The sustained slide of the US dollar, combined with rising tariffs and geopolitical uncertainty, is reshaping global travel flows—and the Gulf region is poised to feel the effects this summer.
As the greenback continues to weaken, with the dollar index down roughly 9% since the start of 2025, travel and tourism leaders across the Middle East are bracing for both opportunities and challenges. Analysts and executives say this currency shift, paired with US trade tensions, is already influencing tourists’ decisions—potentially benefiting inbound tourism to the UAE and affecting outbound Gulf travellers’ destinations.
Inbound Boost: Gulf Becomes a Bargain
The UAE, whose currency is pegged to the US dollar, stands to gain as the dollar’s drop improves purchasing power for key source markets. Travellers from the UK, eurozone, Russia, and India will now find their money goes further in destinations like Dubai and Abu Dhabi.
“At the moment, anyone seeking to come to Dubai and earning in currencies like the sterling or euro is getting better value,” said Paul Griffiths, CEO of Dubai Airports. “It’s all tied to the dollar’s performance. As long as the US tariff situation remains uncertain, this trend may continue.”
Also Read: New East Accelerates Growth in Saudi Arabia with New Riyadh Service Center
Daniel Richards, senior economist at Emirates NBD, noted that the stronger euro and pound are welcome news for the UAE’s tourism sector, especially after years of declining purchasing power globally. “Dubai and the wider UAE are now more affordable for many holidaymakers,” he said.
The euro has risen 9% against the dollar since March, while the British pound is up 6%, the Indian rupee by 3.5%, and the Russian ruble has regained strength. These gains translate into more spending capacity for visitors—particularly in tax-free shopping havens like Dubai.
Etihad, Rotana See Strategic Gains
Abu Dhabi-based Etihad Airways said the currency shift could open new travel corridors, especially from India to the US via the UAE. “There’s more opportunity to fly Indian tourists to the US through our hub,” said Arik De, Etihad’s chief revenue officer.
Etihad CEO Antonoaldo Neves added that while some markets may contract, others expand, creating a natural demand balance. The airline recorded 91% load factors in April, reinforcing strong travel sentiment.
At Rotana Hotels, vice chairman Selim El Zyr sees upside from Europe. “With a weaker dollar, European travellers get better bargains here in the Gulf,” he said.
Miral Group, a key developer of entertainment destinations in Abu Dhabi, is also optimistic. “Germany, the UK, Russia, China, and India are our key source markets—and a cheaper dollar may be a good indicator of stronger visitor numbers,” said CEO Mohamed Al Zaabi.
Read: Innovative Collaboration Sees Apple Partnering With Anthropic for Advanced Coding Platform
Shopping Holidays: Dubai’s Added Advantage
The dollar’s weakness may also drive outbound American travellers toward international shopping destinations. Ross Veitch, CEO of online travel company Wego, said cities like Dubai and Singapore could benefit from tariff-avoidance spending.
“Dubai offers tax-free shopping, making it attractive for American tourists looking to beat import costs,” he said. However, he warned that broader economic caution in the US could temper overall spending.
Outbound Travel Costs Rise for Gulf Tourists
While inbound travel to the UAE becomes more attractive, the same cannot be said for outbound Gulf tourists. Travel from the region to Europe has become more expensive due to the dirham’s peg to the dollar, which now has less buying power against the euro and pound.
Still, the US remains appealing for UAE visitors. “Travellers get more value for their dirham in the US now than in Europe,” Mr. Richards added.
However, the US travel market faces its own headwinds. A frostier immigration environment and escalating trade wars have made the country less appealing to many foreign tourists. “It’s damaging the appeal of the US across the board,” said Mr. Veitch.
Saudi Market Remains Steady Amid Dollar Slide
In Saudi Arabia, outbound travel remains largely unaffected. Muzzammil Ahussain, CEO of Almosafer, said there’s been no major shift in travel demand despite dollar volatility. “Certain Saudi segments still have strong ties to the US,” he said, citing students and business travellers.
For luxury tourists, currency shifts are less relevant. “These are ‘Teflon tourists’—affluent travellers who prioritize travel regardless of cost,” said Melanie de Souza, executive director at AlUla’s Royal Commission. “For them, travel isn’t optional—it’s part of their identity.”
Read More: Triumphant Victory: Labor Clinches Second Term as Australians Battle Rising Costs and Global Turmoil
Industry Monitoring Tariffs, Not Panicking
At this week’s Arabian Travel Market (ATM) in Dubai, industry leaders discussed the ripple effects of US tariffs. So far, most major players report business as usual, with a watchful eye on future developments.
Etihad’s Neves said it’s “too early to speculate” on the full tariff impact. Similarly, Emirates Airline remains bullish on 2025, expecting record results.
Start-up airline Riyadh Air is monitoring the trade fallout closely. CEO Tony Douglas said the airline is ready to take surplus Boeing planes intended for China if those orders fall through. “We’ll take the lot if they become available,” he said.
Meanwhile, Saudia continues steady operations to the US, with 20 weekly flights and strong demand from officials, executives, and students. Arved von zur Muehlen, the airline’s CCO, said capacity shifts in European carriers are a potential concern—but manageable.
On the leisure side, MSC Cruises said US bookings remain strong. “Customers are still buying. Cruise prices now offer more value than some land hotels,” said Angelo Capurro, executive director of MSC’s cruise division.
Uncertainty Prevails, But Gulf Set to Gain
As the summer travel season nears, a cheaper dollar and trade uncertainty will continue to influence where people go—and how much they spend. For the Gulf, especially the UAE, this presents a unique opportunity to capture cost-conscious travellers seeking value, while navigating outbound challenges in Europe.
Follow 10X Times for more business news.
