Lebanese hotel owners decry faltering tourism sector

More than 150,000 hotel owners, partners, employees and their families face imminent threat of hotels’ closure due to the economic crisis.
Sunday 12/01/2020
Lebanese police block a road in front of Le Gray Hotel in Beirut. (AP)
Vulnerable sector. Lebanese police block a road in front of Le Gray Hotel in Beirut. (AP)

BEIRUT - “We are struggling and trying to survive, the same as the whole country,” said Pierre Achkar, chairman of the Lebanese Federation for Tourism and president of the Hotel Owners Association, summing up the situation of the hospitality sector in Lebanon.

“Most of Lebanon’s hotels are partially closed while some have closed completely. Some hotels have taken loans with high interest rates to be able to survive. Now they reel under an accumulation of losses and are not able to pay their loans and bank dues,” Achkar said.

He said 2018 hotel revenues were “40% less than in 2009-10” and that revenues did not compensate for accumulated losses.

“We have been suffering since 2012, many years before the people revolted against the deteriorating economy. The war in Syria had tremendous repercussions on the sector. The closure of the land route through Syria deprived Lebanon of more than 350,000 overland travellers, including 200,000 Jordanians,” Achkar said.

Lebanon’s unprecedented economic and financial crisis has taken a huge toll on the hospitality sector, a mainstay of the Lebanese economy, with hundreds of restaurants closing and hotel occupancy plummeting.

Regional turmoil in addition to tense ties between Lebanon and Gulf countries that banned their nationals from visiting Lebanon in February 2016 negatively affected the business.

“For years, we have raised our voices in every forum and conference. We raised our voices with all the presidents, ministers, parliamentary blocs and every source of decision. We are revolutionaries because we insisted on continuing the mission of our ancestors and our fathers who built the tourism sector in Lebanon since the beginning of last century,” Achkar added.

The hospitality business felt the economic crunch after anti-government protests denouncing deteriorating finances and living conditions swept the country since October 7, paralysing businesses with road closures and strikes.

Achkar argued that the hospitality industry is the most vulnerable sector in Lebanon. “We are the first sector affected by political, economic and security conditions and the last sector to recover because it requires external confidence. That is why there was no significant improvement in occupancy during the festive season,” he said.

December is typically a busy month for the tourism industry because of Christmas and holiday festivities. Many expatriates who often return to Lebanon at this time of year are reluctant because of the unrest. Because of the lack of bookings, brand hotels in Lebanon, such as Sheraton and Four Seasons, have begun sending Lebanese staff members to other hotels in the region to lower expenses.

Around 500 restaurants in Lebanon have closed as of December, said Tony el-Rami, the head of the syndicate of restaurant owners. He warned that the number will grow as of the beginning of the year.

Rita Khoury, chairman of the landmark Chtaura Park Hotel in the eastern Bekaa Valley near the Syrian border, said the conflict in Syria had an extremely damaging effect on the sector.

“The inflow from Iraq, Jordan and the Gulf countries was blocked with the closure of the land route through Syria,” Khoury said. “Also, the number of Syrian businessmen who used to stay at the hotel to conclude their commercial transactions in Chtaura, where there are more than 18 banks, has become smaller.”

Khoury, who runs the hotel, a family business, said she had to close part of the hotel, cut on working hours and reduce staff salaries.

“We are at a very, very low occupancy. Out of 75 rooms, only 25 rooms are operational. We are overstretched, struggling and barely surviving. I fear that, if things did not improve, not a single hotel in Lebanon will be able to survive. We will all be forced to shut down,” Khoury said.

The climate is starkly different compared to the “golden period” of 2009-11 when the hospitality sector boomed. The number of tourists reached a record 2.16 million and revenues and turnovers soared to $9 billion, with 6,000 outlets spread across the country.

More than 150,000 hotel owners, partners, employees and their families face imminent threat of hotels’ closure due to the economic crisis.

Achkar urged banks to consider the difficult circumstances the country has been through and decrease interest rates to allow hoteliers to maintain their properties.

Khoury called on the government to exempt hoteliers from paying value added taxes and other levies and to reduce their electricity bills “at least during these very difficult times.”

Lebanon is experiencing the worst financial crisis in its recent history. Foreign currencies, notably the US dollar, have grown increasingly scarce, local banks have imposed unprecedented capital controls, exacerbating the economic condition and making it difficult for businesses to operate.