Dubai and Abu Dhabi Will Not Recover 2025 Hotel Levels Before 2028

STR and Tourism Economics lowered their forecasts for revenue per available room (RevPAR) across several markets, cutting Europe's 2027 outlook to a slight decline of 0.1% and lowering Asia-Pacific growth in 2026 to 3.9% from 4.4%.

Estimates indicate that Abu Dhabi will end 2027 with a hotel occupancy rate of 75.4%, while Dubai will reach 72.4%, both several points below their peak levels recorded in 2025.

The report described demand in the Middle East as resilient despite the Iranian war, but did not raise fourth-quarter forecasts for 2026, suggesting the market will likely recover its previous levels by 2028.

This adjustment comes at a time when Gulf countries increasingly rely on hotel revenues within their tourism plans, making the delayed recovery until 2028 a pressure factor on forecasts for operators and investors in the sector.

What do these terms mean?

RevPAR (Revenue Per Available Room): A metric that measures the average daily revenue generated by a hotel room, whether occupied or not, and is considered the most important indicator for measuring hotel performance.

Hotel Occupancy Rate: The percentage of occupied rooms out of the total available rooms in a hotel during a specific period. A higher rate indicates stronger demand for accommodation.

Fourth Quarter: The period spanning from October to December, used in financial reporting to compare quarterly performance.