Gulf Tourism Slump Tests Recovery Plans as Arrivals Drop 30%

International tourist arrivals to the Gulf Cooperation Council bloc fell 30 percent in May 2026 compared with May 2025, according to UN Tourism’s Dashboard. That drop echoes, to a degree, the pandemic-era decline from which the sector took time to recover. The difference now is that the shock is a regional conflict rather than a global health crisis, and the Gulf states have far less agency over its course. Even so, the region’s tourism delivery machine is holding, unevenly, under conditions no Gulf operator has managed before.

The operational story begins with airports and airspace. Since 28 February 2026, when the conflict began amid Iranian aggression toward the Gulf states, Iran has attacked Gulf airports and airspace, prompting numerous airlines to suspend flights to Gulf capitals. Bahrain initially evacuated its air carriers to nearby Saudi Arabia. As risks eased, Gulf carriers kept flying globally and some international carriers returned hesitantly. Gulf carriers now operate at roughly 90 percent of pre-conflict capacity, though the estimated number of seats filled has dropped sharply. Emirates has signed seven new tourism deals covering destinations across different regions.

Additional reference context is available at https://orfme.org/expert-speak/the-gulfs-fragile-tourism-recovery/.

The risks have not disappeared. In October, an Iranian proxy attacked King Khalid International Airport in Riyadh, causing more casualties and a longer closure than the Iranian attack on Kuwait airport in June. The Flydubai terror attack, though not directly linked to Iran, showed how regional extremism compounds the problem. The one policy measure adopted across the Gulf has been to reopen airports as soon as feasible. Full normalcy is hard to achieve, but a measure of regularity persists.

That regularity is what event organisers have been watching. Several events were cancelled this year, including the Bahrain Airshow, the Saudi Formula 1 race, the Offlimits music festival in Abu Dhabi that was due to be headlined by Shakira, and more recently the Future Investment Initiative conference in Riyadh. Yet other organisers simply postponed until later in the year, using a weeks-long evaluation period to judge how the conflict unfolds. That calculus appears to have weighed the performance of Gulf militaries in minimising risks to lives: interception rates, early warning systems, and the general sense of security maintained. Organisers seem to be distinguishing between a temporary security shock and a fundamental loss of confidence in the Gulf as a destination, and concluding that exposure has not reached the threshold where everything must be scrapped.

Governments, in turn, have worked to keep the hospitality sector solvent and ready for a gradual recovery. Dubai reportedly released a US$400 million economic incentive package for affected sectors, alongside measures such as suspending the nightly hotel tax and removing a municipal tax from hotel and restaurant bills. The Bahrain Tourism and Exhibitions Authority introduced an optional deferral of first-quarter fees for industry businesses. These are continuity-of-service measures, built on the expectation of a relatively short war, and they may be harder to sustain if the conflict drags on.

Meanwhile, the results are visible in the resurgent schedule, especially in the UAE, where the Arabian Travel Market in Dubai drew representatives from 115 countries, not long before Syrian President Ahmed Al-Sharaa spoke at the Arab Media Summit in September. That would not have happened without policymakers reaching out to reassure organisers about rescheduling, and organisers reciprocating with confidence in the Gulf ecosystem. Most of these gains cluster around the UAE, Saudi Arabia, and Oman, which have been less affected so far, though the UAE has sustained the heaviest impact among them. Bahrain, Kuwait, and Qatar have been hit more severely.

The most telling delivery innovation has been relocation: hosting major events abroad under the original host’s name. Saudi Arabia moved the third edition of its Esports World Cup, launched in Riyadh in 2024 and originally set for the same capital in 2026, to Paris for this year alone. The Saudi Telecom Company kept its main partner status, including naming rights for the STC Arena zone and the STC Players Lounge, plus a dedicated competitive platform called STC Contenders. French President Emmanuel Macron hosted Crown Prince and Prime Minister Mohammed bin Salman in Paris, where they attended the closing ceremony. Similarly, the Bahrain Grand Prix, originally set for the Bahrain International Circuit in Sakhir from 10 to 12 April, ran at the Sepang International Circuit in Malaysia in October, retaining its name, with tickets even sold on the Bahrain GP website. Malaysia was chosen not only for scheduling convenience between the Azerbaijan and Singapore GPs on 2 to 4 October, but because it is an increasingly important economic partner: AirAsia X had been scheduled to launch a regional hub in the Kingdom this year, a launch postponed to the first quarter of 2027 because of the conflict. What could have been a lost event instead deepened economic ties, with Malaysia gaining the economic activity and visibility of hosting a global sporting event.

Looking ahead, Gulf states are turning to intra-GCC tourism as a buffer. Oman saw nearly 64,000 guests book into Omani hotels for Eid al Fitr this year, a 60 percent increase over last year, with a striking 70 percent coming from neighbouring Gulf countries. Bahrain’s Minister of Tourism Fatima Al Sairafi called in September for stronger tourism cooperation and integration among Gulf states, and GCC Secretary-General Jasem Mohamed AlBudaiwi has said a unified GCC tourist visa will “see the light soon.”

By contrast with the pandemic, which was managed through public health policy, the Gulf has limited control over a conflict shaped by the Trump administration and Iran’s proclivities. The biggest challenge now is understanding the time horizon and formulating policy accordingly. Current policies are working, but they remain shots in the dark in unfamiliar territory. Hopes remain high for 2027, though that will depend on the situation.