Dubai, once among the world’s busiest tourism hubs, is witnessing a steep downturn in visitor numbers and business activity following the ongoing US-Israel war with Iran, with the fallout rippling across its hospitality and travel sectors.
The emirate, which welcomed 19.59 million international visitors last year, had built a reputation as one of the most visited cities globally. However, the conflict that began on February 28 has severely disrupted this momentum. Restaurants that were once bustling with diners now report empty tables, reflecting a broader slowdown in footfall across the city.
Hospitality entrepreneurs say the impact has been immediate and severe. Natasha Sideris, founder of the Tashas Group, which operates 14 outlets in Dubai and employs over 1,000 people, said revenues at many of her restaurants have dropped by more than 50%. Tourist-dependent outlets have been hit even harder, with declines ranging between 70% and 80%. In a bid to retain staff, the company has implemented a 30% salary cut across the board rather than resorting to layoffs.
The crisis extends beyond individual businesses. Industry insiders report that footfall in some restaurant chains has plunged to just 15–20% of normal levels, forcing operators to shut outlets temporarily and place employees on unpaid leave. Similar distress is being reported across hotels, airlines, and travel agencies, all of which form the backbone of Dubai’s tourism-driven economy.
The downturn has been exacerbated by security concerns as the UAE has come under repeated missile and drone attacks amid the conflict. Authorities report that over 2,400 projectiles have been launched towards the country, targeting critical infrastructure and civilian areas, including hotels and residential complexes. While most were intercepted, debris has fallen in parts of Dubai, including near prominent locations such as Palm Jumeirah. So far, 11 fatalities and over 185 injuries have been reported across the UAE.
Air travel disruptions have further compounded the crisis. In the initial weeks, tens of thousands of tourists were stranded before being evacuated, while thousands of scheduled flights were cancelled. Dubai International Airport, the world’s busiest for international passengers, has seen operations significantly curtailed, although some flights have resumed on a reduced schedule.
Hotel occupancy rates have plummeted dramatically, dropping to just 15–20% of typical levels in the weeks following the outbreak of the war. In response, hotels have slashed prices, with some luxury properties offering discounts of up to 50% to attract local residents. Despite these efforts, some establishments have temporarily shut down sections or entire properties to cut operational costs.
The downturn has also affected Dubai’s status as a global business hub, with conferences and major events being cancelled or postponed. Hotel operators report record-low occupancy and a lack of forward bookings, with uncertainty discouraging travel planning.
The slump follows a period of rapid growth, during which Dubai rebounded strongly from the Covid-19 pandemic and expanded its tourism offerings. However, the current crisis has placed additional pressure on an already expanded hospitality sector, including hotels and short-term rentals. Data indicates that over 226,000 short-term bookings were cancelled in the first month of the conflict alone.
Migrant workers, who form a significant portion of the workforce in the hospitality sector, are among the hardest hit. Many have seen reduced working hours or have been placed on unpaid leave, raising concerns about job security and financial stability. Some employees fear a repeat of the economic hardships experienced during the pandemic.
The impact is not confined to the UAE. Regional tourism is also expected to suffer significantly, with estimates suggesting that between 23 million and 38 million fewer visitors could travel to the Middle East this year. This could translate into losses of up to $56 billion in visitor spending, depending on the duration of the conflict.
As uncertainty continues, Dubai’s tourism-dependent economy faces one of its toughest challenges in recent years, with recovery hinging largely on the resolution of the ongoing geopolitical crisis.
