Expats said Dubai was safer than London. Then the missiles rained down

 Life in Dubai under the onslaught of Iranian missiles is subdued, but the streets are not deserted. People are milling around the city’s shopping centres, eating in restaurants and lazing on the beaches.

But beneath this semblance of normal life, cracks in the city’s economic dream are beginning to spread.

In a city on the UAE’s border with Oman, which has been the main evacuation route by air, an animal shelter has been overwhelmed by requests to look after pets as their expat owners fled the country.

The woman who runs the shelter says she received 27 requests in one day. Some people intend to return, some want their pets sent after them, and others are simply abandoning their animals.

“The problem is people are panicking,” she says.

Since the US and Israel launched strikes on Iran on Feb 28, the UAE has come under attack from more than 1,700 drones and missiles, a tally making it Iran’s biggest target in the Middle East by an order of magnitude.

More than 90pc have been intercepted and destroyed by the country’s air defences. But as the sky booms and residents receive wailing phone alerts each day, the emirate’s pitch as a low-tax, high-growth oasis of safety is being severely rattled.

Suddenly, the attractive economic policies that attracted expats and global businesses have made it a trophy target for Iran.

Barbara Leaf, the former US ambassador to the UAE, says: “Dubai is this great emblem of the alternative economic present and future for the region, the alternative certainly to Iran.

“It’s the shiny symbol of everything that is bright and modern and dynamic in the region. So it’s exactly the place they want to hit and damage the most.”

After the outbreak of war, the UAE’s economy has been hit on multiple fronts.

Holiday bookings have evaporated, Iran’s blockade of the Strait of Hormuz has curbed oil exports and growth forecasts are being cut.

All of which explains how the brand of Dubai – the UAE’s most prosperous and populous city – faces an almighty reckoning.

‘People are nervous’

An Iranian drone attack on Thursday damaged the Address Creek Harbour hotel in Dubai.

One of the pillars of the UAE’s economic success is tourism, which accounts for 13pc of its GDP. The war has thrown the industry into chaos.

More than 40,000 flights have been cancelled across the Middle East since the conflict began, leaving hundreds of thousands of passengers scrambling to find alternative routes.

Dubai, the world’s busiest airport for international flights, has been at the epicentre.

The UAE has been covering hotel bills for affected passengers, and its flagship carrier, Emirates, is operating a reduced flight schedule.

But many fear there will be no holidaymakers for some time.

Ibrahim Khaled, head of marketing at the Middle East Travel Alliance, which oversees logistics for around 20,000 tourists a year, primarily from the US and UK, says: “Since the beginning of the conflict, we have seen 100pc cancellation of all future bookings to the region.”

Muslim Kanji, the chairman of Cruxton Travel, a UK-based holiday agent, adds: “People are nervous. I even have someone who wants to go to Singapore, and he’s asking, ‘Am I going to be safe?’”

The cancellations may be damaging, but Khaled says the situation is not lost entirely.

If the conflict ends soon, he hopes bookings will return to normal within six months.

Ryan Bohl, an analyst at risk intelligence agency RANE Network, also predicts that if damage is limited and the conflict is short, tourists will respond in a similar way to a terrorist attack in a major city.

“People will stay away, and then they will make an assumption that that was a one-off,” he says.

But everything hinges on the continued effectiveness of the UAE’s air defences.

“If an airliner goes down, if a desalination plant is destroyed and there’s a water crisis, if these sorts of things become part of an extended narrative of the Emirates, it will be harder and more expensive for them to rebuild the tourist sector,” says Bohl.

End of the expat gravy train?

The possibility of these scenarios matters even more for the expats who make up 90pc of Dubai’s four million residents, who have driven a breathtaking period of growth.

In the decade to 2025, Dubai’s population nearly doubled, driving a boom in development and soaring property prices.

Between 2022 and 2025, real estate values jumped by 60pc and the population was forecast to surpass five million by 2030. Now, the war in Iran threatens this gravy train.

Kanji is working with 15 families, based primarily in Dubai, who are preparing to leave the Middle East because of the conflict.

He highlights how one family saw a tower struck by a missile from their own apartment on the second day of the conflict.

The family subsequently packed their bags and drove immediately to Muscat, Oman. Now, they are on their way back to Europe.

“This is a guy who has been so prominent on LinkedIn, loudly telling people that the UK is not a place to live because there is so much crime,” says Kanji.

Many young professionals are staying put, but families with children are nervous.

“There is a lot of self-evaluation going on. People are asking themselves ‘What am I here for?’” says Kanji.

Many Dubai residents find it easy to answer that question.

Justin Harper, a British expat who has lived in Dubai for four years and is editor of CEO Middle East, a business magazine, says: “Dubai has seen massive growth in recent years thanks to its lifestyle, zero taxes, weather and beaches and business-friendly environment.

“That hasn’t changed. This current Iran conflict is seen as a temporary disruption in an otherwise positive success story.”

Few analysts are expecting a exodus. But the flow of new arrivals could easily slow.

Iain Tait, head of the private investment office at W1M wealth management, notes a client in his 50s who was planning to leave the UK and move with his two children to Dubai this summer.

“The gentleman runs a successful business that he was hoping to sell while being a non-UK resident,” says Tait. “It’s tax-driven, it’s lifestyle-driven, and it’s a bit about escaping the quagmire of UK low growth and low zest for entrepreneurial ambition.”

The family have completed their visa applications and even bought a £3m home off-plan.

But now the move is on ice.

“The vase is cracked a bit, right? The illusion of this being a very, very safe place will suffer a hangover for some time for people who were thinking of heading out,” says Tait.

The future of Dubai is about much more than what British people feel.

While the number of UK nationals living in Dubai has roughly doubled since the pandemic, hitting 240,000, they are still only a fraction of the population. Across the UAE, there are 4.5 million Indians and 2.5 million Pakistanis.

These demographics are illustrated in the casualty figures. Iranian strikes have so far killed six people, including Emirati, Pakistani, Nepalese and Bangladeshi nationals, leaving 122 wounded. The official wounded lists mention no Europeans, but have included Emiratis, Egyptians, Ethiopians and Filipinos.

Many of these workers believe Dubai still offers a level of safety and money they could only hope for back home.

Bilal Khan has Indian and Omani parents and lived in the UK and Australia before moving to Dubai. He says he had no intention of leaving his job as a driver.

“I talked about it with my wife the other night and we decided the worst day in Dubai is still better than the best day in Europe.”