Dubai has spent decades positioning itself as a major air transit hub and luxury travel destination. Neighboring Abu Dhabi, Qatar and Saudi Arabia have invested heavily to replicate that model across the Gulf region.
But now, the escalating war in Iran threatens to upend the tourism playbook in the Middle East.
"The longer this goes on, the bigger the impact is going to be," said Dave Goodger, managing director for Europe, the Middle East and Africa at Tourism Economics, adding that "the perception of safety and security, which has been the bedrock of travel to the region," is now at risk of eroding.
After Israel and the U.S. began bombing Iran on Feb. 28, triggering airspace closures in the Gulf region and stranding thousands of travelers, Iran retaliated not just against Israel and U.S. military bases in the region but also targets in the United Arab Emirates, a U.S. ally. The UAE said it intercepted a wave of missiles and drones and that debris fell on Dubai and Abu Dhabi.
Two of Dubai's luxury hotels sustained damage. The city's iconic, sail-shaped Jumeirah Burj Al Arab reported a minor fire on its facade, while Fairmont The Palm, located on Dubai's Palm Jumeirah island, also reported damage.
According to Hala Matar Choufany, president for the Middle East, Africa and South Asia at global hospitality consulting firmHVS, the timing of these incidents is particularly impactful. March and April are high-demand months for the region, with a mix of "high-yield leisure demand and strong corporate activity," said Choufany.
"If uncertainty dampens travel sentiment during this window, the impact is disproportionately large," she said. "Lost peak-season room nights are difficult to fully recover later in the year."
Prior to the conflict, the region's full-year tourism outlook had been strong. Goodger said that the Gulf Cooperation Council countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE) had been on track to grow arrivals by 8% in 2026, building on a strong second half of 2025, after unrest had tempered growth earlier in the year. That forecast has now completely reversed.
"We are looking at between an 11% and 26% fall, rather than growth," said Goodger, emphasizing that the range depends largely on how long the U.S.-Iran war lasts. He cautioned that should the conflict stretch past the two-month mark, the region could see arrivals drop by more than a quarter.
Goodger also pointed to broader global implications. Roughly 14% of worldwide air transit activity flows through regional hub airports in Dubai, Abu Dhabi and Doha, Qatar.
"We haven't been able to fully quantify this, but it's definitely going to be a large blow to long-haul travel, notably between Europe and Asia," he said.
Airspace closures will force airlines to take longer routes and burn more fuel, making travel costlier. "Couple that with what we're seeing in terms of oil market disruption, jet fuel prices will be going up," Goodger said.
The uncertainty has prompted questions about where long-haul traffic could be rerouted. Alex Pio, a senior tourism specialist and consultant for the World Bank Group, suggested Istanbul as a potential substitute, though he acknowledged that replacing Dubai is easier said than done. Dubai is the second-busiest airport in the world, trailing only Hartsfield-Jackson in Atlanta, according to flight data firm OAG.
"Dubai is extremely well geographically placed to be a transit hub," said Pio. "But it's not just geography, it's the reliability. People can trust that there's going to be long-term, high investment in that airport. But if that gets eroded by constant conflict, then it becomes an issue."
If the war isn't a prolonged one, Dubai could rebound fairly quickly.
"After every period of disruption, Dubai has been able to bounce back," said Waleed Hazbun, a professor of Middle Eastern studies at the University of Alabama's Department of Political Science. Hazbun credited the market's resilience in part to its diverse base of inbound travelers.
"They get travelers from Europe, across the Arab world, from Asia and India," he said, adding that the destination also has "a lot of capital to invest when they need to do crisis management."
The UAE's most recent example of crisis management was pledging to cover accommodation costs for travelers stranded by airport closures. According to HVS's Choufany, the move is a smart long-term investment, helping to reinforce "long-term credibility, resilience and brand strength, which ultimately plays a pivotal role in accelerating recovery once market conditions stabilize."
Pio expressed similar confidence that Dubai's response will ultimately help it weather the storm.
"In the short term there's going to be some pain — canceled bookings, rerouted flights," he said. "But Dubai has a lot of capital in their corner, and they have a lot of capacity, so I think they'll be doing the right things to bounce back quickly."