After five long years, it seems the dark stormy clouds of dwindling tourist figures and empty rooms have finally cleared from the sky of Lebanese tourism. 2017 was reported by those in the industry to be smooth sailing, for the most part.
There may still be some ominous weather ahead—the fallout from Prime Minister Saad Hariri’s resignation and subsequent retraction remains to be seen—but industry figures are confident the sector will continue to see gains.
A good year
Figures from the Ministry of Tourism show that 1,592,301 visitors entered Lebanon so far in 2017 (until October 2017) compared to 1,365,845 in 2012, the year tourism in Lebanon started to decline.
The boost in tourist numbers this year was reflected in the performance of Beirut’s five-star hotels, all of which reported an increase in room occupancy and revenues from 2016, along with an increase in average room rates. “We closed 2016 with 56 percent occupancy, while this year—comparing year-on-year—we’re at 73.4 percent occupancy with a 17 percent increase in average rates. So it was a fantastic year; one of the best in the last six years,” says George Ojeil, general manager of Le Gray, admitting that while 2017 was not as profitable as 2010, which he described as a “record year,” it did come close.
Maha Atieh, director of sales and events at Phoenicia Hotel, says 2017 was better than 2016 in all aspects. Occupancy grew by 23 percent from 2016, an increase she calls significant.
The Four Seasons also had a good year, with General Manager and Regional Vice President Rami Sayess saying that business significantly increased in 2017 compared to previous years. “The year was not just good—it was great. In terms of business performance, 2017 for us as Four Seasons Beirut was the best year since the hotel opened in 2010. It really showed us that this country has a lot of potential,” he says.
Kempinski Summerland Hotel & Resort also reported a successful first year of operation. “In terms of numbers and occupancy, as the first full operating year, we’re happy with our 2017 performance, despite the last two months negatively affecting our occupancy,” says Daniele Vastolo, Kempinski’s general manager. “Our business growth was very steady since the opening, and we have managed to establish, in a very short time, our place in the market, as well as gain a fair share of the business amongst our competitors.”
Why now?
Hotels’ solid performance in 2017 was the result of several factors, and if these trends continue, Lebanon will again be a viable player on the tourism map.
To begin with, the election of President Michel Aoun in October 2016 set a reassuring tone for the tourism sector. “The positive performance of the last quarter of 2016 contributed to a very strong [Q1] 2017. The fact that Lebanon was no longer on the news in a negative way—but instead positive news was being shared—really helped,” says Sayess, explaining that the image of Lebanon portrayed through the media has a significant impact on tourism.
Some hotels also had individual factors contributing to their growth in 2017. Le Gray, for example, inaugurated an expansion—which included 16 additional rooms, a new lobby lounge, a ballroom, and five conference rooms—and welcomed an increase in corporate and social events. “The demand was very good; on the rooms level the demand was very positive, and occupancy did not drop below 80 percent starting from Eid El Fitr [in June] until the first week of November. Banquet and events became busy mid-September,” says Ojeil.
It takes a village
Efforts made by the hospitality sector to diversify the Lebanese tourism market also contributed to its positive performance in 2017.
When the Gulf Cooperation Council (GCC) countries first advised their citizens not to travel to Lebanon in late 2012, the tourism sector suffered from the loss of a major market. But by mid-2015, the sector was compensating for the lack of Gulf tourists by developing alternative tourism markets for Lebanon.
One of these efforts was the Visit Lebanon Forum, held in May 2017. The business-to-business forum was organized by the Ministry of Tourism, in collaboration with members of the hospitality sector, from travel agents to hotels. The event brought 150 international tour operators, event agencies, and tourism corporations to Lebanon for the first time to network with industry specialists and see what the country had to offer.
All of the hotel representatives interviewed for the article said the forum had a positive impact on business, noting in particular a significant increase in visitors from Europe, where the invitees were from, to their properties. “I truly believe there were many people who were curious about and really wanted to come to Lebanon but were waiting for stability and to hear more about the country. So what the Ministry of Tourism did was very beneficial. Visit Lebanon 2017 was a very smart idea driven by the Minister of Tourism, which tried to do the maximum [it could] in a very short period with limited resources,” explains Sayess.
Another contributing factor was the Ministry of Foreign Affairs’ efforts in reaching out to the Lebanese diaspora through the fourth annual Lebanese Diaspora Energy conference held in Beirut in May, and the related events held worldwide in regions with a large Lebanese immigrant population. “The presence of this conference all around the world—and its annual occurrence in Lebanon—encouraged the Lebanese diaspora to come visit Lebanon and discover their roots. We’re projecting that, in 2018, this market will be a big focus for us because, while [expats and the diaspora] are surely affected by the security situation, they are not affected by political tensions or travel bans,” explains the Phoenicia’s Atieh, adding this market’s strength is that guests tend to stay for at least 10 days—often after a long flight—and usually visit with extended family, booking multiple rooms to fit all the cousins.
All hotel management interviewed said the Lebanese diaspora was a major market feeder this year. “This year we had guests from diverse markets such as the Latin American market—a purely leisure market which comes in the summer. North America and Australia were major markets as well,” says Ojeil, adding that the European market was also active this year.
Hotels played a major role in promoting Lebanon overseas as a destination, and their properties as the place to stay. Hotel representatives told Executive about their promotional efforts within their international chain or sister properties, and of their participation in global travel forums. “We have to work this way because, unfortunately, we don’t have a lot of support on the official level—many countries have representative offices all over the world, which we don’t have. So it depends on us and our connections to bring people to Lebanon,” says Atieh.
