Dubai chefs and restaurateurs say they are adjusting operations after a sharp deterioration in regional shipping and air freight conditions linked to the conflict with Iran made imported perishables more costly and difficult to obtain.
At Lila Molino, a Mexican restaurant in Dubai’s Alserkal Avenue, chef Shaw Lash now imports avocados and tomatillos by air to supply the vibrant, spicy dishes that depend on those ingredients. Lash described stepping back production, trimming payroll, and purchasing smaller ingredient quantities as short-term measures to weather the disruption. She has also placed greater emphasis on make-at-home fajita kits and a grocery line as demand shifts.
“Cargo has gotten more expensive, gas prices have gone up, the Strait of Hormuz is still blocked,” Lash said, noting that the combination of constrained sea routes and rising jet fuel prices is complicating supply chains for imported produce and seafood.
Supply route closures and higher jet fuel costs
Industry participants pointed to the effective closure of the Strait of Hormuz as a critical factor. After strikes on Iran by the U.S. and Israel in late February, the Gulf experienced several weeks of missile and drone exchanges. Although a ceasefire took effect on April 8, the strait remained effectively closed to maritime traffic, restricting the primary sea access used by the UAE for most external shipments.
The UAE imports more than 80% of its food for consumption, making the country particularly exposed to any interruption of sea routes. With sea transport constrained, perishable items that previously moved by sea have been shifted to air freight, at much higher cost. Chefs report air freight costs rising by roughly 30-35% for some ingredients, with reports that air cargo rates have increased by as much as 70% on certain routes, driven in part by higher jet fuel prices.
Restaurants feeling weaker footfall and higher supplier costs
The conflict has also dented tourism flows, eroding the customer base that supports many full-service and upscale restaurants. The downturn in visitors has compounded pressure from elevated supplier bills and a more difficult operating environment for venues that rely heavily on tourists and business-district traffic.
A survey conducted by Juniper Strategy and the Global Restaurant Investment Forum between April 1-8 found UAE foodservice operators reporting an average 27% fall in demand compared with a year earlier, and supplier cost increases averaging 13%. The survey consulted 30 industry leaders who collectively operate around 400 restaurants and highlighted that tourist-exposed locations and business districts were under the greatest pressure, while residentially focused establishments showed more resilience and, in some cases, growth.
Dubai authorities have rolled out broader economic support measures, fee relief and dining campaigns aimed at encouraging patronage and helping operators navigate the current conditions. The Dubai Department of Economy and Tourism said some operators were experiencing a “period of disrupted footfall” and were implementing new formats, targeted offers and community-led initiatives to respond to the situation.
Menu changes and local sourcing
Chefs across the city report adapting menus to reduce dependence on hard-to-source imported items. Kelvin Cheung, chef at fusion restaurant Jun’s Dubai, said that sourcing certain perishable imports such as Norwegian scallops or some Japanese seafood varieties had become significantly more expensive, leaving air freight as the only viable option in many cases.
Cheung estimated that flying in those products raised costs by roughly 30-35%, prompting him to shift toward locally sourced fish and other alternatives. He has introduced a six-course menu priced at 225 dirhams, using predominantly local ingredients, and retained the restaurant’s staff. Other venues are planning discounted set-price offerings for a May Restaurant Week in an effort to stimulate demand.
Broader market context and operator responses
The full-service restaurant segment in the UAE was valued at about $9.5 billion last year by market researchers, with a pre-war forecast projecting 20% growth to roughly $11.3 billion this year. Operators and analysts caution that the current conflict and its effects on tourism, supply chains and input costs may change that outlook.
Some higher-end venues have taken different approaches to the present uncertainty. A number of fine-dining outlets in luxury hotels temporarily closed for refurbishments without attributing the work to the conflict. At the same time, new openings have continued, including an Italian restaurant that launched in early April in Dubai and another venue that opened in Abu Dhabi’s Mayfair area.
Food writer Courtney Brandt, who has worked in the region since 2007, said the conflict has intensified existing pressures such as high fixed costs, reliance on tourism and supply-chain exposure. She noted the market was already crowded prior to the hostilities and that international brands with deeper financial resources could be better positioned to withstand increased costs, although operating margins remain under strain despite local support measures.
Outlook and recent signs
Several chefs expressed cautious optimism. Cheung observed that in recent weeks, with the ceasefire and schools returning to session, business levels have shown an upward tick and overall movement across the city has improved, suggesting a gradual return toward normalcy. Lash and other operators are treating many of their temporary measures as interim steps while they monitor demand, freight costs and the status of maritime routes.
Industry participants acknowledged the uncertainty ahead and the need to make difficult operational decisions to preserve cash flow and balance sheets while seeking to maintain staff and customer offerings where possible.
(Currency note: 1 US dollar equals 3.6730 UAE dirhams.)