Dubai is facing an existential crisis with the US and Israeli war on Iran forcing tourism numbers to fall sharply, with widespread hotel closures and job losses decimating the global tourism hotspots' hospitality sector.

On Monday, Dubai Airports reported that first-quarter passenger traffic was down by at least 2.5 million from the same period in 2025, with March seeing a 66 percent drop in passenger numbers as travellers chose to steer clear of the Gulf.

The company did not specify forecasts for this year but on Saturday, in a bid to kickstart tourism, the UAE announced that all air travel restrictions that were put in place after Iran launched retaliatory strikes on all six Gulf Cooperation Council (GCC) countries that house or cooperate closely with US forces had been lifted.

In a post on their official X account, the Civil Aviation Authority wrote: "Our decision came following a comprehensive assessment of operational and security conditions, in coordination with the relevant authorities".

The statement was clearly meant to relay confidence to international travellers, especially after several European airlines announced that they would be suspending flights to the Middle East.

Workers and business owners in Dubai, who spoke to the Middle East Eye on condition of anonymity due GCC-wide restrictions on public statements about the effects of Tehran’s attacks, say it will still take some time to see if the announcement will restore confidence among travellers and investors.

Charity, a Kenyan hotel worker said the mid-priced hotel she works at was definitely affected by the 1.4 million people who travelled through the UAE over the first two weeks of March.

During the Muslim holy month of Ramadan, when Iranian missile and drone attacks were at their worst, the hotel, part of a US-based chain, was full of stranded passengers who would meet with Emirates Airlines representatives in the lobby.

During the month, the hotel's pool was closed to guests and by the final days, guests staying in the higher floors of the 20-floor building were moved to the lower floors as a precautionary measure.

"Businesses were suddenly liquidating their assets".

She said her family was now looking at options in Europe to gradually shift to.

Antoine, an editor who helps train amateur writers said one of his clients who works at an advertising agency was left with the burden of those liquidations.

"She was in charge of finding 1,000 workers in the UAE to let go of," he said. Antoine was particularly struck by the fact that even an advertising firm would be so immediately impacted.

"You'd think advertising would be a war-proof industry," he said.

Tatiana said her work has been particularly affected by the attacks.

"Our whole business is predicated on assuring people that the UAE is a safe, convenient place to do business," she said.

Her statement is almost identical to what Arjun, one of the 3.5 to 4.3 million Indian residents of the UAE, said outside a late evening screening of the Michael Jackson biopic.

Arjun said he was happy to see the screening at near capacity, hoping it was a sign of a gradual return to normal.

"The entire ethos of Dubai as this place free from conflict was shaken," he said.

Source: Middle East Eye