This time of year typically signals one thing: Art Dubai.
With the onset of the Iran war, Dubai’s art ecosystem is facing a stress test. At its heart is Alserkal Avenue, a leading collaborator of the Dubai arts and culture scene is facing this head on.
SMEs are now navigating a mix of falling footfall, disrupted supply chains, and a sudden collapse of international mobility yet organisers remain upbeat as Art Dubai’s schedule shifts to May.
For many, the immediate impact has been operational. Exhibitions have been delayed or extended, shipments stalled, and visitor patterns reshaped. Yet beneath these surface shocks lies a deeper issue: uncertainty.
For now, cuts to wages, layoffs, and forced leave are being kept aside as Alserkal Avenue’s SMEs find ways to break even. The impact is uneven across sectors but each SME is finding its own way of renegotiating cost structures, adjusting price structures, and reducing overhead costs as the ceasefire holds.
Psychology of Collecting
The crisis is affecting the creative industry on a sectoral basis even within the art world.
For gallerists, the effects are less about footfall but more about uncertainty and the psychology of collecting. Collectors, who acquire art as a store of value, often invest when confidence is high where the propensity to spend is higher, even with UHNWIs, when demand for high value assets like artworks is price inelastic.
Yet many of these UHNWIs departed the Gulf during the outbreak of war, with access and mobility granting UHNWIs the luxury of relocating to alternative residencies, on a temporary basis.
Yasmin Atassi, Director of Green Art Gallery, spoke of several shipments stranded in Doha and even Madrid, as dealers were unable to ship cargo by air or sea, citing essential shipments given the reduced air cargo volumes. Art is unprioritised throughout air travel, compared to other life saving equipment as air travel continues to operate at a reduced schedule despite the ceasefire.
Dubai International Airport is operating at 70% capacity until 31 May 2026, with limits on foreign carriers.
Different Revenue Base
Unlike F&B, the main sources of revenue for gallery owners comes from art exhibitions and collector sales.
Atassi said that revenue is highly affected by “psychological” and “economic uncertainty.”
In fact, a recent exhibition was extended due to the crisis where turnout remained low except for weekends when art enthusiasts attend. March was an indeed “shock month” for her gallery.
Yet April will be a litmus test to understand how visitors and buyers adapt to the ‘new normal.’ Much will depend on the status of maritime shipping via Hormuz and the medium-term outlook for the resumption of art fairs in Q4 of FY26.
Art Dubai’s resumption is likely to shore up support for Alserkal Avenue’s art industry however for gallerists, who rely on international exhibitors and shipping, delays will go into Q4 when events generally resume in the Gulf.
For Atassi, the gallery is proceeding with an exhibition in the immediate term – using accessible pricing points – whilst looking at renegotiating supplier contracts to manage costs.
Community Collaboration
Others in the space are embracing collaboration with the authorities as the go-to.
Community art spaces, more attuned to footfall and corporate investments, are adapting subtly. Hetal Pawani, Director of The Jam Jar Dubai, spoke about her conversations with Dubai Culture & Arts Authority, citing their mutual relationship as a supportive pillar for her business at Alserkal.
Visual arts are the main focus, making the firm sensitive to footfall: a core driver of revenue for the firm. Pawani described the Authority as “family,” reflecting on their help to support SMEs in Alserkal.
The space faces the courtyard first founded by Dariush Zandi, the Emirati local planner, dedicated to Alserkal upon its founding in 2007 under Emirati business mogul and patron Abdelmonem Bin Eisa Alserkal.
“We are pulling everything from the hat,” said Pawani. Footfall is dominated by the expat population, local Emiratis, and of course tourists.
Tourists to Locals
Similarly, design studios are facing a shortfall in footfall although long-term supply chain networks are disrupting business operations.
“We were experiencing a lower footfall from the beginning: the first week or two was pretty low… there was Ramadan and then the war,” Tamer Khatib, the son of Nada Debs, founder of the Beirut-based design studio Nada Debs told Finance Middle East at the Avenue.
Since late March to early April, business has however “picked up” but the demographics have shifted from tourists to locals.
Like gallerists at Green Art Gallery, demand is concentrated amongst international buyers. Whilst high end luxury is highly price inelastic, demand for high end SME designs is holding relatively firm despite the disruption to global trade.
Add to this the logistical difficulties of exporting out of Lebanon, given the ongoing conflict, and exporting manufactured goods becomes highly difficult owing to supply-side risk: physical damage, hence high insurance premiums.
“Beirut is much worse than here… shipping is much more expensive, importing, and all of our wood is imported,” said Khatib.
Whilst prices haven’t increased yet, across current stock in Dubai, exports out of Lebanon may face price increases since custom pieces are designed and exported from the country.
Shipping quotations are changing “every five days,” said.
For high-end SMEs, the challenge is huge as custom pieces are often bought by a network of global buyers who require export and safe passage.
