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Tech opportunities for the Lebanese hospitality industry

Getting online

by Mohammad El Hoss

It is the end of 2018, and the tech-enabled generations are finally becoming the decision makers in their workplaces. We live in an era where technology is no longer an industry, but rather a layer that transforms all industries, making them more connected and efficient.

There are more creative and brilliant minds in Lebanon than ever before, constantly solving problems and shaping new value chains that will simplify how we do business for decades to come.

Barriers to innovation

Nevertheless, as any entrepreneur in Lebanon knows, there are many barriers that currently slow down the innovation and adoption of new business models and technologies. Such barriers include complicated regulations on e-commerce as a business, as well as the infamous electronic signature law, which state that electronic signatures, even if verified, are not legally binding. The process of establishing and registering a sal company is in itself tedious, requiring entrepreneurs to navigate all kinds of legal obstacles.

The HORECA industry backbone, which provides services and supplies for hotels, restaurants, and cafes, is ready to adopt innovation and expand, in spite of the various industrial barriers. In fact, the HORECA market is already one of the largest in Lebanon, according to BankMed research and a report published by the World Travel and Tourism Council in 2016. That year, the HORECA market accounted for at least 20 percent of the Lebanese workforce, the report shows.

As it stands, 66 percent of buyers in the hospitality industry are already looking for online alternatives to spare them the hassle of managing the currently offline supply chain, according to CloudSale’s HORECA market survey conducted in May-June 2018, which gathered feedback from more than 50 HORECA outlets in Lebanon. The solutions the buyers  are looking for are not re-inventions of the wheel, but rather tools that digitize the workflow they are already familiar with. The biggest problem holding back the shift to digital is industry standard, unregulated, deferred payments. A lot of startups have made it their mission to come up with innovative solutions with banks to deal with deferred payments digitally. However, convincing banks and financial institutions that there needs to be a product before proven traction and sales is a difficult task.

Moving markets online

On the other side, the suppliers of the HORECA industry are ready and eager to list their products online. Even for the most traditional sellers, there is little downside to opening themselves to additional sales channels, especially if these channels are efficient and scalable. However, most of these suppliers do not have their data readily available to transfer online, necessitating an initial investment of time. They need to shoot photos of the inventory and hire further support to organize the companies’ inputs. All this can be difficult to carry out without having seen actual sales growth and cash invoice settlements first.

The path forward is clear: There needs to be a mutual effort between regulators to create predefined frameworks for exchanging products and payments online. Once this happens, financial institutions and banks will be ready for mass adoption, and hospitality businesses will be the first to benefit.

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Mohammad El Hoss

Mohamad El Hoss is the CEO of CloudSale, an online B2B marketplace where HORECA wholesalers can showcase all their products.

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