mecca IWTS.

  As previously reported, local firms Alkhorayef Water & Power Technologies, Mutlaq Damook Al-Ghowairi Contracting, Saudi Services for Electro Mechanic Works and Al-Rawaf Trading & Contracting, among other companies, were expected to submit bids for the main contract.

  Under the revised structure, the SPV would appoint the engineering, procurement and construction (EPC) contractor directly.

  WTCO was established in 2020 as part of Saudi Arabia’s water sector restructuring to develop and operate water transmission infrastructure on a more commercial basis, with a greater emphasis on private-sector participation and alternative financing models.

  There are also plans to tender a contract for phase two of the Ras Mohaisen water transmission system project. This includes laying water transmission pipelines 408km in length with a capacity of 400,000 cm/d. This project is estimated to cost about $600m.

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  Mark Dowdall
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  Saudi contractor wins $354m Alkhobar mall contract

  29 June 2026

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  Riyadh-based construction company Lynx Contracting has won a SR1.3bn ($354m) contract to build the Al-Khobar Downtown Mall and Boulevard project.

  The contract was awarded by local developer Arabian Centres Company (Cenomi Centres). The contract duration is three years from the construction start date.

  In a stock exchange filing on the Tadawul, Cenomi Centres said the scope includes “design, engineering, construction, supply, installation, testing, commissioning, obtaining all required regulatory approvals and all related works up to the final handover and full operation of the project”.

  The contract is the first major deal signed since the UAE’s Al-Futtaim Group acquired a 49.95% stake in Saudi Arabia’s Cenomi Retail in a deal worth about SR2.5bn ($667m) in July last year.

  Al-Futtaim said it acquired the shares at a price of SR44 ($11.73) each from Cenomi Retail’s existing shareholders. These include Fawaz Abdulaziz Alhokair, Abdul Majeed Abdulaziz Alhokair, Salman Abdulaziz Alhokair, Saudi FAS Holding Company and FAS Real Estate Company.

  Dubai-headquartered Al-Futtaim Group is one of the region’s most established private businesses, with operations spanning the automotive, financial services, real estate, retail and healthcare sectors.

  In the retail sector, the group operates brands including Zara, Massimo Dutti and Bershka in the region.

  ---

  > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

  

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  Yasir Iqbal
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  Iran extinguishes fire at Mahshahr petrochemicals complex

  29 June 2026

  Firefighting teams have extinguished a fire at the Mahshahr petrochemicals complex in Iran’s Khuzestan province, according to domestic news reports.

  The fire broke out at a facility operated by Karun Petrochemical Company on 26 June during an operation to remove debris following recent attacks on facilities in the area, the company said.

  Earlier this month, the facility was hit by Israeli strikes, forcing an evacuation.

  Karun Petrochemical Company produces a range of products.

  It has a nameplate capacity to produce 40,000 tonnes a year (t/y) of toluene diisocyanate (TDI) and 40,000 t/y of methylene diphenyl diisocyanate (MDI).

  It also has the capacity to produce 30,000 t/y of aniline and 92,300 t/y of nitric acid (HNO3).

  TDI and MDI are both used primarily as building blocks to create polyurethane products.

  TDI is mostly used to make flexible polyurethane foams, and MDI is usually used to create rigid foams, adhesives, sealants and elastomers.

  Aniline is also used to make urethane polymers and in the dye industry, where it is a precursor to indigo, which is used to dye jeans blue.

  Nitric acid is a highly corrosive mineral acid, and its main industrial use is the production of fertilisers.

  The Mahshahr petrochemicals complex is one of the most important petrochemical complexes in Iran. It was also previously hit by Israel in strikes in April.

  On 4 April, Israeli forces targeted at least eight major petrochemical complexes in the Mahshahr region, along with critical supporting infrastructure, including power plants that supply electricity to the industrial zone.

  Mahshahr accounts for approximately 28% of Iran’s petrochemicals production.

  Iran’s petrochemicals industry is the country’s second-largest source of export revenue after crude oil.

  The country has a nominal production capacity of about 95 million t/y of petrochemicals, although actual output prior to the latest conflict was significantly lower due to persistent shortages of electricity and natural gas.

  Iran has invested tens of billions of dollars in developing its petrochemicals infrastructure, and if facilities are severely damaged, rebuilding would pose a major financial and technical challenge.

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  Wil Crisp