Dubai’s tourism industry faces catastrophic decline as US-Israel war with Iran slashes visitor numbers by up to 80%, forcing businesses across the emirate into survival mode.

City welcomed 1 crore 95 lakh 90 thousand international visitors last year, making it one of world’s most-visited destinations. However, conflict that began on February 28 has sharply disrupted that momentum.

Natasha Sideris, owner of Tashas hospitality group operating 14 outlets employing over one thousand people, reported tourist-dependent restaurants experiencing revenue declines of 70%-80%. Even establishments serving residents saw 50% drops. Crisis forced her to implement 30% salary cuts across all staff including herself.

“Current situation is brutal,” Sideris said. “I had a choice, either fire 30% of my staff or cut salaries to save jobs. I chose the latter for now.”

Senior executive at another restaurant chain, speaking anonymously, confirmed footfall dropped to just 15% to 20% of normal levels. Company placed more than half of staff on unpaid leave and temporarily shut several outlets.

Wider UAE has endured repeated attacks with Dubai among key targets of Iran’s military response following US and Israeli strikes. Authorities confirmed more than 2 thousand 400 missiles and drones launched towards UAE, targeting airports, ports, hotels and residential buildings. Officials said over 90% were intercepted and destroyed.

Debris fell across Dubai including major residential areas, hotels and airport. Images of fragments striking Fairmont hotel on upscale Palm Island circulated widely online. To date, 11 people lost lives and more than 185 sustained injuries across UAE, according to authorities.

Conflict disrupted air travel across region. Tens of thousands of visitors were stranded in early weeks before evacuation on special flights. Thousands of scheduled flights have been cancelled since conflict began, bringing one of region’s busiest travel hubs to standstill at times.

Dubai International Airport, world’s busiest for international passengers, handled 9 crore 52 lakh travellers last year. Flag-carrier Emirates now operates reduced flight schedule while working to restore full network operations.

Hotel occupancy levels across Dubai dropped to between 15%-20% of usual level for this time of year in weeks following war outbreak, according to Mamoun Hmiden, chief business officer at travel booking firm Wego. Hotels responded with deep discounts, particularly during Eid period. Some luxury properties on Palm Jumeirah cut prices by as much as half.

Hospitality chains temporarily shut properties or closed sections citing scheduled renovations, typically seen during quieter summer months. Senior executive at international hospitality group confirmed occupancy at some properties fell to single digits. “It made sense to cut operational costs by shutting down for few weeks and reviewing situation later,” he said.

Business hotels face pressure as Dubai, major hub for conferences and events, witnessed organisers cancel or postpone large gatherings. Majestic Hotels operating around 450 rooms across three properties reported occupancy dropped to record lows. “We are seeing cancellations beyond April,” said Varun Raj, cluster director of sales and marketing. “A lot of events have been cancelled, making it difficult for travellers to plan ahead.”

Data firm AirDNA shared that over 2 lakh 26 thousand 500 short-term bookings were cancelled across UAE between February 28 to March 29, first month since war began.

Downturn severely affects migrant workforce forming backbone of Dubai’s hospitality industry. Many workers saw hours reduced or were placed on unpaid leave. “It feels like we are back to Covid-19 period,” said South Asian waiter at high-end restaurant. “There are fears we could lose jobs again and be forced to go back home.”

Some hotels including five-star properties started laying off employees. Rights groups noted many migrant workers in UAE remain financially vulnerable, some carrying debt linked to recruitment fees.

Research by Tourism Economics suggests between 2 crore 30 lakh and 3 crore 80 lakh fewer people could travel to Middle East region this year depending on conflict duration. Between USD 3 thousand 400 crore and USD 5 thousand 600 crore in visitor spending could be lost.

Dubai announced USD 27 thousand 226 crore in support for businesses including tourism over next three to six months. Hotels will be allowed to delay sales-related fees and tourism dirham charges applied to guests.

Authorities are preparing revival plans including new campaigns and promotional offers once conflict subsides. “War is out of our control,” said one official. “But we are preparing for when it ends.”

Sideris hopes landlords will provide rent relief through deferred or reduced payments. She said recovery possible from October if war ends soon. “We’ve got enough cash to see us through 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,” she said.

Source: BBC