How should global luxury firms navigate a destabilized Middle East?

March 4, 2026

Aerial vista of Dubai's Palm Island, one of numerous developments across the UAE that target the wealthy and UHNW for the quality of life. Image credit: Shutterstock, Tjancy

By Mickey Alam Khan

I’m certain this issue will be raised at Luxury Roundtable’s April 15 Luxury Women Leaders Summit in New York, but what impact will the Iran War have on the luxury business’ prospects across the Middle East?

For one, the notion of the Gulf countries – United Arab Emirates, Qatar, Oman, Bahrain, Kuwait and Saudi Arabia – as safe havens for wealth and the wealthy has been dented.

Images of the Iranian missiles and drones slamming into hotels, residential neighborhoods and military bases do no favors to the region’s reputation as a secure watering hole for affluent and UHNW consumers enticed by the sun, negligible crime and low-tax environment. Add to that rising energy and insurance costs, leading to global inflation.

Protect and project
There is talk that this war will run through April’s end – unless it balloons into a full-fledged regional conflict – but the collateral damage is already inflicted.

Expect lower numbers this quarter and the next for luxury sectors such as travel and hospitality, automotive, real estate and branded residences, watches and jewelry, retail, fine dining, recreational sports, yachting, beauty and in-bound financial investments.

Longer term, even when the dust settles, regimes in this region will have to work on a reassurance campaign that their skies are as safe as the ground. Expect stronger defense ties with the United States and more military investment in protecting the borders.

Equally so, I expect influencers and celebrity spokespeople to step up their endorsements of places such as Dubai, Abu Dhabi and Doha.

We already see a social media campaign themed “I know who protects us” showing the president of the UAE striding through the Dubai Mall and drinking coffee in the deserted shopping center. The implication is clear: if the head of state is safe out and about, so are you.

I’m afraid more such confidence-building measures and stronger aerial defenses will be needed – and soon. Money is fluid and its movement quick. Capital flight to safer havens, in the short term, is a strong possibility. The U.S. dollar has already strengthened in the past few days.

Dubai skyline at night. Image credit: Shutterstock

Home run
Media reports have suggested 400,000 French people are looking to fly home, with hundreds of thousands of other Europeans looking to escape, not to mention many others from Asia Pacific, Africa and the Americas. Granted, many of them are tourists, but that itself is a major loss for inbound tourism.

Many expatriates who are based in the Gulf countries plan to sit out the war. They have established roots there – companies they lead or in which they work, home ownership, children in school and primary residency.

Economic reasons is a major pull for living in the Middle East and putting up with the heat and restrictions on certain civil liberties taken for granted in the West.

Just to give you an idea: there are 9 million Indians resident in the Gulf countries. These expats, along with their South Asian counterparts, essentially built the Gulf countries in the literal sense of building construction, retail employment and hospitality support. Their outbound remittances home yield more dollars to the Indian economy than exports from India to other markets worldwide.

Check in for checkout
So, coming back to luxury, what should leaders sitting in London, Paris, Milan, Geneva and New York do to entice the upscale foreign tourist back to the Gulf countries?

Perhaps these luxury leaders can start by reassuring their employees on the ground that they have their back and are doing everything to ensure their safety by communicating regularly with the local authorities. Employees want to know if it’s safe to go into work, be it the restaurant, store, mall, office, hotel, auto dealership or marina.

When flights resume their regular frequency, the Middle Eastern countries along with luxury brands will have to run campaigns on social media and established channels abroad to welcome tourists back. Equally important, they’ll have to pay similar attention to their domestic markets to draw locals back to product and experiences.

For those with strong relationships, now is the time for the store associates and managers at luxury brands to reach out to check how their loyal customers are doing. Every little gesture counts in this hour. Instruct the luxury brand staff to communicate with at least 10-15 clients and prospects daily – in a genuine tone. Just let the customers know you’re thinking of them.

TODAY’S WAR-TORN zones become tomorrow’s playgrounds. London, Paris and Berlin are proof of that transformation. The dust will eventually settle in the Middle East. Will old habits, travel patterns and spending behavior return to pre-war? Most likely, but restoring trust and confidence in land and brand will have to be a constant endeavor.

Join us April 15 in New York to discuss these issues among leadership themes at Luxury Roundtable’s Luxury Women Leaders Summit

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