The United Arab Emirates’ hospitality sector experienced significant headwinds during the first half of 2026, with regional instability affecting international travel patterns and airline capacity. National hotel occupancy across the emirates declined by nearly 28 percentage points year-over-year through June, while revenue per available room fell 31.8%, according to analysis from CBRE using CoStar data.
However, the downturn manifested unevenly across the country’s major tourism markets. Dubai experienced the most severe contraction, with occupancy dropping 24.6 percentage points compared to the prior year period, falling to 56.4% from 81% in the first half of 2025. Abu Dhabi demonstrated greater resilience, with occupancy declining by 13.5 percentage points to 66.8% from 80.3% in the same prior-year comparison. Ras Al Khaimah recorded an intermediate decline of 23.3 percentage points, with occupancy sliding to 49.3% from 72.6%.
The disparity between the two major emirates reflects their different tourism models. Dubai’s economy relies heavily on international leisure travelers arriving via air routes, which were disrupted by broader regional tensions affecting flight availability and demand. Abu Dhabi’s hospitality performance was bolstered by its calendar of scheduled events and stronger domestic tourism activity, which proved more resilient to the external shocks that dampened international travel to the region.
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