Wait or move? What the Iran conflict means for UK operators eyeing the Middle East

The outbreak of war in Iran is, first and foremost, a human and geopolitical crisis. But, economic consequences travel fast, and for UK hospitality operators, some of the effects are already visible.

Energy markets reacted almost immediately. Disrupted supply routes pushed oil prices higher, which feeds through in familiar ways: distribution costs rise, imports become more expensive, and pressure returns to the cost of goods, just as many operators were beginning to regain some control after several years of high inflation. There is a second-order effect on borrowing costs too. For a sector that relies heavily on financing, particularly for expansion, more cautious lending can slow growth significantly. So while the conflict feels geographically distant, its commercial impact is anything but.

For those with eyes on the Middle East, it is even more pressing. Expansion into the region has become increasingly common over the past five years, as operators seek higher-growth markets beyond an increasingly mature UK landscape. Dubai in particular has become a popular first international step - a combination of strong local partners, a sizeable English-speaking expatriate community, relatively familiar consumer behaviour, and a buoyant dining culture makes it more accessible for market entry than many other global cities. For many brands, it offers international credibility without the capital intensity of markets like the US.

Barrafina, DIFC, Dubai

A steady stream of UK and European brands have entered in recent years - from JKS with Berenjak to Big Mamma Group with Gloria, alongside Barrafina, Tattu, Rosa's Thai, Sexy Fish, Bread Ahead and WatchHouse Coffee. Others, including Kricket, have recently announced plans to enter - now delayed. They join earlier movers such as Pizza Express, Wagamama, Nando’s, Costa and Caffè Nero, which expanded through the 2000s and 2010s.

Now, a number of recent deals are being reconsidered, restructured or paused as operators and investors reassess risk, timing and capital allocation. The question is whether to wait, or whether to move.

Short-term visibility is limited, tourism has softened, and the biggest unknown is duration. As of mid-March, prediction markets were pricing in roughly a one-in-three chance of the conflict ending by the end of April, rising to closer to two-thirds by the end of June - hardly a definitive view. But uncertainty can also create opportunity. Competition for sites eases, landlords become more flexible, and deals that were previously out of reach come into play. For operators with a long-term view and the balance sheet to support it, periods like this can offer a more attractive entry point than more buoyant times.

The more useful question, then, is not simply whether to enter the UAE - but about timing, risk and likely speed of recovery.

The UAE's foodservice market is estimated at around £15bn (Euromonitor), with strong recent growth driven by rising tourism, increasing spend per visitor, and growing appetite for premium dining. Tourism accounts for 40% to 60% of the market according to our estimates, with Dubai welcoming close to 20 million international visitors in 2025 alone. But tourism is only part of the story. A young, affluent and fast-growing resident population, alongside corporate travel and a packed events calendar, creates a diversified demand base with more structural resilience than pure leisure destinations.

On the ground, the impact has been uneven. Tourist and footfall-heavy districts - DIFC, Downtown and the Marina - are feeling the pressure most acutely, while residential neighbourhoods are holding up better, supported by sustained local demand boosted by widespread work-from-home arrangements across many businesses. For those already operating in the region, trading continues, albeit at reduced volumes. Life in the city goes on.

To understand what comes next, it is worth looking at how tourism has historically responded to shocks of this kind. As part of our upcoming Juniper x GRIF UAE Hospitality Barometer, we analysed a range of 24 global incidents - geopolitical, security and health-related - to understand the pattern of recovery. The consistent finding is that demand reacts quickly to perceived risk, but returns quickly once that risk subsides. Where disruption is relatively short-lived - typically under six months - the overall impact is often relatively contained. Across our dataset, tourist arrivals in the year of an incident generally fell within a range of -11% to +4% between the lower and upper quartiles. The year after, that range shifted to -9% to +11%. By the second year post incident, many destinations had returned to or exceeded pre-crisis levels. By the third, growth was firmly re-established.

Travel is structurally resilient. People pause, but they rarely stop altogether. This is particularly relevant for the UAE, which sits within a four-hour flight of a third of the world's population - a geographic position that makes it uniquely well-placed to capture returning demand once conditions stabilise.

The post-pandemic recovery adds another layer of confidence. Decisive reopening, clear travel protocols, and coordinated action across government, tourism bodies and the private sector accelerated the return of international demand. Major events and sustained global marketing reinforced that momentum. There is little reason to expect a different approach this time once de-escalation is complete, assuming a relatively contained period of disruption rather than a sustained or escalating scenario.

For those already in the region, operational discipline is the immediate priority. Cash flow management, flexible labour models and tighter menu engineering all come back into focus. We have heard of operators seeking voluntary reductions in hours and pay, alongside commitments to repay those deductions once trading stabilises - a pragmatic approach to preserving both the business and the jobs it supports through a period of reduced demand.

For those considering entry, the fundamentals have not disappeared. Population growth, rising incomes, continued investment in infrastructure and tourism, and a development pipeline spanning Ras Al Khaimah, Dubai and Abu Dhabi all point in the same direction. Short-term disruption may alter the pace, but the long-term trajectory is likely to return to its baseline sooner than headlines might suggest.

The hospitality sector has navigated a great deal in recent history - a global pandemic, supply chain disruption, commodity price volatility and a sustained period of high inflation. Each time, the businesses that came out strongest were those that managed the short term without losing sight of the long term. The same applies here. While the human impact remains front of mind, the commercial question is not whether recovery will come - it is who will be best positioned to respond when it does.