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Dubai's tourism sector hit hard by regional conflict
Dubai, once a bustling global tourism hub, has seen visitor numbers collapse since the outbreak of the US-Israel war with Iran, leaving restaurants, hotels, and travel businesses struggling to survive. The emirate, which welcomed 19.59 million international visitors last year, is now grappling with empty tables, canceled flights, and a sharp decline in hotel occupancy.
Restaurants and hotels bear the brunt
Natasha Sideris, founder of the Tashas hospitality group, has witnessed a dramatic drop in revenue across her 14 outlets in the UAE. While some locations popular with residents and expats have seen revenues fall by over 50%, tourist-dependent venues have suffered declines of up to 80%. To avoid layoffs, Sideris has cut salaries by 30% for all staff, including herself.
"The current situation is brutal. I had a choice-either fire 30% of my staff or cut salaries to save jobs. I chose the latter for now."
Natasha Sideris, founder of Tashas hospitality group
Sideris notes that outlets in community malls and residential areas have fared slightly better due to local patronage. However, the broader restaurant sector is in crisis. An unnamed executive at a major restaurant chain reported footfall dropping to just 15-20% of normal levels, forcing the company to place over half its staff on unpaid leave and temporarily close several outlets.
Tourism ecosystem under strain
The downturn extends beyond dining. Hotels, travel agencies, airlines, and transport providers are all feeling the impact. Dubai International Airport, the world's busiest for international passengers with 95.2 million travelers last year, has seen thousands of flights canceled since the conflict began on February 28. While some operations have resumed, Emirates and other carriers are operating reduced schedules.
Hotel occupancy in Dubai has plummeted to 15-20% of usual levels for this time of year, according to Mamoun Hmiden, chief business officer at travel booking firm Wego. In response, hotels have slashed prices, with some luxury properties on Palm Jumeirah offering discounts of up to 50%. Others have temporarily closed sections or entire properties, citing "scheduled renovations"-a tactic typically used during slower summer months.
A senior executive at an international hospitality group revealed that occupancy at some properties had fallen to single digits, prompting cost-cutting measures. Business hotels, which rely on conferences and events, are also suffering. Majestic Hotels, which operates around 450 rooms across three properties, reported record-low occupancy due to widespread cancellations.
"We are seeing cancellations beyond April. A lot of events have been canceled, making it difficult for travelers to plan ahead."
Varun Raj, cluster director of sales and marketing at Majestic Hotels
Migrant workers face uncertainty
The crisis is disproportionately affecting Dubai's migrant workforce, which forms the backbone of the hospitality industry. Many workers have seen their hours reduced or been placed on unpaid leave. A South Asian waiter at a high-end restaurant described the situation as reminiscent of the COVID-19 pandemic, with fears of job losses and potential repatriation.
Some five-star hotels have already begun layoffs. Rights groups warn that many migrant workers in the UAE are financially vulnerable, with some burdened by debt from recruitment fees. The broader Middle East could see between 23 million and 38 million fewer visitors this year, according to Tourism Economics, part of Oxford Economics, with potential losses of $34 billion to $56 billion in visitor spending.
Government support and uncertain recovery
This week, Dubai announced a $272.26 million support package for businesses, including tourism, over the next three to six months. Hotels will be allowed to delay sales-related fees and tourism dirham charges-a fee applied to guests staying in the city. Authorities are also preparing recovery plans, including promotional campaigns, once the conflict subsides.
"The war is out of our control, but we are preparing for when it ends."
Dubai official
Sideris is calling for rent relief from landlords to help businesses weather the crisis. She estimates that her group can sustain operations for another one to three months before facing tougher decisions, such as layoffs or outlet closures. A recovery is possible by October if the war ends soon, but a prolonged conflict could push the timeline into next year.
"We've got enough cash to see us through a month or two... maximum three, and then past that, what do we do? After that, we will have to take tougher calls. Hopefully not. And this insanity ends soon."
Natasha Sideris
