Dubai tourism reels from Iranian missiles

Middle East warAdd to myFTGet instant alerts for this topicManage your delivery channels hereRemove from myFTDubai tourism reels from Iranian missilesHotels in the UAE are placing staff on unpaid leave and shuttering buildings as occupancy levels plummet© Jon Gambrell/APDubai tourism reels from Iranian missiles on x (opens in a new window)Dubai tourism reels from Iranian missiles on facebook (opens in a new window)Dubai tourism reels from Iranian missiles on linkedin (opens in a new window)Dubai tourism reels from Iranian missiles on whatsapp (opens in a new window) Save Dubai tourism reels from Iranian missiles on x (opens in a new window)Dubai tourism reels from Iranian missiles on facebook (opens in a new window)Dubai tourism reels from Iranian missiles on linkedin (opens in a new window)Dubai tourism reels from Iranian missiles on whatsapp (opens in a new window) Save Simeon Kerr in Dubai and Elizabeth Bratton and Andrew England in LondonPublishedMarch 19 2026Jump to comments sectionPrint this pageUnlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The One&Only Royal Mirage, one of Dubai’s oldest high-end beachfront hotels, is renowned for its traditional Arabian architecture and verdant gardens. As the United Arab Emirates comes under heavy Iranian fire, the hotel’s peaceful surroundings are quieter than ever, punctuated only by the noise of nearby construction and the occasional missile overhead. It has closed one building to guests, staff said on Thursday, while another offers discounted stays to UAE residents. Hotels across the city are shutting down buildings or floors as occupancy at some outlets plummets to single digits. They are slashing staff costs, offering cut-price rooms and allowing some guests to use their room fees towards some free in-house food and drink.“The entire industry is basically preparing for the summer lull to come early,” said one industry executive. “Everyone is keeping a lid on staff costs and praying for a revival in the autumn.”The UAE, and Dubai in particular, has taken the brunt of Iran’s military response against its neighbours in the wake of US and Israeli strikes on the Islamic regime. More than 2,000 missiles and drones have rained down on Emirati military and civilian targets, causing disruption at the airport and hitting hotels such as the Fairmont The Palm and Address Creek Harbour.Dubai accommodation occupancy had dropped from a 90 per cent peak-season average to around 16 per cent by March 17, according to Lighthouse Intelligence, which tracks hotels and short-term rentals. Prices for April and May were down more than 11 per cent last week, compared with the week before the conflict started, it found. Empty restaurant tables at Dubai Creek Harbour reflect the fall in customer numbers © Fatima Shbair/APKerzner, the Royal Mirage’s operator, said the hotel routinely closes sections during periods of low occupancy, allowing the resort to “create efficiencies” and undertake maintenance.The resumption of civil aviation has helped repatriate the estimated 250,000 tourists and 25,000 transit passengers trapped in the UAE when the war broke out. The few passengers on inbound flights are largely expatriates who were caught outside.As the Eid holiday celebrating the end of the fasting month of Ramadan begins on Friday, hoteliers were hoping for increased demand for staycations and meals out for the majority of residents who remain in the UAE. Some hotels and the popular Barasti bar at the Mina Seyahi beachside complex, which had been closed after hostilities broke out, reopened ahead of the long weekend.Despite drone attacks on the airport, Dubai officials believe reviving passenger and cargo flights is vital to sustaining the economy through the conflict, allowing residents to travel as normal and visitors to return when they feel safe enough to do so.During the pandemic, Dubai locked down harder and opened its economy quicker than its peers, boosting its allure and driving the last five years of extraordinary economic growth, with real estate prices soaring by more than 60 per cent until last month.Now, many staff have been placed on unpaid leave or forced to take unused holidays early. Employees on holiday outside the country have been told not to return. Lay-offs are rare, with companies wanting to keep their workers’ visas active in the hope of a quick revival once the war is over. Companies still meet subsistence costs, such as accommodation and food.“The situation here is like the situation in the pandemic,” said David Sanchez of Migrante Middle East, which represents Filipinos working overseas, including some of the UAE’s 1mn Filipino workers. Migrant workers are already vulnerable because of a flexible labour market that allows employers to terminate contracts easily © Giuseppe Cacace/AFP/Getty ImagesAn African waiter at a city-centre Dubai hotel said staff had their hours cut in half because of struggling sales in their outlets, which are already quieter due to Ramadan. “If we get busy again, then we all go back to work — but it is a difficult time,” the waiter said.Dubai-based Sunset Hospitality group, which owns restaurants, bars and fitness facilities in the UAE, is looking at “temporarily scaling back” operations at certain venues, taking “short-term workforce measures” and creating “more flexible working arrangements”, chair and group CEO Antonio Gonzalez said. High-end restaurants and clubs, which have proliferated in recent years as richer expatriates moved to the UAE, are also facing cratering demand. Some chains are sending staff to Europe to work at sister establishments over the summer, said two investors.A man naps at an empty café near to the normally busy tourist area of Al Fahidi in Dubai © Fatima Shbair/APThe UAE’s flexible labour market, which enables employers to terminate and adjust employment contracts easily, allows companies to preserve cash and sustain operations through long periods of lower demand, as seen during the pandemic and the Dubai debt crunch of 2009.But migrant workers in the UAE are already economically vulnerable, rights groups say, often taking on debt to pay illegal recruitment fees — a phenomenon the UAE says it is trying to prevent.“Job losses, or being asked to take extended unpaid leave, will put them at financial risk,” said Joey Shea of Human Rights Watch.The industry’s chance of revival will depend on an end to the war — and the nature of relations with Iran in its aftermath. “If it ends with a ceasefire that doesn’t achieve closure and just kicks the can down for another confrontation, we’ll still get a bounce back, but it won’t exceed what it did before,” said a senior business consultant.More than 2,000 missile and drone attacks on the UAE have disrupted the airport and hit hotels such as the Fairmont The Palm © Altaf Qadri/APProperty investors concede it will take a while for ultra-rich western elites to return to the city. Instead, the industry might have to rely more on aspirational elites from Asia and Africa, the consultant said.One Dubai-based hotel investor also predicted any recovery would come from less wealthy travellers. “We used to depend on the tattooed German taxi driver,” they said. The investor added that the industry more broadly “might have to go back to the lower end of the market for a while. But we will rebuild from September.”Dubai officials are hoping the threat’s external nature will allow the industry to rebound faster than other destinations, such as Egypt and Tunisia, which have previously faced demand shocks after domestic terrorist incidents.“This crisis is caused by events from outside and when that is removed tourists will feel safe to return,” said one official. “People forget quickly.”Additional reporting by Stephanie StaceyReuse this content (opens in new window) CommentsJump to comments section Follow the topics in this article Middle East war Add to myFT Travel & leisure industry Add to myFT Coronavirus Add to myFT Iran Add to myFT Dubai Add to myFT CommentsComments have not been enabled for this article.