Hotel investors in the Gulf Cooperation Council (GCC) remain committed to long-term tourism growth despite disruption caused by the 2026 US-Iran conflict, according to a new hospitality industry survey covering around 160,000 hotel rooms across the region.
The report, published by HVS, found that geopolitical tensions have weakened hotel investor sentiment, affected aviation connectivity and reduced traveller confidence. However, most respondents do not view the situation as a structural crisis for the GCC hospitality sector.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The survey gathered views from hotel owners, developers, investors and real estate groups across Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman. It comes as GCC tourism markets continue to recover from airspace restrictions and travel disruption linked to the conflict.
“The market has not retreated from hospitality investment,” the report said. Instead, investors are “recalibrating risk, liquidity, timing and execution priorities” while maintaining confidence in the sector’s long-term outlook.
Investor caution grows
The research found that 43% of respondents have become more cautious since the conflict began, including 11% who described themselves as significantly more cautious. At the same time, 34% reported no major change in sentiment, while 22% said their outlook had become more positive.
According to HVS, investors are treating the current situation differently from the Covid-19 crisis. The report noted that the disruption is being driven mainly by aviation and traveller confidence rather than a collapse in tourism demand.
A combined 83% of respondents described their overall hospitality investment outlook as either positive or neutral. Only 17% reported a negative view.
The survey also showed that 45% of participants have experienced delays to hotel investment or development decisions. Many are preserving cash, postponing capital expenditure and reassessing project timelines while waiting for greater market visibility.
“Capital preservation has become the dominant short-term strategy,” the report said.
Hotel performance under pressure
Hotel performance across the GCC has been affected most strongly in destinations that depend on international visitors, airline connectivity, corporate travel and meetings and events business.
The survey found that 76% of respondents reported either moderate or significant negative effects on revenue per available room (RevPAR). Nearly half said RevPAR had fallen by more than 20%.
The timing of the disruption amplified the impact on hotel operators. The conflict coincided with one of the GCC’s busiest tourism periods, between March and May, when many hotels benefit from religious travel, leisure demand and business events.
The report estimated that the wider region was losing around US$600 million per day in visitor spending during the peak disruption period, citing data from the World Travel & Tourism Council.
Performance has not been uniform across the region. Hotels supported by domestic tourism, religious travel and staycation demand have generally shown greater resilience than properties that rely heavily on international arrivals.
“Domestic and religious demand are proving most resilient,” the report noted.
Despite weaker trading conditions, most hotels remain operational. Around 68% of respondents said their properties were still open but experiencing reduced performance, while 27% reported stable operations.
Long-term growth outlook intact
The survey suggests that investors continue to view GCC hospitality as a long-term growth market supported by government tourism strategies, infrastructure projects and expanding visitor economies.
A combined 41% of respondents said they still plan to build or acquire hospitality assets during the next 12 months, despite ongoing uncertainty.
The report identified air connectivity as the single biggest risk facing hotel investment across the region. Investors believe recovery will depend on the restoration of flight networks, traveller confidence and corporate mobility.
“Connectivity remains the sector’s most critical risk,” the report said.
HVS concluded that the GCC hotel sector is entering a more selective investment cycle rather than experiencing a broad retreat in capital. Investors are placing greater emphasis on liquidity, operational resilience and asset quality while continuing to back the region’s long-term tourism fundamentals.
The report said the current environment represents “less a collapse in investment confidence and more a recalibration of risk, pricing and timing” across the hospitality sector.
