GCC compression could hit 15% to 20%

MIDDLE EAST – While a limited number of inbound and outbound flights are starting to move in the Middle East and GCC states, travel and tourism to the region continues to suffer as a result of the conflict in Iran.

Dubai-based HVS President for the Middle East and Africa Hala Matar Choufany told Hotel Investment Today that it would be reasonable to expect a 15% to 20% compression in accommodated room nights by year-end across key GCC cities, particularly if the current conflict persists through 2Q26.

“The timing is critical; March and April typically represent peak trading months for the region, driven by leisure demand, religious travel, and strong corporate activity,” Choufany said.

As Iran has been lobbing missiles into neighboring UAE states, Qatar and Saudi Arabia to create further instability in the region, Bloomberg reported on Tuesday that the United Arab Emirates and Qatar are privately lobbying allies to help them persuade U.S. President Donald Trump to end the conflict and avoid a more significant spike in energy prices. Higher oil prices will likely have a knock-on effect on global tourism.

Ryan Holdings Plc CEO Michael O’Leary predicted at a press conference in Poland that tourism flows to the Persian Gulf will suffer in the next year or two as a result of the Iran war, though he said demand will bounce back eventually because regional governments will lure travelers with discounts.

Bloomberg reported O’Leary said any prediction on the longer-term impact depends on how long the war will go on. For his part, he believes the war will be over quickly.

On the tourism front, tour operators have paused some Middle East itineraries. Collette will cancel all departures for one itinerary and two extensions through March 21, said a company spokeswoman. The affected itineraries are the company’s Dubai extension, Jordan extension and Journey Through Egypt & Jordan tour.

Tauck posted a travel update on its website that said it had canceled the March 2 departure date for its Jordan and Egypt: Petra to the Pyramids itinerary due to uncertainty in the region and current flight disruptions.

On Tuesday, March 3, Dubai International Airport had resumed “a small number of flights.” Emirates is operating a limited number of passenger repatriation flights, while all other services to and from Dubai remain suspended until 23:59 local time on March 4. Etihad Airways flights to and from Abu Dhabi remain suspended until 14:00 local time on March 5. Qatar Airways flight operations also remain temporarily suspended.

Thousands of travelers remain stranded at airports across the Gulf region after joint U.S. and Israel military strikes on Iran over the weekend led to mass airline cancellations for the Middle East region.