The holy month of Ramadan is traditionally a slow one for tourism in the Arab region, and the hot streets of Beirut have been somewhat subdued this June. But among those in the hospitality sector, the sense of expectation and excitement for a busy July and August is so palpable one can almost taste it.
For the past six years, tourism in Lebanon has suffered from local insecurity and regional instability, which have caused the number of tourist arrivals drop from 2.17 million in 2010 — considered one of the golden years for tourism in Lebanon — to 1.5 million in 2015, though a tourist bump at the tail end of 2016 brought numbers back up to 1.7 million.
But with internal security now more or less under control, there are solid indications that summer 2017 will see a significant improvement in terms of tourism — albeit not at the levels of summer 2009 or 2010.
Back in business
With a new president and government in late 2016, the Lebanese hospitality sector finally saw progress on the internal instability it has blamed for sluggish tourism these past six years.
Indeed, tourism numbers from December 2016 to date reflect a sector starting to get its wings back. According to EY’s Middle East Hotel Benchmark Survey report, room occupancy rates at Lebanon’s five star hotels during December 2016 were at 64 percent, the highest they have been for that month since 2010.
Hotels Executive spoke to noted this uptick as of December last year. “Things started improving in the last quarter of 2016, and that improvement continued over to the first quarter of 2017. So from January 2017 until end of May 2017, we have been way above last year and way above our expectations for this year as well,” says Ramzi Sayess, regional vice president and general manager of the Four Seasons Hotel Beirut.
A bright beginning
This positive momentum has spilled over, with many hotels saying occupancy has been markedly better so far this year.
The Phoenicia Hotel has already added several million dollars in revenue year-on-year from 2016, despite 2016 being “a not bad year all in all,” according to Peter Edholm, cluster director of sales and marketing at Le Vendome and Phoenicia Intercontinental Hotels & Resorts.
Le Gray also started 2017 on a positive note. “The first quarter of 2017 was definitely better than same time last year. We’ve witnessed an increase in occupancy of 18 to 22 percent from first quarter 2016. The first quarter 2017 was positively influenced by the election of the president and the improving security conditions in the country,” explains George Ojeil, general manager of Le Gray Lebanon.
O Monot, a luxury boutique hotel in Ashrafieh, saw a 158 percent increase in room revenue year-on-year from June 2016, according to Michel Boulad, the hotel’s director of sales and marketing. While the Four Seasons’ Sayess says comparing 2017 to 2016 is like comparing day and night, and that the results for the first quarter 2017 are almost double what they were last year.
The newfound sense of security and safety in the country seems to have played the biggest role in these results. “The improvement is because the whole country is now deemed to be safe, as we saw at the Arabian Travel Market (ATM), the perception of Lebanon in terms of the security situation among visitors is changing,” says Boulad.
Sayess notes that it was Egyptian tourists who increased room occupancy at the Four Seasons, both as corporate travelers and as leisure groups. “We had a lot of social groups and weddings from Jordan, Syria, and Egypt … we also had big corporate accounts from Egypt that came to Lebanon for the first time. I assume they used to go to other places such as the GCC or Turkey, and now they’ve shifted to us,” he says.
Phoenicia’s Edholm also notes the positive trend of increased Egyptian leisure and corporate guests in 2016, but cautions that Lebanon might see less of them this summer due to the challenges facing the Egyptian pound.
Take back the gulf
The successful first half of 2017 has brought optimism and positive energy to preparations for the summer season, which effectively started after Eid el Fitr.
Prior to 2012, summers in Lebanon were full of GCC nationals escaping the desert heat in favor of a milder climate, but security incidents over the past six years have caused their visits to dwindle to next to nothing as a result of travel warnings and restrictions.
Hoteliers Executive spoke to are hoping to regain those tourists. “I think with the Gulf markets we’ll for sure recover [from a potential decrease in Egyptian tourists], and add even more. The ban is more or less lifted, although some Gulf countries have more restrictions than others,” says Edholm.
The Gulf countries are Lebanon’s most logical tourists, Pierre Achkar, head of the Syndicate of Hotel Owners, explains. “Across the globe, the best tourists for your country are your neighbors because of the proximity between you means [a] short travel time. Therefore, the Gulf — which is between two to three hours away by plane — has historically constituted the biggest percentage of visitors to Lebanon, and they would come more than once a year and even had investments in the country,” he says.
Ojeil explains that Lebanon holds a unique appeal for GCC nationals, which makes re-attracting them easier. “We don’t need a great effort, if they give us security and safety, it’s enough. In Lebanon, you can live the European experience while speaking Arabic, and this is what the GCC nationals like. They’re always welcomed in Lebanon. We know their habits and can cater to them, and we know the royal families and how to deal with them,” he explains.
Hotel sales teams have been touring the region ahead of the summer season, promoting Lebanon properties to tour operators and agents in the GCC. “We worked very actively with our worldwide sales and the regional office, and our sales team was traveling the globe up until two weeks ago. They either targeted new contacts, or touched base with existing ones. But really, the number one goal is to let people know Lebanon is safe, it’s a great place and it has a lot to offer,” explains Sayess.
