The UAE entered the new year with a strong economic and financial track record. In addition, the outlook for 2026 was bright. Before regional developments shifted the outlook The Emirates recorded a nominal GDP of USD 569.10 billion, up by 4.8 percent, according to the International Monetary Fund. Equally, inflation was stable. Projections indicated that the economy was forecast to grow by more than 5 percent. Notably, the non-oil sectors were forecast to surpass 5.5 percent, accounting for 78 percent of national GDP.
The country confirmed its competitiveness and attractiveness to businesses and investors globally, thanks to more flexible regulations. Importantly, it is also emerging as a global artificial intelligence (AI) destination. Non-oil sectors, led by tourism and real estate, continued to flourish. Meanwhile, fiscal surpluses increased, with the government setting them aside as a cushion against shocks and to safeguard stability.
UAE sets transport benchmarks
Infrastructure and transport also recorded major successes. Significantly, Abu Dhabi and Dubai airports broke traffic records, registering 33 million and 95.2 million international travelers in 2025, respectively. These impressive figures have helped to cement the UAE’s position as a global aviation hub. Indeed, Dubai’s figures mark the highest annual international passenger traffic ever recorded by any airport. Major developments also began moving forward on the ground. In particular, the Etihad rail project is due to launch at the end of this year. Connecting 11 cities across the country, the highly anticipated 900-km-long passenger train will offer millions of commuters an alternative to the Emirates’ heavy traffic. In Dubai, there are also plans for new metro extensions from Expo City to Al Maktoum International Airport.
Record-breaking tourism in 2025
The tourism industry flourished in 2025, contributing USD 70 billion to the economy and accounting for approximately 14 percent of GDP. Hotel occupancy levels remained steady at around 80 percent throughout 2025 and up to February 2026. According to Coldwell Banker Richard Ellis, average daily rates (ADRs) and revenue per available room (RevPAR) increased in 2025 by over 10 percent and 14 percent respectively. Notably, the Hospitality Advisory Council recorded 1,260 hotels and approximately 216,900 hotel rooms at the end of December 2025. According to Dubai authorities, the city welcomed 19.59 million visitors in 2025 followed by
2 million in January 2026. Dubai is making significant investments in the sector, with the aim of attracting 40 million visitors by 2030. Furthermore, investment in travel and tourism is forecast to gradually rise, reaching USD 20.3 billion by 2027. Meanwhile, Abu Dhabi delivered strong results, welcoming 4.4 million hotel guests and generating revenues of USD 1.59 billion.
New openings and investment
Several new resorts were set to debut in 2026. The country’s first Six Senses was expected this summer in Dubai on the Palm Jumeirah’s Western Crescent. Alongside this, hotel chains Mondrian, Kimpton and Baccarat were set to open later this year. Furthermore, the Thai-born Aman brand has announced a new branch for Dubai in 2027. With a focus on luxury, it will feature a private beach, branded residences and a spa. Meanwhile, the emblematic Las Vegas landmark Bellagio is poised to join The Island Dubai development project, offering premium entertainment and luxury services. In addition, several floating projects are in the works, including the Buddha Bar, the Kempinski Floating Palace and the Floating Venice. One major talking point is a complex taking shape on the World Islands called the Honeymoon Island. Looking ahead, there are plans for Rosewood to make its Dubai debut in Jumeirah Beach in 2029.
Beyond this, Dubai property heavyweight Azizi Developments unveiled a major hospitality investment program. Its plans include building 151 new hotels, 90 percent of which will be located in Dubai. With a budget estimated at Dh75 billion, the program will see 60,000 rooms added to Dubai’s tourism portfolio. Moreover, the initiative should generate over 75,000 jobs required to service the properties. The program comprises 100 four-star hotels, 50 five-star hotels and a seven-star property in a new skyscraper on Sheikh Zayed Road.
