An Exodus of Expatriates from Dubai: A Reality Check for the ‘Dubai Dream’

 The joint American-Israeli attacks on Iran on 28 February 2026 have had wide-ranging implications for the Persian Gulf region. Dubai, once regarded as a ‘safe enclave’ in the Middle East, was subjected to furious retaliation shortly after Operation ‘Epic Fury’ began, when Fairmont The Palm, a five-star hotel on Palm Jumeirah Island; Burj al Arab (Tower of the Arabs), an iconic, sail-shaped, seven-star, 163-floor hotel- the world’s tallest building at 2, 717 feet; and Dubai International Airport came under fire from Iranian drones and missiles. Subsequent targets have included the Jebel Ali Port and other civilian infrastructure.  An inevitable exodus of expatriates from Dubai gathered momentum. Before long, there was a scramble for one-way airline tickets, and evacuation flights were oversubscribed, while the ultra-wealthy made their own way on private jets.

 Tourism has been particularly hard hit, just as Dubai was beginning to lose its allure for visitors. High hotel costs, competition from more affordable luxury destinations, a growing disenchantment with manufactured attractions, the lack of an authentic cultural experience, and rising awareness of local environmental degradation have kept some potential visitors away. Since hostilities began, tourists have been stranded in Dubai, hotel occupancy rates have plummeted, and short-term vacation rentals cancelled, while planes, mega yachts and cruise liners have been left stranded. Eid celebrations, which normally attract high spenders from the neighbouring Gulf states, have been cancelled. Hospitality staff have been placed on extended unpaid leave. Some anecdotes even suggest the makings of a “ghost city”, with deserted roads, shopping malls, restaurants, and beaches.

 Strict censorship has, however, made it difficult to obtain a reliable picture of the situation within Dubai. Cybercrime laws that prohibit the publishing or sharing of material that threaten public security have been used to suppress the photographing, sharing, or posting of images and videos that show the impact of Iranian missiles. Some have been arrested by the authoritarian regime for their ‘crimes.’ Meanwhile, assorted social media influencers have been accused of ignoring the reality on the ground and presenting a rosier picture of Dubai for their viewers.

Dubai, one of seven sheikhdoms that formed the United Arab Emirates (UAE) on 2 December 1971, has come a long way from its modest origins as a pearl-diving settlement straddling the Dubai Creek- a natural inlet in the south-eastern coast of the Persian Gulf. The discovery of oil in the offshore Fateh field in 1966 triggered rapid urbanisation and an economic boom, transforming Dubai into a global financial, commercial, logistics, and transportation hub; the most populous city in the UEA; and the megalopolis of the Middle East. Within no time, Dubai was to become a city of superlatives-home to the world’s largest shopping mall (Dubai Mall), man-made archipelago (World Islands), man-made harbour (Jebel Ali Port), and theme park, not to mention the world’s tallest building and its busiest international airport, among other achievements.

 Dubai’s economy is considerably diversified. Oil production accounts for less than 1% of GDP, while trade, financial services (Dubai International Financial Centre), IT, tourism, and real estate have come to dominate the economy. As Emiratis account for a mere 10% of the population, which includes 240,000 British residents, Dubai’s rapid transformation has, of necessity, been driven by the unrelenting toil of a ‘silent army of’ low-paid migrant workers from South Asia (India, Pakistan, Bangladesh, Sri Lanka) and East Asia (Philippines), who are engaged in the construction, logistics, hospitality, and transport sectors and as domestic helpers and care providers. Concerns over their ill- treatment at the hands of employers, their poor living conditions in shared accommodation, hidden away from the glitz and glamour of the metropolis, and unjust sponsorship schemes, which allow their passports to be confiscated (kafala system) and make them vulnerable to wage theft, have attracted the attentions of human rights campaigners.

 Dubai’s status as a tax haven (no income tax, capital gains tax, property tax, or inheritance tax) and as a hub for money laundering have proved to be a magnet for the wealthy and others with an appreciable disposable income, including entertainers, sporting elites, reality TV stars, and social media influencers. As of 2025, Dubai boasted 9,800 millionaires, who shared between them $63 billion in wealth. Year-round sunshine, alluring beaches, luxurious residential properties (apartments, villas), mega shopping malls, five-star hotels, Michelin- starred restaurants, high-end clubs, a world-class transport infrastructure, a high standard of schools and hospitals, and enviable recreational facilities have attracted ten-year UAE Golden Visa holders, drawn from the ranks of investors, entrepreneurs, and talented individuals, creating a bubble within which moneyed elites can enjoy their lives. Visitors seeking a taste of the action have also been tempted to visit and sample the attractions of this ‘playground for the rich.’ Despite the overwhelming numbers of expatriates, only a tiny minority will ever achieve Emirati citizenship, which is largely restricted to native-born residents.

 For many hopefuls, the ‘Dubai Dream’ is fast evaporating. The ‘City of Gold’ is beginning to lose its lustre. The benefits of tax-free living have been offset by rising rents, high international school fees, and high premiums for compulsory health insurance, disincentivising middle-class professionals, such as nurses, teachers, and the like. This cost-of-living crisis does not affect Emiratis, whose privileged status entitles them to free land, free education, free healthcare, and subsidised food and petroleum. A constant trickle of departures has turned into a stream, as the current instability in the Middle East exposes the geopolitical vulnerability of the Gulf States. The property bubble has burst, with real estate valuations down by as much as 25%.

  Dubai has proved resilient in the past, including after the global financial crisis of 2008 and the floods of April 2024. It has the potential to outlive the short-term shock of the ongoing war.  But more recent events have dented its image. The manufactured city, a soulless concrete jungle of ultramodern skyscrapers, and mega- freeways and flyovers, built on sand and reclaimed land, can expect some short-term challenges as international confidence in Dubai takes a hit. On the other hand, the Dubai 2040 Urban Master Plan, which “maps out a comprehensive plan for a sustainable urban development in Dubai”, still holds some promise for the future.

Ashis Banerjee