Moody's Forecasts Dubai Hotel Occupancy to Plunge to 10%
Theo Middle East Eye
Moody's predicts Dubai hotel occupancy will plunge to 10% in Q2 2025 due to the US-Iran conflict, effectively shutting down much of the hospitality sector. Tourist arrivals have collapsed, with Dubai Airport reporting a 66% drop in March passengers. The UAE has lifted flight restrictions to stimulate a recovery.
According to the Wall Street Journal on April 16, Moody's forecasts that Dubai hotel occupancy will fall to just 10% in Q2 2025 (ending July 1), compared to 80% before the US-Iran conflict erupted.
"This effectively means the closure of a large part of the hotel industry," Moody's said.
Dubai faces an existential crisis as the US-Iran war (which began on February 28) has slashed tourist numbers, forcing widespread hotel closures, job losses, and devastating a tourism industry that was a global hotspot.
On April 14, Dubai Airport reported first-quarter passenger traffic dropped by at least 2.5 million compared to the same period in 2025. In March alone, passenger numbers fell 66% as travelers avoided the Persian Gulf region.
While Moody's did not issue a full-year forecast, on April 12 the UAE lifted all flight restrictions (imposed after Iran retaliated against Gulf states linked to the US military) in an attempt to revive tourism.