Gulf Hotel Investment Enters Pause Mode as Iran War Clouds Pipeline

Hotel investment activity across the Gulf has entered a cautious holding pattern since the Iran war began, with one analyst warning that hotel valuations in the UAE could soften by 20% to 25% if conditions persist.

“If the war extends through the remainder of the year, valuations could soften, driven by reduced investor sentiment, softer demand outlook, and potential compression in operating performance,” said Hala Matar Choufany, president for the Middle East, Africa and South Asia at consulting firm HVS.

The disruption arrived late in the first quarter, meaning its full impact on project delays, cancellations, and financing withdrawals had yet to fully materialize by quarter close, according to JP Ford, senior vice president and director of global business development at Lodging Econometrics. 

The Gulf pipeline declined by nine projects and 1,365 rooms from the prior quarter — a 2% drop by projects and