Emaar sees Dubai hotel occupancy, now at 60%, recovering within a year

Dubai real estate developer Emaar's Dubai hotels are currently seeing an occupancy rate of around 60%, its founder and chair told Reuters on Monday, adding that the ‌company expects a return to pre-war levels in the next 12 months. "We were dealing with 83% occupancy. During the war, we crashed down to 20, 25. Now we're back to about 60% occupancy. We're very happy with (that). At least our hotels are operating," Mohamed Alabbar said in an interview.

The Iran war has led to heavy disruptions to ‌energy shipments, logistics and travel to and via the Gulf. International travel to the Middle East, North Africa and South Asia is expected to fall 14% this ‌year, according to consultancy Tourism Economics, dragged down by a more than 30% fall in Gulf countries, before rebounding in 2027.

"The truth is that in Dubai we've been spoiled," Alabbar said, adding that the city's hospitality sector had for some time become used to growth of 9-10% per year. "So this change is quite drastic." Demand was coming back, supported by more international flights, he added.

While Gulf carriers have gradually ramped ⁠up capacity, ​some European carriers are expected to return to ⁠the region only next month. The EU aviation safety agency had previously issued advisories to avoid Gulf airspace because of potential risks. "I believe that in the coming few months, we'll go back not to ⁠the 80%, but I think we'll crawl back to normality in the coming, say, 12 months," Alabbar added, referring to occupancy.

REAL ESTATE Emaar, developer of the world's tallest building, Dubai's Burj ​Khalifa, has played a central role in the emirate becoming the Gulf's business and tourism hub, including in the years following the pandemic when the ⁠property market boomed.

Alabbar said the company had a revenue backlog — which provides visibility for future revenue recognition — of more than $50 billion, and that its collection rate was currently "just as good as 2025". He said he was ⁠confident ​in the market, but that while sales had improved, they were below pre-war levels.

"I think right now it's hovering around 50% lower than normal," he said. Alabbar expects an average 5% fall in real estate prices in Dubai this year as a result of the Iran conflict.

The number of real estate projects completed ⁠in Dubai rose 39% during the first half of 2026, the UAE state news agency reported last month, citing Dubai Land Department data. The total investment value of these ⁠projects exceeded 111 billion dirhams ($30.22 billion), up ⁠52% from the same period a year earlier, it said.

In June, Emaar announced a nearly $55 billion urban district in Dubai that would house 150,000 residents, wagering the emirate's property market can absorb the shock of regional conflict. "Once the dust settles with Iran ‌and the US, I think ‌I'll roll it out straight away," Alabbar said.

($1 = 3.6726 UAE dirham)