UAE banks, hotels and airlines could gain first if Gulf tensions ease

Dubai: A US-Iran deal could give the UAE economy a fresh lift by easing pressure on trade routes and restoring travel confidence.

Investors, tourists, airlines, shipping companies and developers all moved into a more defensive mode during the conflict, especially when the Strait of Hormuz became a live risk for energy and cargo flows. A lasting de-escalation would help unwind that risk premium and allow companies to return to expansion planning.

The early signs of optimism are already visible in parts of the market. ADNOC Logistics & Services on Monday upgraded its full-year 2026 guidance, citing stronger performance in its Shipping segment and improved material handling volumes in offshore contracting.

The Abu Dhabi-listed company now expects net profit to grow in the high 60% range this year, compared with an earlier forecast of mid-to-high-teens growth. EBITDA is now expected to rise in the high 20% range, up from previous guidance for mid-to-high single-digit growth, while revenue is expected to post low single-digit growth instead of a low-to-mid single-digit decline.

According to industry experts, the most evident gains would come from sectors linked directly to movement. Shipping, ports, logistics and aviation are the first in line because they depend on stable routes, predictable insurance costs and open airspace.

Madhur Kakkar, Founder and CEO of Elevate Financial Services, said the UAE’s most exposed sectors are “primarily trade-flow industries such as shipping, ports, logistics, and aviation,” followed by banking, insurance, real estate and tourism.

That's because the UAE’s growth model is built around connectivity. Jebel Ali, Fujairah, Dubai International Airport, Al Maktoum International Airport, Etihad’s Abu Dhabi hub and the country’s logistics zones all gain when regional risk falls and trade moves with fewer disruptions.

The reopening and continued security of the Strait of Hormuz would be especially important. Even if cargo movement resumes quickly, shipping costs may take longer to normalise because war-risk insurance premiums rose sharply during the conflict.

Kakkar said elevated war-risk insurance premiums, which had jumped to between 5% and 10% of hull value, could take months to fully fade. That means the first stage of recovery may be confidence-led, while the full cost benefit for companies and consumers may come more gradually.

Hospitality, aviation and retail would be the next major beneficiaries because they are closely tied to confidence. Tourists delay trips when regional tensions rise, airlines carry higher operational risk, and residents tend to hold back on discretionary spending when uncertainty builds.

A steadier regional backdrop could reverse some of that behaviour. Higher passenger traffic would support airlines, better hotel occupancy would help hospitality operators, and stronger visitor numbers would feed into malls, restaurants and entertainment venues.

George Pavel, General Manager at Naga.com Middle East, said hospitality, aviation and retail could respond quickly to an improvement in the perception of stability, with tourism flows and consumer confidence likely to benefit.

The size of the rebound could be significant because the conflict created a steep fall in demand. Kakkar said Dubai hotel occupancy dropped from 86% to roughly 33% during the conflict, leaving room for a strong recovery if international travel sentiment improves.

Roxane El Mawla, Group CEO at UEXO.com, said easing tensions could bring stronger hotel occupancy, higher airline bookings, more business travel and increased events activity, while retail would gain from tourism inflows and better discretionary spending.

Financial markets usually recover before physical activity because capital can move faster than cargo, hotel bookings or property transactions. That is why banks, listed developers and local equities could be among the first to price in a lower-risk environment.

The return of foreign capital would support banks through stronger lending growth, trade finance demand and deal activity. Property developers would also benefit if overseas investors regain confidence and buyers who delayed decisions during the conflict return to the market.

Kakkar said banks and real estate are already seeing a shift in sentiment, with Emirates NBD and Emaar gaining during the relief rally. The moves suggest investors are treating de-escalation as a positive trigger for UAE assets, particularly those tied to credit growth, property sales and domestic demand.

Pavel said lower geopolitical uncertainty could accelerate foreign direct investment, family office allocations and institutional interest in local assets, while also supporting lending and corporate expansion plans.

The property recovery may take longer than the stock market reaction, but the direction would be positive if the deal holds. Investors usually need time to regain comfort after a regional shock, especially for long-duration assets such as homes, offices and development land.

The broader economic impact would run through the UAE’s non-oil economy, which now carries the main weight of growth. Lower regional risk supports trade, tourism, aviation, construction, finance, professional services and consumption, even if softer oil prices reduce some hydrocarbon revenue.

Kakkar said this is one reason the UAE is better placed than in previous cycles.

“What is reassuring for the UAE is that its economy is no longer a one-variable oil story. The non-oil sector has become the real backbone of growth,” he said.

Official UAE data showed non-oil activities contributed 77.3% of GDP in Q1 2025, while Reuters reported that UAE real GDP grew 6.2% in 2025, with non-oil GDP rising even faster, according to Kakkar.

Diversification gives the UAE several channels to benefit from lower regional risk. Trade flows can improve through ports and free zones, tourism receipts can rise through hotels and airlines, and investment can return through banks, equities and real estate.

El Mawla said reduced geopolitical risk would lower the cost of doing business and strengthen the UAE’s role as a regional commercial and financial hub connecting the Middle East, Asia and global markets.

Analysts said the deal remains a framework and its impact will depend on whether the ceasefire and negotiation process holds.

“The key point is that this is still a framework, not yet a fully settled peace,” Kakkar said.

If the deal stays on track, the UAE could benefit through stronger investor confidence, better trade visibility, improved travel demand and a faster return to expansion planning. If talks stall or security risks return, insurance costs, shipping delays and investor caution could come back quickly.

The first gains are likely to show up in equities, banks and developers because sentiment moves quickly in liquid markets. Other gains would take longer, especially in tourism, logistics, real estate and insurance, where companies need time to normalise costs and restart projects.