When Allah SWT ordered His Messenger Sallallahu alihiwassalam to propagate Islam openly, he went out to the valley and ascended Mount Safa, and cried out to his people, "Oh people, come at once!" So the Quraysh gathered around him. Then he said, "If I told you all that the enemy was going to attack you in the morning, or in the evening, would you all believe me?" They replied, "Yes.'' Then he said, "Verily, I am a Warner (sent) to you all before the coming of a severe torment." (There is no deity worthy of worship but Allah, do not associate anyone unto Him, and Muhammed is the Messenger of Allah.)
And then Abu lahab said, "Have you gathered us for this? May you perish!''
And thus, Allah revealed:
تَبَّتْ يَدَآ أَبِى لَهَبٍ وَتَبَّ - مَآ أَغْنَى عَنْهُ مَالُهُ وَمَا كَسَبَ - سَيَصْلَى نَاراً ذَاتَ لَهَبٍ - وَامْرَأَتُهُ حَمَّالَةَ الْحَطَبِ - فِى جِيدِهَا حَبْلٌ مِّن مَّسَدٍ
"Perish the two hands of Abu Lahab and perish he! His wealth and his children will not benefit him! He will enter a Fire full of flames! And his wife too, who carries wood. In her neck is a twisted rope of Masad."
And this is what will happen inshAllah. During the time of the Battle of Badr, he could not take part in it against Muhammed Sallallahu alihiwassalam, along with the Quraysh, the disbelievers of that time. Sickness had taken over him, and his sickness was such that not even his children went near him, and his body became so rotten with pus and other fluid, and so his children could not benefit him at all. And when he died, his body was thrown into his grave using a stick. May Allah save us from all these punishments, aameen.
When this surah was revealed, Abu Lahab could have proven it to be wrong by accepting Islam, just to prove Allah and His Messenger wrong, and not truthful. For had he done that, then this surah would have been proven false. But Abu Lahab did not do that, and that is the Qadr (decree) of Allah Azza Wajal. He was only blinded by his hatred for Allah's Messenger and the Message of truth he brought, and this was due to his arrogance to accept the truth which was against all what he had believed and done. He feared he would lose authority and fame and name if he chose to submit to the dheen that Prophet Muhammed Sallallahu alihiwassalam had brought. And Allah chose not to give him hidaya (true guidance). True guidance is something that Allah wills, for He knows what is in the hearts of men. If one has an open heart to accept the truth with humility, then Allah blesses him with hidaya.
And Allah knows best.