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Alternative tourism rules
The Ministry of Tourism launched a rural tourism strategy in 2015 to develop alternative forms of tourism including ecotourism, enotourism, and gastro-tourism, among others, and the influx of European visitors have been drawn to these new options. “Foreign visitors are increasingly interested in staying in rural and provincial areas, and at L’Hôte Libanais, we actively encourage them to spend part of their stay at guesthouses and boutique hotels out of Beirut,” says Orphée Haddad, founder of L’Hôte Libanais (see guesthouses box).
Beirut five-star hotels say they fully support these alternative tourism trends, explaining that any activities that promote Lebanon as a destination ultimately benefit their hotels as well. “What is important for us is to see the number of visitors to Lebanon going up; for me, the destination is more important than the hotel. The rural tourism trend is making people talk more about Lebanon, and this will help [encourage] more people to come to the country. Out of 1,000 travelers to Beirut, not everybody can afford the Four Seasons, so we just want our fair share,” explains Sayess.
Atieh notes that tourists who come for rural tourism one summer and stay in guesthouses out of Beirut, or budget hotels in Beirut, may end up choosing the Phoenicia or another hotel in Beirut for their next corporate meeting.
Work, work, work, work, work, work
The stability in Lebanon starting in late 2016 brought back markets that had been largely absent for the previous five years.
One such market is corporate travel and the meetings, incentives, conferences, and exhibitions (MICE) segment. “MICE made a good comeback this year: As a hotel of 446 rooms, we need big groups to really fill them, so it’s our traditional main feeder. Pharmaceuticals, regional banks, NGOs, and multinationals were considering Lebanon for their cycle meetings and annual client meetings. All those companies that were going to Dubai, Turkey, and Amman now want something different,” says Atieh, explaining that regional and international conferences and activity relating to oil and gas, or rebuilding Syria, were significant contributors to Phoenicia’s revenues in 2017.
Le Gray took advantage of its expansion to fully open up to the MICE segment, and Ojeil says it plans to continue doing so while going forward. Sayess also reported an increase in corporate guests, noting that “Beirut is becoming a destination,” with several weddings for regional visitors held at the hotel in 2017.
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Nothing compares to you
GCC nationals began to visit Lebanon again in 2017, and all the hotel management Executive spoke to boasted of an increase in their numbers when compared to 2016. “Regardless of the various roller-coaster events in the country, 2017 was, for us, remarkable: We hosted a wide variety of nationalities with a strong presence from GCC countries, led by Saudi Arabia,” says Kempinski’s Vastolo. Atieh says year-on-year growth from the Saudi market at Phoenicia was 164 percent, and 119 percent from the Kuwaiti market from January to October.
However, these numbers fell short of those of in 2011, before the GCC issued travel warnings for Lebanon. “In 2017, business from the Gulf wasn’t [as strong] as expected, but the European business and other markets that came to Lebanon really compensated for this. Of course, if we can have this, plus the Gulf, it’s even better,” says Sayess.
Although the Lebanese hospitality sector is moving away from its reliance on the Gulf tourism market and toward greater diversification, those in the industry say Gulf nationals will remain a main market for Lebanon. “We’re building for the Lebanese diaspora, but still they’re seasonal travelers and need long vacations to come to Lebanon, while those from the Gulf used to come every weekend to Lebanon, and we used to notice that because our occupancy rates would go up from Wednesday to Saturday and on their holidays, such as the January school break in KSA,” says Atieh.
Sayess says he has high hopes for a return to pre-2011 levels of visitors from the Gulf. “Those from the Gulf are our natural guests because of their proximity to Lebanon. Besides, language is easy for them here, and many even have homes here. They will come back; it is just a matter of when,” he explains.
As unpredictable as tourism in Lebanon
Hariri’s resignation in early November 2017, its retraction, and the subsequent fallout shook the tourism sector. The management Executive spoke to reported cancellations of corporate conferences, as well as individual and group room bookings at their hotels in the two weeks that followed his resignation.
Those interviewed say they will end 2017 on a positive note, noting that activity in December is typically fueled by locals and visiting Lebanese expats. Ojeil says Le Gray is preparing for a festive December and will be hosting international bands and events throughout the month.
What comes next is less certain. “With the new situation and the happenings in Lebanon during these last two months, the year 2018 doesn’t give us the business clarity that we wish to have in order to plan accordingly. This is why, as a hotel, when it comes to business strategy and results, we have taken a very conservative approach, with the hope that the situation in Lebanon will turn positive and help us in proper planning,” says Vastolo.
Ojeil says that with the potential absence of Gulf tourists, the hospitality sector will once again have to focus on the local market. “If we don’t have a [political agreement] soon, we must shift our focus to the local dynamics and try to generate revenue from more local corporate business, weddings, and social events,” he says, adding that Le Gray will also focus on emerging markets such as Latin America, Europe, and Russia.
Sayess also believes that focusing on the European market is an option. “It may be hard to count on the Gulf market in 2018, but if we have a repeat of 2017, where the European market was coming, we will be fine until [tourists from the Gulf] hopefully come back,” says Sayess.
Once again, the Lebanese tourism sector finds itself at the mercy of politics—and only time will tell if skies will remain blue next year.