Israel-Iran War Hits Dubai's Hospitality Sector, Tourism Drops Sharply

The impact of the ongoing conflict in the Middle East is now clearly visible in the UAE, especially in Dubai, one of the region's biggest hubs for tourism, trade, and finance. The tourism-driven economy is taking a major hit, with the hospitality sector among the worst affected.

Praveen Shetty, Chairman of Fortune Group of Hotels, who has been living in Dubai for over 35 years, told NDTV that the current situation is unlike anything he has seen before.

"This is different. During COVID, the impact was global. But this situation is different because it is linked to conflict. That always creates a different kind of uncertainty," he said. 

He highlighted that in the last 15 days, tourism has almost come to a standstill. "We don't have tourists. Flights have been affected, and major attractions are closed. That has directly hit business," he said. 

According to him, hotel occupancy has dropped drastically. "Right now, we are operating at only 30 per cent of what we used to. The decline has come during what is otherwise considered a busy period for tourism," he said.

"The slowdown has forced hotels to take cost-cutting measures. I have six properties. I have shut down two to three floors in many of them. Around 70 per cent of rooms are closed to manage costs like maintenance and electricity," he added.

Even in hotels near key business hubs like the World Trade Centre, multiple floors are being kept non-operational due to a lack of guests.

However, he pointed out that a small amount of business is still coming from corporate clients and a limited number of individual travellers already present in Dubai.

The food and beverage segment is also seeing pressure, partly due to the timing of Ramadan.

"During Ramadan, business is anyway slower. But we are hoping for some recovery around Eid," he said.

Despite the slowdown, Shetty expressed confidence in the UAE authorities. "During COVID, the government and landlords supported us. I believe they will step in again if needed," he said.

He also stressed that safety concerns have not led to panic among residents. "We are not scared. The alerts we receive are for safety. The UAE gives top priority to the safety of people," he said.

On whether he would consider leaving, his response was firm. "I will stay. I have thousands of staff. We are all united. We trust the government," he asserted.

Experts say Dubai's economy is deeply tied to tourism and trade, and any prolonged disruption can have a wider impact. However, there is also a strong belief within the industry that the city has the resilience to recover as it did after previous crises.