Dubai hotel occupancy set to plunge to 10% amid tourism slowdown
Hotel occupancy in Dubai is projected to collapse as the United Arab Emirates (UAE) grapples with the fallout of its regional miscalculations and its partnership with destabilising forces in the region.
According to Moody’s Analytics, hotel occupancy in Dubai is expected to plunge to just 10 percent in the second quarter of 2026, a dramatic fall from the roughly 80 percent levels reported in February.
Heightened tensions across West Asia, particularly in the Persian Gulf, due to US-Israeli military aggression on Iran, have contributed to a deterioration in regional security and growing uncertainty for tourism and business in the UAE.
Dubai’s premier tourist areas, from Palm Jumeirah and Dubai Marina to Jumeirah Beach Residence, are described as largely deserted, a stark reversal for a city that once marketed itself as a global playground built on foreign visitors and foreign capital.
As occupancy collapses, hotels are reassessing operations, with some preparing staff cuts amid worsening revenues.
Other tourism-linked sectors, including restaurants, retail, and airports, are suffering parallel declines. Even medical, business, and cultural tourism have contracted sharply.
Before the war on Iran, the UAE aggressively projected an image of security and stability, with Dubai International Airport marketed as one of the world’s busiest and safest aviation hubs.
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