Unified visa on the horizon
Significantly, the highly anticipated GCC Unified Tourist Visa is expected to be introduced in late 2026. Informally known as the “Grand Tours Visa” and long awaited, the initiative bodes well for international visitors. Under the new system, tourists will be able to travel between the UAE, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain with a unique, Schengen-style visa. For example, tour operators can begin offering packages pairing Dubai’s nightlife and Saudi Arabia’s historical sites. In other developments, local destinations and personalities have received high-profile accolades on the global stage. The town of Al Ain was named Capital of Arab Tourism for 2026. Meanwhile, the title of “Best Tourism Village in the World 2025” went to the village of Masfout in Ajman. Furthermore, Shaikha Al Nowais became secretary-general of UN Tourism in a move that marked a promotion.
The specter of uncertainty
However, despite its strong fundamentals, the UAE has not been immune to the effects of the regional conflict. According to Moody’s Analytics, hotel occupancy in Dubai fell to 10 percent in the second quarter of 2026 on the back of lower visitor confidence, pushing down room rates. Air connectivity has also been disrupted, further affecting visitor numbers.
The conflict has also delayed opening timelines for some of the country’s large-scale projects, including the Wynn Al Marjan Island in Ras Al Khaimah. The UAE’s first licensed casino resort had already revised its planned opening from 2026 to early 2027. A new timeline has yet to be confirmed.
To counter reduced occupancy, many hotels are advertising staycations as alternative holidays for locals who usually choose to travel abroad. Other properties have taken the opportunity to close temporarily for renovation. These include the Armani Hotel Dubai, the Burj Al Arab and the St. Regis Dubai The Palm. Reopenings are targeted for later in 2026 and 2027.
The external situation has also weighed on the events industry, with organizers rescheduling several fixtures to a later date, including fairs and sports competitions. Most, though, remain on the agenda. Ultimately, the duration and resolution of the conflict will be a defining factor in shaping the Emirates’ outlook for the remainder of 2026.
The UAE: firm foundations, bold ambitions
The Emirates began 2026 with momentum on its side. Strong economic fundamentals and record 2025 tourism figures had set the pace for another successful year, before regional developments shifted the outlook. Nada Alameddine, managing partner at Hodema Consulting Services, tracks the milestones and assesses what the remaining months may bring.
The UAE entered the new year with a strong economic and financial track record. In addition, the outlook for 2026 was bright. Before regional developments shifted the outlook The Emirates recorded a nominal GDP of USD 569.10 billion, up by 4.8 percent, according to the International Monetary Fund. Equally, inflation was stable. Projections indicated that the economy was forecast to grow by more than 5 percent. Notably, the non-oil sectors were forecast to surpass 5.5 percent, accounting for 78 percent of national GDP.
The country confirmed its competitiveness and attractiveness to businesses and investors globally, thanks to more flexible regulations. Importantly, it is also emerging as a global artificial intelligence (AI) destination. Non-oil sectors, led by tourism and real estate, continued to flourish. Meanwhile, fiscal surpluses increased, with the government setting them aside as a cushion against shocks and to safeguard stability.
UAE sets transport benchmarks
Infrastructure and transport also recorded major successes. Significantly, Abu Dhabi and Dubai airports broke traffic records, registering 33 million and 95.2 million international travelers in 2025, respectively. These impressive figures have helped to cement the UAE’s position as a global aviation hub. Indeed, Dubai’s figures mark the highest annual international passenger traffic ever recorded by any airport. Major developments also began moving forward on the ground. In particular, the Etihad rail project is due to launch at the end of this year. Connecting 11 cities across the country, the highly anticipated 900-km-long passenger train will offer millions of commuters an alternative to the Emirates’ heavy traffic. In Dubai, there are also plans for new metro extensions from Expo City to Al Maktoum International Airport.
