ATM 2026: UAE hospitality adjusts to a new travel landscape nearly seven months into US-Iran war

Dubai: Nearly seven months into the US-Iran war, the UAE’s hospitality sector is no longer operating in crisis mode — but neither is it back to business as usual.

The common thread running through conversations with hotel operators, consultants, asset managers and travel platforms is that the appetite for the UAE has not disappeared. What has changed is how, when and where people are booking — and how hard hotels have to work to convert that interest into revenue.

International leisure and long-haul travel have taken the biggest blows, booking windows have shortened and price competition has gotten intense. Corporate and MICE demand has become more cautious in some segments, while luxury has been particularly exposed.

At the same time, domestic staycations, short-haul travel, selected international markets and a packed calendar of events have provided important lifelines.

That leaves the industry entering the next phase with a more complicated question: is this a recovery, or simply a series of temporary rebounds?

Paul Clifford, co-founder of strategy and communications firm Context Studio and a hospitality commentator, puts it bluntly: “While it’s not panic stations now or crisis mode, the damage is still being felt.”

“Where there have been small recoveries there has been something that has set the situation back again,” he said, warning that “until mass tourism returns, the progress won’t be a gamechanger”.

That said, hotels may have guests in rooms again, but that does not necessarily mean profitability has returned to pre-war levels.

“Those who are coming are on cheaper package deals or all-inclusive offers that also bring in a different kind of guest to hotels and the city, meaning overall spend is lower,” Clifford said. “It’s good to have people in hotels, but those who are there won’t be driving full recovery for the businesses.”

Booking has changed

For many hotel operators, the clearest evidence of the shock has not been an outright collapse in demand, but a change in customer behaviour. René Egle, general manager of JA The Resort, said the past six months had required the resort to become “more agile”.

“The underlying appetite for Dubai remains strong,” he said, but geopolitical developments created periods of hesitation, particularly in some international markets.

The more noticeable change, he said, was that guests were taking longer to commit and, in some cases, booking much closer to arrival, which has also made forecasting harder.

Saurabh Tiwari, vice-president, Operations – Middle East, Maldives and Sri Lanka at The Indian Hotels Company Limited (IHCL) - the operator of Taj group of hotels, also pointed to shortened booking windows across his UAE portfolio. “Guests who would traditionally book several weeks or months ahead are increasingly making decisions much closer to their travel dates,” he said.

“That has made forecasting more challenging, but it has also demonstrated how quickly demand can return once confidence improves.” Tiwari was recently promoted as VP operations for the region.

Krystel Irani, general manager at Al Zorah Beach Resort, also described the same pattern, saying guests had become more cautious, with international leisure travellers particularly likely to delay decisions until closer to their travel dates.