The 2026 US-Iran conflict has emerged as one of the most significant geopolitical disruptions to affect GCC hospitality since the COVID-19 period, creating immediate pressure on aviation, traveller confidence, hotel performance, and investment activity across the region.

While the operational shock has begun to stabilise following the ceasefire announcement and easing airspace restrictions, investor sentiment remains cautious and increasingly selective.

To assess the market response, HVS surveyed hotel owners, developers, investors, and hospitality-focused real estate groups representing an estimated 160,000 branded hotel rooms across the GCC.

The findings reveal a market that has not retreated from hospitality investment, but one that is recalibrating risk, liquidity, timing, and execution priorities under heightened geopolitical uncertainty.

The results indicate three defining market themes:

First, the current disruption is being transmitted primarily through aviation connectivity and traveller confidence rather than through structural demand collapse. Investors continue to differentiate the current environment from the COVID-19 period, with most viewing the disruption as temporary and regionally uneven rather than systemic.

Second, the impact is widening the performance gap between markets and asset types. Hotels supported by domestic demand, religious travel, and staycation activity are demonstrating stronger resilience, while assets dependent on international arrivals, airline connectivity, and corporate and MICE demand remain more exposed.

Third, capital preservation has become the dominant short-term strategy. Investors are prioritising liquidity management, deferring capex, slowing development activity, and reassessing underwriting assumptions while remaining engaged in the sector’s long-term growth fundamentals.

Despite weaker near-term visibility, confidence in GCC hospitality as a long-term investment class remains intact. Long-term tourism growth continues to underpin investor interest, supported by structural demand drivers including religious tourism, national tourism strategies, infrastructure expansion, and regional diversification agendas.

The findings suggest that the GCC hospitality sector is entering a period characterised less by retreat and more by disciplined capital deployment, selective expansion, and greater focus on operational resilience.

Read the full report here

Hala Matar Choufany, President - HVS Middle East, Africa and South Asia
Hala is an experienced Regional President and Managing Partner, an industry expert, and is recognized as one of the most influential leaders in the hospitality industry, notably in the Middle East and Africa region.

Hala has advised on more than 5,000 hospitality and mixed-use projects in the last 20 years across Europe, the Middle East, Africa and Asia. She has advised clients in areas such as Valuations, Acquisitions, Asset Management, Strategic investments and development, Contract Negotiations, and general Real Estate Strategic Advisory.

For more information, contact Hala at hchoufany@hvs.com