Record-breaking tourism in 2025
The tourism industry flourished in 2025, contributing USD 70 billion to the economy and accounting for approximately 14 percent of GDP. Hotel occupancy levels remained steady at around 80 percent throughout 2025 and up to February 2026. According to Coldwell Banker Richard Ellis, average daily rates (ADRs) and revenue per available room (RevPAR) increased in 2025 by over 10 percent and 14 percent respectively. Notably, the Hospitality Advisory Council recorded 1,260 hotels and approximately 216,900 hotel rooms at the end of December 2025. According to Dubai authorities, the city welcomed 19.59 million visitors in 2025 followed by
2 million in January 2026. Dubai is making significant investments in the sector, with the aim of attracting 40 million visitors by 2030. Furthermore, investment in travel and tourism is forecast to gradually rise, reaching USD 20.3 billion by 2027. Meanwhile, Abu Dhabi delivered strong results, welcoming 4.4 million hotel guests and generating revenues of USD 1.59 billion.
New openings and investment
Several new resorts were set to debut in 2026. The country’s first Six Senses was expected this summer in Dubai on the Palm Jumeirah’s Western Crescent. Alongside this, hotel chains Mondrian, Kimpton and Baccarat were set to open later this year. Furthermore, the Thai-born Aman brand has announced a new branch for Dubai in 2027. With a focus on luxury, it will feature a private beach, branded residences and a spa. Meanwhile, the emblematic Las Vegas landmark Bellagio is poised to join The Island Dubai development project, offering premium entertainment and luxury services. In addition, several floating projects are in the works, including the Buddha Bar, the Kempinski Floating Palace and the Floating Venice. One major talking point is a complex taking shape on the World Islands called the Honeymoon Island. Looking ahead, there are plans for Rosewood to make its Dubai debut in Jumeirah Beach in 2029.
Beyond this, Dubai property heavyweight Azizi Developments unveiled a major hospitality investment program. Its plans include building 151 new hotels, 90 percent of which will be located in Dubai. With a budget estimated at Dh75 billion, the program will see 60,000 rooms added to Dubai’s tourism portfolio. Moreover, the initiative should generate over 75,000 jobs required to service the properties. The program comprises 100 four-star hotels, 50 five-star hotels and a seven-star property in a new skyscraper on Sheikh Zayed Road.
Unified visa on the horizon
Significantly, the highly anticipated GCC Unified Tourist Visa is expected to be introduced in late 2026. Informally known as the “Grand Tours Visa” and long awaited, the initiative bodes well for international visitors. Under the new system, tourists will be able to travel between the UAE, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain with a unique, Schengen-style visa. For example, tour operators can begin offering packages pairing Dubai’s nightlife and Saudi Arabia’s historical sites. In other developments, local destinations and personalities have received high-profile accolades on the global stage. The town of Al Ain was named Capital of Arab Tourism for 2026. Meanwhile, the title of “Best Tourism Village in the World 2025” went to the village of Masfout in Ajman. Furthermore, Shaikha Al Nowais became secretary-general of UN Tourism in a move that marked a promotion.
The specter of uncertainty
However, despite its strong fundamentals, the UAE has not been immune to the effects of the regional conflict. According to Moody’s Analytics, hotel occupancy in Dubai fell to 10 percent in the second quarter of 2026 on the back of lower visitor confidence, pushing down room rates. Air connectivity has also been disrupted, further affecting visitor numbers.
The conflict has also delayed opening timelines for some of the country’s large-scale projects, including the Wynn Al Marjan Island in Ras Al Khaimah. The UAE’s first licensed casino resort had already revised its planned opening from 2026 to early 2027. A new timeline has yet to be confirmed.
To counter reduced occupancy, many hotels are advertising staycations as alternative holidays for locals who usually choose to travel abroad. Other properties have taken the opportunity to close temporarily for renovation. These include the Armani Hotel Dubai, the Burj Al Arab and the St. Regis Dubai The Palm. Reopenings are targeted for later in 2026 and 2027.
The external situation has also weighed on the events industry, with organizers rescheduling several fixtures to a later date, including fairs and sports competitions. Most, though, remain on the agenda. Ultimately, the duration and resolution of the conflict will be a defining factor in shaping the Emirates’ outlook for the remainder of 2026.
Nada Alameddine
Managing Partner
Hodema Consulting Services
hodema.net
@a_snada
@hodema
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