'Shutdown': Moody's expects Dubai hotel occupancy to plummet to 10 percent

The US-based financial analysis firm Moody's predicts that hotel occupancy in Dubai is set to plummet to 10 percent from a pre-war figure of 80 percent in the second quarter of the year, which ends on 1 July, The Wall Street Journal reported on Wednesday.

"This represents an effective shutdown of large parts of the hospitality sector," Moody’s said.

Dubai is facing an existential crisis with the US-Israeli war on Iran, which began on 28 February, forcing visitor numbers to fall sharply and leading to widespread hotel closures and job losses while decimating the global tourism hotspot's 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 - put in place after Iran launched retaliatory strikes on Gulf countries that house or cooperate closely with US forces - had been lifted. 

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