Tourism suffers, government yet to act
Beirut - Lebanese tourism operators have called on the government to end its political paralysis, reconvene the cabinet and award tax cuts to the sector, which has been badly hurt since fewer rich Gulf Arabs are visiting due to the war in neighbouring Syria.
Lebanon’s government, made up of rival factions backed by the competing sides supporting opposite groups in Syria, has failed to make even basic decisions since it was formed in 2014. Anger at the impasse has boiled over into sometimes violent demonstrations.
The tourism sector asked government officials to grant tax breaks to help it through the crisis but parliament and cabinet meetings are on hold until further notice.
“In the name of tourism, hotel and restaurant owners, nightclubs, travel agencies and car-rental companies, I call on politicians to end their indifference and laxity about the fate of companies and the future of our youths,” Pierre Ashkar, the head of Hotel Owners Association, said at a news conference.
Hundreds of restaurants have closed and hundreds of others are planning to shutter soon, especially in Beirut’s upmarket downtown area, he said. Most hotels have blocked off half of their rooms and more than 100 car rental firms have gone out of business. Ashkar is planning to shut down — partially or completely — his Markazia Hotel in downtown by the end of the year.
The tourism sector has shed as many as 100,000 jobs, losing its best workers to better markets in Arab, European and African countries, as well as Iran, which hopes for increased tourist numbers after international sanctions are lifted as part of its nuclear agreement with world powers.
The Hotel Owners Association does not expect the Lebanese government to respond to Ashkar’s call for tax breaks, an association official told The Arab Weekly. “The cabinet is incapable of meeting to solve the nationwide garbage problem. Do you expect it to meet and decide on tax breaks for us?” the official asked.
A Finance Ministry official also was sceptical of the government’s ability to act, pointing out that parliament had failed to elect a new president 30 times due to lack of a quorum. Parliament has extended its tenure twice since it failed to pass a law to govern general elections, which were due in 2009. The cabinet is in paralysis because its 24 ministers have failed to agree on how it should operate in the absence of a president.
The Market and Economic Research Division at Bankmed, a private Lebanese bank, estimated in a recent study that tourism’s contribution to the country’s gross domestic product (GDP) fell from 29% in 2010 to 19% in 2013 before recovering somewhat to 21% in 2014.
“As the tourism sector was severely affected by the domestic and regional instability, total employment in tourism dropped by a steep 20.9% to reach 225,000 employees [over the same period],” it said.
The total number of tourists slid from 2.1 million in 2010 to 524,000 in the first five months of 2015. Tellingly, the report cited a fall in the number of Arab tourists from 895,000 in 2010 to 179,000 in the first five months of 2015.
Arab tourists visiting Lebanon, who mainly come from the Gulf, “preferred coming in their cars via Syria”, a travel agent said. “With Syria at war since 2011, it is normal to see their numbers shrink. If Gulf Arabs have to travel by plane for summer vacation, they would go to Turkey or Eastern European destinations.”
Security concerns have been detrimental to the sector as Gulf Arab states have at times banned their citizens travelling to Lebanon or warned against it. Central to such decisions is the involvement of Iranian-backed Hezbollah in the Syrian war and accusations of it meddling in the affairs of Bahrain and Yemen.
Nevertheless, there are government and private initiatives to boost tourist numbers. For example, Fransabank, a Lebanese private bank, has tried to encourage Chinese tourists to visit the country. Under the auspices of Tourism Minister Michel Pharaon, the bank hosted Chinese travel agencies for a week-long tour in October, hoping that Chinese tourists would follow.
Lebanese Health Minister Wael Abu Faour voiced optimism in June about medical tourism, estimating its annual revenues at $7 billion.
“Most visitors who come here for treatment are natives of troubled countries in the region, such as Syria, Iraq, Yemen and Libya,” a source in the sector said. “But the problem is that this kind of tourism relies on well-off people — the poor cannot make it and the rich go to Europe. Also, it can decline sharply once conditions in source countries improve.”
Full economic reliance on tourism is eyed with caution by some economists.
“You cannot rely heavily on tourism when it comes to sustainable economic growth,” said a Beirut-based economist with an international organisation. “Tourism didn’t save Greece from trouble, for example.
“If the government in Lebanon is paralysed, banks can encourage productive sectors — agriculture, industry — with soft loans. This would be wise in the long term because you would have something to export when tourism is suffering.”