Saudi Arabia's hospitality sector is likely to remain relatively resilient over the remainder of 2026, supported by strong domestic tourism activity and the continued importance of religious travel. However, softer inbound demand due ongoing geopolitical uncertainty are expected to create varying market conditions across destinations in the near term. Inbound tourism activity moderated during the first quarter of 2026, with international visitor arrivals declining by 13% year-on-year to 8.3 million visitors and inbound tourism expenditure decreasing by 7% to SAR 48 billion. Despite the slowdown, international visitors remained the largest contributor to tourism spending, accounting for approximately 58% of total tourism expenditure. The decline was partly driven by heightened geopolitical tensions across the Middle East, which disrupted regional travel patterns, prompted flight suspensions by several international carriers, and contributed to greater caution amongst international travellers. Stronger domestic tourism activity, however, helped cushion the impact, with visitor volumes and expenditure continuing to grow through the quarter.

Abu Dhabi's residential market delivered a record-breaking start to 2026, despite a more challenging macroeconomic backdrop. Approximately 8,100 residential sales transactions were recorded in Q1 2026, representing a 123.6% increase compared to the same period last year, with total sales value reaching AED 38.1 billion, the highest quarterly figure on record and a 211.5% increase year-on-year. Market activity continued to be dominated by the off-plan segment, which accounted for over four-fifths of all residential transactions and nearly 90% of total sales value, supported by new project launches and strong interest from both domestic and international buyers.

Geopolitics and hospitality markets For many years, the geopolitical significance of the hospitality industry has been widely recognised.[1] Gulf governments are well aware that hospitality plays a role in the projection of ‘soft power’, for example in the staging of international diplomatic events,[2] as witnessed through the internationally recognised significance of holding COP28 in Dubai.[3] Conversely, geopolitics is no longer […]

Dubai’s office market recorded a strong start to 2026, supported by continued business formation and sustained investor interest. Despite regional tensions escalating in March, business inflows remained resilient, with the Dubai Chamber of Commerce registering 2,709 new member companies during the month alone. This momentum was reflected in DIFC, which attracted 775 new companies across the quarter, with March emerging as its strongest month at 258 new registrations, up 59% year-on-year, further reinforcing Dubai’s standing as the region’s preferred business destination.