The Dubai Riviera has been reduced to a millionaire ghost town... but amid the empty restaurants, abandoned supercars and echoey champagne brunches, smart investors are already swooping in. Here's why

Published: 01:00, 2 June 2026 | Updated: 01:00, 2 June 2026 For years, Dubai has offered Britain’s weary middle classes the ultimate escape package: no tax; no drizzle; and no decline. It was the glittering Gulf bolthole where go-getters could flee the national malaise for rooftop infinity pools, champagne brunches and a taste of the high life. So, for a place which forged its reputation on being richer and shinier than anywhere else, there is perhaps no greater embarrassment than being accused of looking, well, cheap. Yet that is the awkward charge now hanging over the United Arab Emirates’ (UAE) great showroom of excess after the Iran war blew a hole in its must-visit reputation. While a number of expat Britons and other long-term residents have returned to the tax-free land, popular landmarks, hotels and restaurants have failed to recapture the huge international footfall that once turned sandy paths into streets paved with gold. At the plush J1 Beach in La Mer – billed as Dubai’s answer to Cannes and St Tropez – the signs of struggle are hard to miss. Before Iranian missiles and drones began bombarding the UAE in late February, the strip of high-end restaurants and glitzy beach clubs was a daily who’s-who of the emirate’s rich and famous. Entry to its most fashionable venues on the so-called ‘Dubai Riviera’ was impossible without reservations made weeks – even months – in advance. Dubai was the glittering Gulf bolthole where go-getters could flee the national malaise for a taste of the high life (pictured: Dubai's Marina Beach before the war) Now popular landmarks, hotels and restaurants have failed to recapture the huge international footfall that once turned sandy paths into streets paved with gold Today, however, some of those same venues are offering free entry, heavy discounts and complimentary tables. One Dubai influencer told the Mail: ‘In La Mer’s J1 area, all the beach clubs and venues have special offers, free entry for ladies and fully redeemable entry charges for men. ‘You can feel they’re struggling and it will get worse as summer starts. These are places which you couldn’t even get into.’ J1 Beach is home to Dubai’s most expensive fish restaurant, Sakhalin, where even the wealthiest and most influential diners must book weeks in advance to avoid disappointment. Clients can expect to pay £180 per person, but will be served the finest lobster, crab and crustaceans flown in from the seas off eastern Siberia. Fresh fish come in all different shapes and sizes, from river pike to a whole turbot for £40. The cheapest bottle of white wine, a Vinho Verde from Portugal, costs £100; the most expensive, a Montrachet Grand Cru from Burgundy, costs £4,700. Now, however, the Iran war has left Sakhalin empty. When the Mail visited this week, just one table was occupied by a Russian-speaking man and his elegant companion. The terrace was deserted, the ornate parasols fluttering pointlessly in the breeze. There were no swimmers in the sea. At the neighbouring African Queen restaurant and resort, customers are offered free sunbeds on the private beach if they promise to buy some food and drink. ‘The restaurant is not busy because of the situation,’ explained guest relations manager Michelle Sartini. ‘We are trying to do everything to get trade. ‘When the war started, it was very frightening. A lot of cities were affected a lot worse than Dubai, but no one expected there to be missiles landing here – even if it was only a few.’ Or, as a young Italian woman put it: ‘The bombing was terrifying. You could see the rockets coming across the sea at night and hear the explosions. Dubai’s most expensive fish restaurant, Sakhalin, has been left empty after the conflict began The African Queen restaurant and resort is offering customers free sunbeds on the private beach if they promise to buy some food and drink ‘No one expected this in Dubai. We all considered it to be like Europe. Now, sadly, we have been reminded it is the Middle East.’ The carefully crafted image of Dubai as the Switzerland of the Middle East was shattered by Iran’s strategic attacks, an immediate response to the raids on Tehran by the US and Israel – both allies of the UAE. Dozens of Iranian drones were sent across the narrow waterway of the Persian Gulf to wreck Washington’s pledges of security for the Gulf States. A handful got through the UAE’s expensive defensive shield. Glass-fronted skyscraper hotels were set ablaze, at least one residential block in the working class Al Satwa district was destroyed and some light industrial sites were left in ruins. The crisis in the Gulf has also pierced Dubai’s most valuable asset: confidence. About 2,800 Iranian missiles and drones have been launched towards the wider UAE in the past three months, targeting airports and civilian areas, such as hotels and residential buildings. US financial analysts Moody’s has warned that hotel occupancy in Dubai could slump to a record low of 10 per cent by July, having stood at 84.7 per cent in February. ‘This represents an effective shutdown of large parts of the hospitality sector,’ was its stark conclusion. Some of the biggest names in Dubai’s luxury hotel trade have been closing rooms or quietly shutting for renovations amid collapsing bookings. The list includes the sail-shaped Burj Al Arab, the renowned Armani Hotel Dubai and St Regis on the Palm. At the famed Atlantis The Royal on Palm Jumeirah, the atmosphere during a spot visit today was strikingly subdued. The sounds of the mother of pearl fountains overwhelmed the chatter of the few guests checking in. The cocktail and coffee bar, featuring an ivory-white grand piano, was practically deserted. Only two tables were occupied, one by a pair of scowling and bored-looking women. Underworked waiters pounced on anyone who breezed past. Outside on the terrace, with the iconic Dubai skyline behind it, every sunbed lay empty. Set on one of the reclaimed land ‘palms’ – remodelled to mimic the iconic shape – the hotel entrance offers a view straight on to the Persian Gulf, and a number of stranded oil tankers and container ships. A warship was also in plain sight. In a nearby parking garage more than a dozen luxury cars – Ferraris, Porsches, Range Rovers – stand protected by dust covers, presumably while their owners seek shelter elsewhere. With tourists in shorter supply, some of Dubai’s smartest venues are offering discounts of up to 50 per cent in an effort to tempt local residents with ‘staycation’ and WFH – ‘work from hotel’ – deals. Luxury cars have been abandoned and left underneath dust covers, presumably while their owners seek shelter elsewhere At the famed Atlantis The Royal on Palm Jumeirah, the atmosphere was strikingly subdued Guests at Ciel Dubai Marina, the world’s tallest hotel, would have had to pay around 2,006 dirhams, or £405.70, per night in December for peak luxury in a king suite. Now, the same 538 sq ft room costs 807 dirhams, or £163.61. When we visited the swanky hotel, maintenance workers appeared to outnumber guests by ten to one. The 14th floor brasserie and bar was completely silent apart from the sound of electricians crawling under cabinets. At the 11th floor poolside bar, the barman appeared to be scrubbing already sparkingly clean glasses. A solitary middle-aged European couple were his only customers – and they seemed more interested in each other than in his cocktails. Passenger traffic at Dubai’s two airports plunged by at least 2.5 million in the first quarter of 2026 compared with last year. March saw a 66 per cent drop. Short-term rentals, including Airbnb apartments, slumped by 41 per cent in April compared with the year before, too. The forecast for May is a 20.1 per cent year-on-year fall. June fares slightly better, with a less severe decline of 7.9 per cent. Bram Gallagher, of data firm AirDNA, said: ‘We haven’t seen that kind of fall in Dubai since the immediate aftermath of Covid. ‘There is some cautious optimism that by August and beyond the market could return to something closer to business as usual. ‘But that depends entirely on how long the conflict drags on. The longer it continues, the stronger the association becomes in people’s minds between Dubai and regional instability. That puts Dubai in a dangerous spot.’ The Gold Souk, the statelet’s oldest market and one of its most popular tourist destinations, is also crying out for trade. Once alive with hawkers and tourist, the covered walkway is now silent. Cats sit on the benches meant for visitors, shops are empty and their owners look inconsolable. Ben Moss, from Wandsworth, London, moved to Dubai after the pandemic and earned a living as an online influencer. However, with a dearth of tourists, businesses are not reaching out and his income has dropped. ‘My revenue normally comes from hotels and restaurants. Any firms wanting marketing will give us a call and ask me to speak about their business,’ he said. ‘Since [the war started], it has been the other way around. I am getting half as many calls, my price has reduced and I have had to approach businesses. ‘They are viewing the summer as a low period, then they are looking towards next winter.’ While many expats – including former England footballer Rio Ferdinand and his wife Kate, and ex-Apprentice star and podcaster Luisa Zissman – have returned to Dubai following brief exiles in their home country, the impact of war has left ordinary residents feeling the squeeze. With the Strait of Hormuz shut, fuel and food prices have surged. The Gold Souk, the statelet’s oldest market and one of its most popular tourist destinations, is crying out for trade British teacher Eleanor said petrol prices for her modest Fiat Uno had spiked from AED90 (£18.29) to AED140 (£28.45) to fill the tank. Eggs, bananas and bottled water have all jumped sharply in price – water by as much as 30 per cent. Traffic jams still blight the city’s six-lane highways at rush hour, but at other times of day drivers breeze through. The crisis has, however, carved open opportunities for the wealthiest. British estate agent David revealed that deep-pocketed investors are already swooping in to snap up discounted luxury properties, with prices reportedly falling by up to 15 per cent. The conflict is estimated to be costing the wider Middle East at least $600million per day in international visitor spending, according to research by the World Travel & Tourism Council. The Dubai government has stepped in with relief measures worth AED1billion – about £200million – for hotels and tourism operators. But support for businesses does not necessarily mean security for workers. Across many hotels, large portions of staff – often from the Indian sub-continent – have been placed on indefinite unpaid leave. Unwilling to lose their jobs and unable to afford the airfare home, many are effectively trapped. Rather than carry out mass layoffs, hotels are keeping workers in ‘standby’ status so they can restart quickly if demand returns. The Dubai Chronicle, a local lifestyle website, issued a defiant response to downbeat assessments from the likes of Moody’s, insisting: ‘That is not what is happening on the ground. ‘The boutiques are open. The coffee shops are full. People are paying 30 dirhams and more for a specialty coffee without pausing to think about it. ‘Families are sitting down for restaurant dinners mid-week, not just on weekends. The appetite for small, repeatable luxury stays intact because those making the purchases have disposable income and they are spending it locally. ‘When you cannot fly somewhere, you eat somewhere good instead.’ It’s true that at some glitzy hotspots, including Zuma and Iris, the city’s elite are still sipping cocktails late into the night, while trendy venues such as Be Beach bustle with partygoers. Perhaps the reality of Dubai sits somewhere between Moody’s bleak warnings and the Chronicle’s nothing-to-see-here defiance. ‘The places I go are still full and the vibe is good,’ insisted Australian banker Tracey. ‘Socially, life feels normal again. It’s business that needs time to recover.’ But with no clear end to the war in sight – and amid alarming signs it will settle into longer-term, ‘frozen’ conflict – others are more cautious. ‘One British businessman who asked not to be named told the Mail: ‘I’ve been in Dubai for ten years and I love it out here. We all hope that after the summer it will return to normal. Otherwise, frankly we’re all screwed. ‘If people don’t come back, we’re in big trouble. My life is here. My partner and I have just had a baby. ‘But to live in Dubai you need money. And if the war carries on and more people leave and those who have left don’t come back, then it’s over for us – and I should think for a lot of other people, too.’ No comments have so far been submitted. Why not be the first to send us your thoughts, or debate this issue live on our message boards. By posting your comment you agree to our house rules. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook. You can choose on each post whether you would like it to be posted to Facebook. 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