“A customer has to put a 50% down payment when they’re placing an order, they don’t know if they will be able to ship it, when the production is done in two months.”
Learning from Prior Crises
On contingency planning, the firm is implementing the lessons learnt in prior conflicts. “What we do in Lebanon… is sometimes we force employees take their annual leave just because there is a lack of orders” and a “lack of design work.”
Yet for high-end luxury, the economy is turning inwards as the remnants of any ‘hot war’ is eclipsed by local activity. “It’s picked up quite a bit for the UAE residents because a lot of them are coming and asking for gifting items… as people are starting to invite people over, again.
Funding Rounds & Local Supply Chains
This pivot toward local demand is becoming a defining theme across sectors.
However, SME expansion pre-war and local supply chains are helping to mitigate against the negative externalities of the war.
For local SMEs, like Fikry Boutros, Cofounder and CEO of CarniStore, the impact on e-commerce was substantial with customers “panic buying” but this boost to online sales eased as the war went on.
By March, daily sales were down 25-30% on B2C whilst B2B, including high-end premium hotels, restaurants, and cafes, saw a 45% daily hit to average sales on the average month.
Fine dining is of course “based on tourists,” he said.
Yet pivoting fast in F&B is keen, citing Moonrise Chef Solemann Haddad in Dubai. Instead of waiting for cancellations, Solemann and Boutros worked together to roll out an accessible eat out – charging a dry aged burger, part of a four-course meal, for just Dh 200.
Solemann often charges “thousand plus” per person at Moonrise, whilst the butcher only serves specific restaurants at high end hotels such as the Waldorf Astoria.
Sourcing Local
Others are leaning on structural advantages.
Sourcing local and priming the business for upscaling also helped buffer SMEs from taking contingency measures, such as salary cuts and forced leave.
90% of the firm’s poultry is sourced locally whilst just 10% is sourced from France as the transportation of beef – via air cargo – remains largely unaffected despite higher costs.
For the firm, high premium beef is shipped via air from Argentina, the UK, Russia, and Australia whereas mid-range beef is shipped via sea.
“The lower price products that depend on sea, this is where people will feel it the most: is it the people with less spending power.”
For the business owner, the use of air freight is also about trade-offs, choosing to absorb costs when applicable. The firm continues to hire citing its commitment to those who were hired pre-conflict.
Funding Round
“The good thing is that we [had] some runway because we just closed funding.”
We raised AED 45M (approximately $12.25M) with Emirates Growth Fund to grow the firm and it closed the first week after the war.
“It has been in the works for six months and whilst it was 99.9%… and I called them to ask it’s okay if you want to put things on hold for a little bit… they said “the business is in a good position… this is our mandate as we are looking for homegrown food security, growing national champions.”
At home, the supply chain is benefitting some whilst others are affected.
For Boutros, priming the business for local growth, through local capital and local supply chains is helping support the firm with the necessary business decisions that put the firm in a strong position should another external shock reoccur.
Sectoral Differences
Sectors, like healthcare, are largely unaffected because of everyday “utilisation.”
“People realise they still need to fix their back pain, and they still need to have whatever treatments,” so people still came, said Kris Rai, Clinical Director & Co-founder of The Joint Space.
Yet the firm saw a 25-30% drop in footfall between the 28 February and end of March, fairing a lot better than other firms in the Avenue.
Rai admitted that it is “tolerable for us, it is not awful,” citing the total overhead costs of 40 staff compared to large hospitals and medical clinics.
“It gives us a little bit more resilience,” he said.
Alserkal Avenue Measures
Across Alserkal Avenue, the priority is survival without drastic cuts. Wage reductions and layoffs remain largely avoided, for now, as SMEs focus on breaking even through cost control, renegotiation, and strategic pivots.
Behind the scenes, the institution has stepped in. A four-week artist residency has already been announced, while sources hint at further announcements citing other measures to support the creative industry.
As Art Dubai shifts to May, the district is attempting to reframe the moment as a reset.
Initiatives like a month-long “art season” aim to revive momentum and reconnect audiences.
“If it’s music, if it’s design, if it’s retail or art, whatever it is, these are for freelancers and I mean really any community,” said the Director of Alserkal Avenue: Basmah El Bittar.
Yet the broader trajectory remains uncertain. Much depends on the return of international collectors, the normalisation of shipping routes, and the resumption of global art fairs later in the year.
Until then, Alserkal Avenue’s SMEs are doing what they can to hold the line—adapting in real time to a crisis that is reshaping not just operations, but the very structure of Dubai’s creative economy.
Across all these sectors, each SME is facing unique financial challenges of their own and are finding ways to break even. Pivoting on strategy, turning to local demand, or priming the business for scale are all strategies – SMEs take every day – but show their true function in breaking even when any crisis hits.
“We can’t stand still,” is not just the message of Basmah El Bittar but of the SMEs navigating this crisis.
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