For O Monot, now in its second year of operation, the GCC is an untapped market which they are exploring for the first time this year through their participation in ATM and other events. “We didn’t go last year because it didn’t make sense to approach the Gulf market when there was a travel ban. Now, they are trusting Lebanon as a destination again, which is what I heard from several airlines that are increasing their flights to Lebanon. So there is much more demand in the country and at the end [of the day] these tourists need hotels. So our expectations are that much [higher] for the summer,” says Boulad, citing Kuwait Airlines, which has scheduled 14 flights per week to Lebanon this summer.
Don’t forget the expats
While the hospitality sector’s efforts may be focused on GCC nationals, they are still keeping their eye on Lebanese expats who may be eager to visit their homeland, now that calm prevails and the garbage is off the streets.
The Phoenicia is predicting that expats who had delayed their visits to Lebanon may choose to come this summer. “Who comes first when a destination comes back? It’s those who are familiar with it, for example, the Lebanese diaspora, and we are seeing a trend there. Maybe they previously postponed their trip due to the garbage crisis or conflicts, but they can’t postpone forever, and now is the time to come back,” says Edholm, predicting that there is going to be an increase in visits to Lebanon from Lebanese expats in South America and Africa.
For O Monot, focusing on attracting GCC nationals and expats makes more sense during this period than working on new markets. “For the moment, our main focus is on reviving the local market of business travelers and that of leisure travelers from the Gulf. Now is not the best time to look at new markets because we can already get a lot from what is available, but which was not accessible to us for a very long time,” explains Boulad.
All are welcome
Gulf tourists and expats are not the only ones visiting Lebanon this summer. The hoteliers interviewed say interest from Europe and America has increased so far this year — and hope that it will continue in the summer.
Speaking for Le Gray, Ojeil says that although they have been making an additional effort to promote the hotel in the GCC region, it is against the hotel’s policy to focus on one market feeder. He explains that they have had more international journalists as guests than they did previously. “Our strategy doesn’t focus on one main market. We’re actually receiving a lot of journalists from many parts of the world, such as the US, Latin America, and Europe, who are reaching out to us to write about the hospitality market in Lebanon,” he says.
The mix of European and Gulf tourists is interesting for a hotel, explains the Four Seasons’ Sayess. “We have bookings from the GCC, from Europe, and from expat Lebanese who come for the holidays. People coming from the Gulf are looking for different accommodation than people coming from Europe — it’s nice to have this balance. You have more suite business for the Gulf tourists and more room business from Europe, but sometimes that can change as well,” he adds.
Exercise cautious optimism
Optimism for a successful summer 2017 is indeed high. Many hotels were already fully booked for the week of Eid el Fitr and are experiencing high demand for July and August, although bookings in the region are usually made last minute. “In this part of the world, we don’t book many months ahead as they do in Europe. In some part, it’s because of the security situation and what is happening in the region, so people fear planning their trip ahead, and then we, in this part of the world, are not planners. It’s always last minute in this region,” explains Le Grey’s Ojeil.
However, no one in the hospitality sector is blind to the fact that the situation both locally and regionally is very different than it was in 2010. Their optimism is mixed with a healthy dose of caution.
To begin with, the Gulf region itself has changed in terms of purchasing power, and its nationals can no longer spend as they used to. “You have to balance the positive trend in the market with the decreasing oil prices and the overall situation in the Gulf, which wasn’t the case when they used to visit Lebanon before,” says Edholm, explaining that although GCC nationals will still visit Lebanon this summer, they will probably book less lavish rooms. “I think we’ll see much more volume than 2016, but I think we’ll sell less champagne bottles than we want,” he adds laughingly.
Ojeil also cautions on the GCC’s purchasing power. “Let’s be conservative in our expectations. I think we will have a good summer but we won’t notice a boom for many reasons. First, back in 2010, as I recall, the oil barrel was at $150, and there was no war in Yemen, Syria, or Iraq. I think the purchasing power of the GCC feeding market is exhausted and that they are not going to spend like they did back in the day,” he says.
There are also repercussions from past years of instability remaining in people’s minds and affecting their perceptions of Lebanon, Ojeil says. “We need to promote more positive news in the country. Lebanon is fantastic and could be a destination for all kinds of tourism from medical to culinary, and it is safe now, so we should be promoting it,” he adds.
Boulad also speaks of the perception of Lebanon among an international audience as the main difficulty he faces in promoting O Monot and Lebanon. “Perception of the security situation is improving, but will always remain a challenge because people don’t see Lebanon as just Lebanon, they see it as part of the region,” he says, adding that negative media focus is a hindrance.
It is with all this in mind that those in the Lebanese hospitality sector are expecting a much improved season — but not a miracle. “For me, if hotels are running at an average of 80 percent occupancy for the whole summer, then I would consider that very good,” concludes Edholm.