Abu Dhabi is ‘doubling down’ on tourism despite Iran war

The Louvre Abu Dhabi art museum is pictured in the Saadiyat Cultural District, on September 15, 2023. (Natalie Naccache/Bloomberg/Getty Images via CNN Newsource)

The repercussions of the Iran war have been felt globally, but the United Arab Emirates has suffered a more direct impact than most, targeted by missile and drone strikes. Those attacks have also threatened its image as a glamorous haven for tourists to the Middle East.

Still, Abu Dhabi is pushing ahead with major tourism initiatives. It announced on May 14 it will invest US$1.7 billion in an immersive experience centre called Sphere. Operated by US-based Sphere Entertainment Co, the first Sphere opened in Las Vegas in 2023 and has hosted concerts by U2 and Phish.

“We are doubling down on our tourism ecosystem as a whole,” Mohamed Khalifa Al Mubarak, the chairman of Abu Dhabi’s Department of Culture and Tourism (DCT), told CNN’s Becky Anderson on the day of the announcement.

Abu Dhabi, capital of the United Arab Emirates (UAE), has invested heavily to develop its tourism industry in a bid to diversify its economy away from oil, including building attractions like the Saadiyat Island Cultural District, which is home to an international outpost of the Louvre. A branch of the Guggenheim Museum is nearing completion.

In 2025, Abu Dhabi hosted 26.6 million visitors and 5.9 million hotel guests, according to its tourism agency. The emirate hopes to attract 39.3 million visitors per year by 2030, and increase the sector’s contribution to its gross domestic product to AED90 billion ($24.5 billion).

But the UAE has faced strikes from Iran in response to the war the US and Israel launched on Tehran in late February. Drones have targeted tourist infrastructure in the country, including airports.

A drone strike last Sunday that caused a fire outside a nuclear facility “threatened nuclear safety in the country,” according to the International Atomic Energy Agency. Abu Dhabi authorities said there was no release of radioactive material, and no risk to the public or environment.

Hotel occupancy rates in Abu Dhabi during the Eid al-Fitr holiday in mid-March fell by 45 per cent compared with last year, according to real estate data and analytics provider CoStar.

The war triggered widespread flight cancellations. Although the UAE fully lifted airspace restrictions in early May, many airlines still haven’t resumed flights. Germany’s flagship carrier Lufthansa, for example, has suspended flights to Abu Dhabi until late October.

Al Mubarak told CNN that international travelers are starting to return. “Regional tourism is really picking up right now,” he said.

Abu Dhabi flagship airline Etihad is currently operating at around 80 per cent capacity. About 250 flights arrived at Zayed International Airport on February 27, the day before the war began, according to tracking website Flightradar24. By comparison, around 200 flights a day were arriving at the airport at the end of this week.

Aaron Goldring, a tourism-focused senior economist at advisory firm Oxford Economics, said that the perception of safety is important for tourists. He expects the UAE to undertake significant marketing and other initiatives to improve that perception. Tourism “is already a really important sector for them, but also for the future,” he said.

“The length of the conflict will impact how long it will take to recover,” he added.

‘A long game’

The emirate first announced its intention to build the Sphere in October 2024. On the May 14 announcement of investment, James L. Dolan, CEO of Sphere Entertainment, said in statement that: “Sphere Abu Dhabi will establish Yas Island as a destination in the region for immersive experiences, and we look forward to working with DCT Abu Dhabi to see this venue come to life.”

Investment in the venue, which is set to be complete in 2029, is a “clear signal” of Abu Dhabi’s commitment, Al Mubarak said in a press release. “Abu Dhabi is open, ambitious, and unwavering in its direction,” he added.

Some experts agree that the conflict is unlikely to have long-term impacts on Abu Dhabi’s quest to attract tourists.

“It’s a long game for the UAE and other Middle Eastern destinations,” Nancy Gard McGehee, professor of hospitality and tourism management at Virginia Tech, told CNN. “They are a wealthy country and have a sophisticated tourism planning strategy.”

In 2024, the Abu Dhabi Tourism Strategy 2030 was launched, laying out billions of dollars of spending on infrastructure and other initiatives, including marketing.

Work on other major attractions appears to be continuing. The Guggenheim in the Saadiyat Island Cultural District is “still on a path to open at the end of this year,” Al Mubarak told Anderson.

In May 2025, Disney announced a new theme park in Abu Dhabi. “The strategic logic of our Abu Dhabi plans is unchanged,” Disney said in an earnings report earlier this month.

“We are long-term thinkers,” Al Mubarak told Anderson. “Like any strategy, you’re always going to have some roadblocks.”

Amy Gunia, CNN