Pierre Achkar

Hotel Industry leader predicts gradual recovery for the embatted tourism sector

Reading Time: 6 minutes

Pierre Achkar has his hands full. As manager of the three-and-a-half-year-old, 112-room Monroe Hotel, ravaged by the explosion that killed former Prime Minister Rafiq Hariri, he has been overseeing the hotel’s renovation, refurbishment and reopening. Wearing his hat as the head of the Lebanese Hotel Owners’ Association he must direct efforts to minimize overall hotel and tourist sector fallout from the assassination, subsequent bombings, political instability and freefall of investor and tourist confidence. And somewhere he must also find the time to keep an eye on his other concern, the Printania Hotel, in the mountain resort of Broummana. EXECUTIVE spoke to Achkar about the impact of the turbulent last three-and-a-half months on the Monroe Hotel and on the hotel and tourism sector as a whole.

Can you give a rough estimate of the cost to the hotel sector of the last three-and-a-half months?

The four hotels on the Corniche affected by the explosion lost– including direct and indirect costs – around $60 million. The big loser was the Phoenicia. Occupancy in Beirut for February-March-April should have been around 55% to 60%. A few months ago it was around 30%. We were losing a few thousand rooms per day. This translated into around half a million dollars a day in losses. And this went on for more than two months. Outside Beirut, business is more seasonal. Occupancy went down, but the original rate was not as high. Outside Beirut, we were talking about additional losses of about $100,000 a day.

What does the immediate future hold for the sector?

What happened here was a terrorist act. But these kinds of terrorist acts don’t happen only in Lebanon. They happen in New York, in Moscow, in Paris, in London, in Spain, in Taba, in Qatar, and last month in Cairo. Terrorist acts happen everywhere. And the cities in which they happen carry on. They are back on the international tourism map. We’re going to do the same. Life will continue. People will forget what happened. In time, we will have the same growth as we had before, especially in a free country with democracy, a new government and new programs.

If there is no more instability, how long will it take Lebanon to get back to where it was last summer?  

If we have smooth elections in May and there is no more instability, Lebanon’s rebirth will be in August. But the growth will be very gradual. We won’t have the same numbers of people as we had last summer. But the people who do come will go home saying Lebanon is normal again, it’s living again. And they will spur others to come back. Within the last week, we have had a lot of Saudis coming to Beirut. They’re phoning their friends and family and saying: Beirut is back. We might have a million tourists this summer, compared to more than 1,300,000 last summer. Next year, if there is continued stability, we will reach at least one-and-a-half million.

What should the hotel sector as a whole be doing to overcome what has happened?

We are studying a master plan with the Ministry of Tourism. They have a budget for this. We are also holding meetings with Bahia Hariri, to create a team that will travel throughout the Arab world promoting Lebanon. And we are discussing with the international community ways in which it could help by creating a fund with the SRI or USAID, to promote Lebanon in the Western world and to change the image of the country. The 12 big hotels in Lebanon are meeting to see what we can ask of the new government, in terms of electricity and taxes for e.g., to help our cash flow. We have discussed already with the Central Bank and the Association of Bankers subsidized loans and the possible postponement of repayments. 

How likely is it that an international fund will be set up?

No one knows. It is a political, international decision. It could be in six months or in a year. We are doing our best.

Are you optimistic that the Government will help the sector?

I am not very optimistic because this government is a very short-term government. It must oversee a political transition period complete with elections. But they are nonetheless responsible for the economy of the country. It cannot be only a political government. They must also look after the economy and the major pillar of the economy for the moment is tourism, especially since our Arab visitors are tourists and investors at the same time. They buy land and apartments, and are involved in joint ventures.

Has the group that owns the Monroe put other plans on hold?

No, a planned $35 million boutique hotel project in the Downtown area is going ahead as planned. It should be completed in three years.

Where were you at the time of the explosion?

I was just up the road from the hotel, in my car. I heard the bomb and saw the black smoke. It was so loud I thought it was a bomb from an aeroplane.

What was your immediate reaction?

I ran into the hotel and saw disaster. There was a lot of blood from people who had been cut by flying glass. My first instinct was to look for my son who I knew was in the building. When I found him I felt a little bit better. Then I managed the crisis team, stopped all the electricity, the lifts and the gas, and evacuated everyone from the hotel, all within around thirty minutes.

What was your reaction from a business perspective?

I have a certain character because I experienced a lot of problems in this country during the war. On the one hand, following the explosion I was aware that we had a big problem. On the other, my reaction was very calm. Initially, I was just looking after people. As soon as I knew that Hariri had been killed, I felt that the major problem for us was his assassination. That, I felt, was even more of a blow than the damage to the hotel. Inside the hotel, there had been no real calamity, no one had been killed, so this made me calm.

What exactly was the damage to the Monroe?

All the glass and aluminum fittings were destroyed, the air conditioning, television sets, all the furniture. A few of our restaurants were also completely destroyed. We have $1.2 million worth of ‘direct’ damage, and $600,000 to $800,000 of ‘indirect’ damage. While the hotel remains closed, we have to continue paying rent, which is $50,000 a month. We have to pay salaries, electricity, water, and all the taxes. That comes to around $225,000 a month. We were closed for two and a half months. We had to train people for the reopening. That’s an added expense. We have to re-launch the hotel. We have to do a lot of advertising. Before the explosion we had an average occupancy rate of 70%. We need to reenter the market. To do that, we are going to have to spend a lot of capital – around $300,000 to $350,000. All this we wouldn’t have had to spend if the problems hadn’t occurred.

What was the Monroe’s occupancy rate on the day of the explosion and how many guests were in the hotel?

Occupancy was 71% – that’s 120 guests.

Have you kept all your staff?

Half of the 132 staff were sent home. We were paying them 50% of their salaries. The other half we used here at the hotel. No one was dismissed.

When did you reopen?

On May 15, we opened three floors. The rest will open towards the end of the month. But some of the restaurants we have had to totally renovate because they were completely destroyed. They will have new decoration, new furniture, a new look. Everything will be new. They will open shortly after the rest of the hotel.

How have you made the best of a bad situation?

These last three months have been a very big crisis. The Corniche Monroe management also manages the Markazia in Downtown Beirut. We have been looking for a client niche. We had lost most of the international clients as well as the Arab tourists. In this respect, media guests at the Markazia constituted a big support. We were offering special rates for media stays. Here in the Corniche Monroe, we have done a lot of upgrading in all parts of the hotel, with respect to furniture especially in the rooms. We have changed everything, carpets, walls.

What are you doing in terms of relaunching the hotel?

We have around 12 people who are going to travel to all the Arab countries. We are also preparing a local and inter-Arab media campaign. We have people who are going to travel to Turkey, to Europe, to promote the hotel again. Even while the hotel has been closed we have been in Turkey, Moscow and Europe.

What is the message that they will be carrying with them?

First of all: We have been hurt, but we will continue. Lebanon has become a free, democratic country. We know how to fight for freedom and democracy and we’re going to learn how to live with democracy. Lebanon will have a ‘free’ summer, in a free country. The advertising people are looking at how they can package this message in a professional way, without getting into politics.

What will they be saying about the Monroe hotel?

We’re back. We have upgraded. We’re waiting for you. We have received a lot of support from many of our clients. They have phoned us, they’ve sent us faxes and Emails saying: We’ll be back. We miss Lebanon, your service, your hotel. And we’ve started phoning and emailing these people, especially these people – of whom there are hundreds.

Thomas Schellen

Thomas Schellen is Executive's editor-at-large. He has been reporting on Middle Eastern business and economy for over 20 years. Send mail