Downtown blues

Business in Beirut’s Central District struggles to survive

Greg Demarque | Executive

Beirut Central District (BCD) is home to flagship stores of international high end retail brands such as Armani and Hermes; it is also where five star hotels such as The Four Seasons, Le Gray and Phoenicia are located, and where many restaurants and cafés, whether in Minet el-Hosn, Zaitunay Bay or Uruguay Street, can be found.

And yet, most of BCD has been a ghost town for the past five years, save for a few exceptional months. The inactivity has particularly affected the retail and hospitality sectors, the mainstay of the area, with few going to its restaurants, hotels and shops.

Hospitality sector figures

The footfall challenges experienced in BCD are not restricted to the hospitality sector alone, with the retail sector also suffering.

In fact, the entire hospitality sector in Lebanon has witnessed a drastic drop in consumers since 2010, according to Tony Ramy, president of the Syndicate of Owners of Restaurants, Cafes, Night Clubs and Patisseries in Lebanon.

The hospitality sector, a major pillar of the Lebanese economy, with sales reaching a total of $9.8 million in the year 2010, saw that figure drop to barely $4 million so far this year, according to Ramy.

Since 2006, there have been 212 closures of food and beverage (F&B) outlets in Beirut’s downtown area alone. According to Pierre Achkar, head of the Syndicate of Hotel Owners, the majority of Lebanon’s hotels are partially closed, operating at half-capacity only.

Troubling history

When it comes to BCD, the hospitality sector has had its ups and downs, Achkar explains. He goes as far back as a decade, recounting the various security incidents – from the July 2006 War to the 17.5 month long sit-in in Riad El Solh square in 2008 – to explain the factors responsible for the drastically decreased productivity in the sector.

“The problem is that typically, in lebanon, you have a bad year followed by a good year…but the situation has not improved for four years now.”

The reasons behind the turmoil in the sector, according to both Ramy and Achkar, can be summarized succinctly: The significant drop in the number of tourists visiting Lebanon ever since the war in Syria started in 2012 led to the sector’s reliance solely on people already residing in Lebanon. Lebanese citizens and residents, in turn, have themselves suffered from low purchasing power causing them to limit their outings and expenses.

Hard to bounce back

In the past, Ramy argues that the F&B industry would always bounce back as soon as security risks receded. Recent years, however, have not offered the sector any respite: “The problem is that typically, in Lebanon, you have a bad year followed by a good year or so and in that way we could always manage to sustain ourselves. But the situation has not improved for four years now, and we are entering a phase in which we will no longer be able to sustain ourselves,” explains Ramy, speaking for the sector as a whole.

Events of summer 2015

The straw that broke the proverbial camel’s back, or in this case BCD’s hospitality sector, came in the summer of 2015, when garbage began accumulating on the streets of Beirut following the closure of the Naameh landfill on July 17. As Achkar puts it: “It is hard to attract tourists to the country when they have to wade through mounds of garbage while sightseeing.”

The crisis was followed by a string of popular protests in downtown Beirut, demanding a solution to the waste management crisis. This, coupled with the heavy security that accompanies political meetings held recurrently to discuss the crisis, which also took place in BCD, led to significantly decreased footfall to both hotels and F&B outlets in the area. “We had people cancelling their reservations because why would they want to stay in downtown when they can’t get to or leave their hotel with ease?” says Achkar, adding that Markazia Monroe Suites, the downtown hotel that he operates, took the decision to close by the end of the year if the situation does not change for the better.

Meanwhile, Ramy reports that seven out of the 19 venues on Uruguay Street, Downtown’s pedestrian pub area, have had to close down since July 2015, with several other venue owners saying they will follow suite if the situation in the area does not improve.

Ramy and Achkar claim they do not blame the situation on the protesters, insisting they support their cause. They are merely against the chaos caused and damage to private property.

While both say that only long-term political stability and security will restore Lebanon as a tourism destination, they are meanwhile asking for immediate and practical solutions. For instance, they would like to see Parliament Speaker Nabih Berri call for an economic round table made up of the key businesses in the hospitality sector to reach a solution to the sector’s economic woes before it’s too late.

Nabila Rahhal

Nabila is Executive's hospitality, tourism and retail editor. She also covers other topics she's interested in such as education and mental health. Prior to joining Executive, she worked as a teacher for eight years in Beirut. Nabila holds a Masters in Educational Psychology from the American University of Beirut.

One Comment;

  1. Richard van der Graaf said:

    The absence of president.a non-functioning parlement causes instability, key factos in the administration and development of key sectors.Not to mention this is a major omission.

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