North Africa Tourism Surges as Iran Conflict Hits Gulf Destinations

Tourists fleeing the Gulf region due to the Iran-Israel conflict have redirected to North African destinations, boosting the hospitality industry in Morocco, Tunisia, and Egypt, according to analysis from May 4, 2026. Hotel occupancy rates and revenue metrics in North Africa have risen sharply, while Gulf tourism has collapsed following Iranian retaliation against U.S.-Israeli operations.

Gulf Tourism Collapse

Iranian retaliation against the U.S.-Israeli offensive struck Gulf states with drone and missile strikes, most of which were intercepted. However, falling debris damaged military and civilian infrastructure, closed regional air spaces, and triggered safety concerns that have deterred travelers.

Dubai experienced the most dramatic decline. Hotel occupancy in Dubai dropped to 33 percent in March 2026, compared with an annual average of 81 percent for 2025, according to data from the Dubai Department for Economy and Tourism cited by real estate data company CoStar.

Roberto Cardarelli, an International Monetary Fund official, noted in mid-April that “hotel occupancy rates in the last week of March were ‘incredibly lower in the Gulf’ over the same time in 2025, but higher in Morocco, Algeria, Tunisia and other North African countries.”

North African Gains

Revenue per available room (RevPAR)—a key hospitality metric—rose between 20 and 50 percent in Marrakesh, Agadir on Morocco’s Atlantic coast, and the Egyptian resort of Sharm El Sheikh, according to preliminary figures from hospitality consultancy HVS.

Tunisia experienced the fastest improvement in March, typically a slow month. Occupancy in Tunis jumped from just over 16 percent in March 2025 to nearly 32 percent in March 2026, with RevPAR more than doubling.

Sharm El Sheikh reached nearly 83 percent occupancy in March 2026, while Marrakech approached 90 percent occupancy in the first half of April, according to HVS data. These figures drove double-digit growth in average daily rates, signaling stretched supply.

Hala Matar Choufany, HVS president for the Middle East and Africa, attributed the shift to “genuine demand rather than distressed fill” through discounts. “It looks like it moved fast, within weeks of the conflict intensifying, which is consistent with what we see when there is a sudden shock to travel confidence in a competing corridor,” she said.

Morocco has experienced increasing arrivals, overnight stays, and occupancy rates for months, with levels surpassing pre-pandemic norms, according to Aida Berrada, Morocco director for real estate company Colliers. Economic stability, the hosting of the 2030 FIFA World Cup, new tourism attractions, renovations, and “a substantial pipeline of future hotel supply” are supporting increased demand, she said.

Capacity Constraints and Future Outlook

Despite gains, North Africa faces capacity limitations. The Gulf still maintains significantly more branded hotel capacity: Dubai alone has nearly 160,000 hotel keys, Doha has more than 38,000 keys, while Cairo has fewer than 29,000 keys. In 2022, the UAE was expected to have 122,000 keys total, while Egypt was slated to reach 92,000 keys.

Choufany cautioned that physical capacity in countries such as Egypt and Morocco may put a ceiling on further growth. Tunisia, with hotels still barely a third full, has the most potential for expansion, provided it addresses air connectivity and security perception issues, she added.

North Africa cannot match the scale of the Gulf’s highest-end offering and has not attracted the corporate and event-related visitors that have paused trips and cancelled events in the Gulf. “The region can capture leisure displacement well,” Choufany said. “Capturing the full business travel and events segment would require a different conversation about the product offering entirely.”

For Dubai, recovery to pre-war tourism levels may take two to three years, with domestic and regional demand expected to pick up before international arrivals return, according to Choufany. The UAE, Qatar, and other GCC members retain capacity to receive visitors, especially luxury and corporate travelers, but will require time to recover from the current downturn, sector experts said.