A revitalised conference season and overspill from the UAE’s first gaming resort can help restore Dubai’s tourism industry after the effects of the war as international governments lift travel advisories.
The full commercial effects, however, are unlikely to materialise until the last quarter of the year.
Hospitality was one of the UAE sectors most affected by the Iran conflict, which closed regional airspace at a usually busy time of year for visitors. With a peace deal in place, plans are under way to draw tourists back to the region this winter.
The UAE was removed from a list of countries where UK citizens are advised against travelling following the signing of the US-Iran peace agreement.
That is expected to boost tourist interest in holidays in the UAE, said Duncan O’Rourke, regional chief executive of Accor hotels.
“We're already in the recovery stage now,” he said. “Moving forward, we go through the summer and into next year very confident of coming back to the level of pre-conflict times.
"Dubai and Abu Dhabi have a wonderful reputation. It's a safe place; I didn't want to leave with my family. We went through this conflict safely and it's been extremely well-managed. I think the recovery will come relatively quickly now.”
JS Anand, chief executive and founder of Leva Hotels, said the timing is particularly significant, as “the UK remains one of the city’s most valuable source markets and a leading contributor to inbound tourism”.
Mr Anand added: “We expect the announcement to provide travellers with greater confidence to proceed with planned holidays, business trips and family visits that may have been postponed during recent periods of heightened tension.”
Timeframe for recovery
Travel advisories can often have a significant psychological impact, said Dr Jelena Janjusevic, global head of accountancy, economics and finance at Edinburgh Business School, Heriot-Watt University. “Their withdrawal, therefore, tends to support a gradual normalisation of intent among leisure and business travellers rather than an immediate surge in bookings,” she said.
Due to summer, the hotel sector is already entering a “seasonally softer period”, she said. “As a result, any uplift driven by improved advisories is more likely to be reflected in forward bookings, corporate travel planning and long-haul leisure segments.”
Victor Abou-Ghanem, chief executive of Story Hospitality, agreed. “This year, that seasonality may be more visible because international confidence is only beginning to recover. The important point is that the easing of advisories should help establish momentum now, even if the full benefit becomes clearer during the autumn and winter seasons.”
Enquiries and bookings are expected to strengthen as the revised travel guidance filters through to consumers, travel agents and corporate travel planners, added Mr Abou-Ghanem.
“International visitors surely will start increasing softly and we have already started to perceive a slight increase in the domestic and long-stay market in both Dubai and Abu Dhabi,” he said. “The initial improvement is likely to be concentrated in regional and short-haul markets, with longer-haul demand rebuilding more progressively.”
It could be next year before the numbers return to the same level as before the Iran conflict began, said Philip Barnes, chief executive of hotel operator Rotana Group.
“While current momentum is encouraging, we believe a full return to pre-crisis visitor volumes will take until 2027, before long-haul travellers, corporate and tour operators fully recommit to a destination,” said Mr Barnes.
Travel incentives
Airlines are offering incentives, and hotels are providing special offers to tourists with extra days and dining discounts.
Emirates airline is offering free comprehensive travel cover, which includes medical cover for conflict-related incidents.
It is backed by hotel accommodation and extended-stay support across a range of disruption scenarios, with Etihad Airways offering a similar travel cover programme.
Operators should not respond by competing only on price, said Mr Abou-Ghanem. “The stronger approach is to build demand through GCC and resident offers, family experiences, dining, wellness, events and longer-stay propositions. Hotels that diversify their guest mix and create reasons to visit beyond the room are better positioned to protect both occupancy and rate,” he said.
Dr Janjusevic said such tactical offers are likely to help cushion the slower season and encourage “incremental visitation”.
“It strengthens destination credibility, particularly in key source markets, and may encourage tour operators and airlines to re-optimise capacity into the autumn season,” she added.
“It also supports yield stability at a time when hotels typically rely more heavily on domestic tourism, staycations and promotional pricing strategies.”
Renewed confidence
“There is confidence coming back in,” Mr O’Rourke said. “I think you'll see the high-end luxury market will form the first part of the recovery segment. There will be a lot of people coming into Dubai on the midscale to premium side as well.”
Data from the Northbourne Advisory group showed more than 100 conferences and exhibitions have been cancelled or postponed in the UAE due to the war in Iran.
The opening of the $3.9 billion Wynn Al Marjan Island in Ras Al Khaimah, the UAE’s first gaming resort, is also expected to provide a boost. It is due to welcome guests in 2027.
The benefits are obvious to Ras Al Khaimah, but neighbouring emirates are also in line to enjoy interest from a new tourist market, Mr O’Rourke said.
The resort “is a game-changer for the region”, he said. “We have four hotels near there already, and we're looking to get some more into Ras Al Khaimah."
He predicted that the Wynn “will attract a new type of clientele, coming through not just for gaming, but entertainment too".
"It’s something that's always happening in this region in a positive way that will attract a new clientele and a new type of focus going forward.”
The Accor group manages a mixture of luxury and premium hotels in the UAE, including Raffles, Fairmont, Banyan Tree, Sofitel, Swissotel, Pullman, Movenpick and Rixos.
Like other hotel groups, a downturn in tourism encouraged Accor to close some venues for refurbishment before the next influx of guests.
Guest safety
“What the hotel industry does, and specifically our hotels, is provide a safe environment for guests,” said Mr O’Rourke. “We take that very seriously, so our guests and employees have always been well looked after. I'm very proud of that.”
Ultimately, the UAE's main strengths as a tourism destination have not changed, added Mr Abou-Ghanem. “It remains a highly connected destination with strong tourism infrastructure, a diverse hotel offering and a proven ability to respond quickly to disruption,” he said.
“As confidence returns and airline schedules stabilise, we expect regional travellers and shorter-lead leisure bookings to respond first, followed more gradually by long-haul and corporate demand.”
