Gulf hotel investment stands at about $300 million for 2026 to date, all from one transaction agreed before the war began, against at least $883 million in 2025, Skift reported on 5 October. The disclosed record therefore contains no post-war price, which matters to owners deciding whether to hold, to developers pricing new schemes and to lenders marking collateral.
The US-Iran war began on 28 February; a 60-day ceasefire reached in June expired with strikes exchanged and the US naval blockade still in place. The thesis is that operations have recovered faster than the forecasts behind valuations, but the gap between buyers and sellers has not closed, and a record pipeline count does not show that development capital is intact.
Table of Contents
1. The only 2026 deal was priced before the war
The 2026 total is the AED1.1 billion purchase of the Shangri-La Dubai by AHS Properties, agreed before the conflict and closed on unchanged terms. Skift counts only five disclosed Gulf transactions, worth about $1.45 billion, between November 2024 and September 2026, roughly 80% of it in Dubai. The series covers disclosed deals only and is thin, so it can show a pause but not measure its depth.
Knight Frank’s Wrenn said assets marketed before the disruption remain unsold, with sellers becoming more pragmatic about recovery periods in their asking prices. Cavendish Maxwell’s Ali Siddiqui described investors rerunning feasibility studies and watching Q4.
HVS’s survey, published in May and covering owners and developers representing about 160,000 branded GCC rooms, found 45% of respondents had delayed investment or development decisions and 43% had become more cautious. It also found holding assets was the most common 12-month strategy. Intention is not execution, and the survey was taken at the trough.
2. Dubai occupancy beat the forecast, which is the sellers’ best argument
The first-half damage was severe. UAE-wide occupancy fell nearly 28 percentage points and RevPAR fell 31.8% year on year through June, according to a CBRE report citing CoStar data. Dubai fell furthest, with occupancy down 24.6 points to 56.4% and RevPAR down 35.2%.
CoStar’s Q2 forecast expected Dubai occupancy to reach a ceiling of just over 40% through the summer. In August, Dubai’s government reported hotel occupancy of 66%, up from 36% in March and 89% of the August 2025 level. Brookfield’s Jad Ellawn told an industry panel that yields remain high enough to make some projects viable at current borrowing costs. That is the case for sellers holding out.
3. Part of the rebound is a smaller denominator, and rate has not recovered
The government and CoStar series measure different things, so the 66% is not a like-for-like beat of the forecast. Skift reported that roughly 5,400 Dubai rooms were pulled from supply as operators accelerated renovation closures. That inflates occupancy on the remaining inventory. Ellawn conceded that average daily rates had softened as hotels sought to bring demand back.
CoStar’s forecast does not have rate back soon. It expects full-year Dubai occupancy to reach 2025 levels only in 2028, and a buyer underwriting on RevPAR has to price that. The data does not settle which side is right, and a trade at a stated price would. Dubai’s RevPAR for the second half is not yet published.
4. A record pipeline counts intentions while the under-construction count falls
LE’s Q2 2026 count for the Middle East, which includes Egypt and Iraq as well as the Gulf, hit a record 724 projects and 178,003 rooms, up 11% by projects and 10% by rooms year on year. Beneath the headline, under-construction projects stood at 330 projects and 82,353 rooms, against 337 projects and 86,447 rooms a year earlier. That is down about 2% by projects and 5% by rooms. The growth is in early planning, which reached a record 221 projects, up 33%.
LE now forecasts 83 openings and 15,149 rooms for 2026. Its Q2 2025 forecast for the same year was 94 hotels and 19,019 rooms, a cut of about 12% by hotels and 20% by rooms. The cut is regional and the data does not isolate the war as the cause. The UAE’s pipeline, at 103 projects, was up only 3% by projects. No hotels launched in Dubai or Abu Dhabi in the first half, JLL data showed, and Skift reported the Gulf pipeline shrinking by five projects and 1,103 rooms quarter on quarter.
A pipeline count is not a financing count. Projects usually stay in such databases until cancelled, so the lag between a stalled financing and a removed project may be long. LE’s Jason Ford said in May that the full impact on delays, cancellations and financing withdrawals had yet to materialise at the Q1 close. Cancellations are unproven, and the Q2 data does not show them yet.
LE’s record 88 brand conversions, up 92% by rooms, fit CBRE’s April expectation of more conversion activity. They point to a shift towards existing buildings, though conversions count renovation scope as well as war response.
5. The first post-war price will settle the argument
CoStar’s forecast, published in Q2, expects occupancy to improve rapidly in Q4 2026 and into Q1 2027. That is an attributed forecast. HVS names air connectivity as the biggest single risk to hotel investment, and the Hormuz stalemate keeps that risk open.
The publication’s own scenario is this. If winter occupancy holds near 2025 levels with rate recovering, sellers will resist discounts and deals will clear close to pre-war pricing. If occupancy recovers on discounted rate, buyers’ underwriting wins and the first post-war trade prints below. Either outcome would be contradicted by evidence the other way, such as a disclosed deal on the other side’s terms, or LE’s next quarterly report showing under-construction rooms rising or falling sharply.
The next signals are Dubai’s winter-season trading, LE’s Q3 Middle East pipeline report and the first Gulf hotel transaction priced after 28 February.
Data Source
- Skift, “Gulf Hotel Deals Stall as U.S.-Iran War Scrambles Valuations”, 5 Oct 2026. Skift’s compilation of five disclosed Gulf hotel deals from Nov 2024 to Sep 2026, with Knight Frank and Cavendish Maxwell comment.
- Lodging Econometrics, Q2 2026 Middle East Construction Pipeline Trend Report, via Hospitality Net, 13 Aug 2026. Regional pipeline by stage, chain scale, country and city.
- Lodging Econometrics, Q2 2025 Middle East Construction Pipeline Trend Report, via Hospitality Net. The year-earlier comparison and the prior openings forecast.
- Skift, “UAE’s Hotel Divide: Abu Dhabi Holds Up While Dubai Sinks”, 11 Aug 2026. Summarises a CBRE report citing CoStar data for UAE H1 2026 occupancy and RevPAR.
- The National, “Dubai visitor numbers begin to recover”, 13 Sep 2026. Dubai Media Office occupancy for August and March 2026.
- The National, “UAE’s hospitality sector shifts from crisis to recovery”, 14 Sep 2026. JLL H1 2026 RevPAR and the absence of Dubai and Abu Dhabi launches.
- CoStar, Global Hotel Market Forecast Assumptions, Q2 2026. STR/CoStar’s Dubai and Abu Dhabi outlook.
- HVS, “Hospitality in the GCC: Hotel Owner and Investor Sentiment on the U.S.-Iran Conflict”, May 2026. Owner and developer survey covering about 160,000 branded GCC rooms.
- Hotel Management Network, “GCC hotel investors remain confident despite conflict”. Survey percentages on delays, caution and connectivity risk.
- Skift, “Gulf Hotel Investment Enters Pause Mode”, 19 May 2026. Lodging Econometrics comment on the Q1 close.
- Skift, “Taj Starts Bringing Staff Back to Dubai Hotels”, 20 Aug 2026. About 5,400 Dubai rooms pulled from supply.
- AGBI, “Dubai hotel rebound draws global investor interest”, Sep 2026. Brookfield’s view on duration of the demand fall and yields. I used search excerpts because the full page blocked retrieval.
- CoStar, “War in Iran will redirect hotel capital flow to other destinations”, 8 Apr 2026. IHIF panel comments, including CBRE’s conversion expectation.
- Scripps News, “Trump says no talks planned with Iran after 60-day ceasefire deal expires”. War status.
