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Restaurants – Beirut’s whet appetite

Despite a buffet of recent disasters, dinners are back in downtown

by Executive Staff

The resilience of the Lebanese has become legendary, and each war confirms that by the end of it people will sweep off the rubble and return to business as usual. Even tourists seem to believe as much. On the other hand, even though tourists keep on returning, the Lebanese themselves are leaving their homeland for more stable countries. And Lebanese entrepreneurs are not only selling their knowledge abroad, they are investing there as well.

Through the ordeal of the past 18 months, where blockaded downtown Beirut became a ghost town, some businesses stayed open, confirming the Lebanese resilience and entrepreneurial spirit. However, even for the bold ones patience may have a limit.

One would be forgiven for having felt rather schizophrenic on May 22. On that day downtown Beirut metamorphosed from what seemed like a sad refugee camp with more tents than refugees into a booming area where tourists and locals shopped, shared coffee tables and smoked narghiles — all in less than 24 hours. “When they took the tents down I went one evening there and saw the terrace full, the inside of the restaurant full, all the old customers, you know, my heart grew,” said Sami Hochar, general manager of Catertainment, the company that owns Lina’s Sandwiches.

Cooking on a roller coaster
A staple of Lebanese creativity that went as far as Paris, Lina’s had reason to celebrate the end of the 18-month occupation of downtown Beirut. Throughout those months, the downtown branch had accumulated losses of about $50,000, a sum it will take the restaurant another six months to recover. The July War with Israel is classified by Hochar as “a catastrophe — we had 300 customers a week”.

But after those thirty days of war, downtown quickly recovered and by September 2006 the number of clients had climbed back to 2,500 per week. But this was not to last. By December 2006, that number dropped to 750 customers a week.

Of course, the problems downtown had started even before the 2006 War, with the assassination of ex-Prime Minister Rafik Hariri. “If you compare recent numbers with 2004, it has never been as good again. At that time we used to get around 5,000 customers a week,” Hochar said.

When he saw the tents downtown, Hochar thought the occupation was going to last “one month, six weeks at most. I never imagined that any Lebanese party would accept such situation where the economy of the country was in danger, families were in danger, losing their jobs, their money. I thought nobody would ever accept such a thing.”

That disbelief was shared by Jean Claude Ghosn, managing partner of Ghia Holding, owner of Duo. Hope, or miscalculation, was one of the things that kept his restaurant open. “We kept Duo open because we didn’t know downtown was going to be closed for eighteen months. Everyone was saying it was going to be one month, two, maximum three months,” Ghosn averred. Known for being full for lunch on a daily basis, over the 18 months of paralysis Duo accumulated a loss of about $900,000. The holding company had already closed another restaurant in downtown, two months after the tents came. “We were losing a lot of money with Al Bakawat, as it was not on the main road and customers had to cross checkpoints to access the restaurant,” Ghosn explained. With that closure alone, 32 employees lost their jobs. In Duo, with some effort Ghosn managed to keep most of the staff, having to let go only 15 out of 45. But, he said, “the remaining got a lower salary, because they worked fewer hours.”

Success abroad was another reason that Duo could not close. With a Duo restaurant already operating in Dubai and two other opening soon in Qatar and Riyadh, Ghosn could not close the flagship of his franchise. “We cannot open there and close here, it is not fair,” he said.

La Posta, an Italian restaurant that shares the same street with Duo, was equally damaged.

“With the occupation of downtown by protesters, our turnover fell suddenly by 80% and 95% compared to 2004”, said General Manager Michel Ferneini. “In other words, in the last period of the occupation the monthly turnover was what we used to make in a single weekend in 2004.”

Empty seats
Deprived of foreigners, the restaurants were also empty of Lebanese. “Tourists? Not even ‘tourists’ from Verdun or Achrafieh used to come,” Ferneini pointed out. “In the last period our guests were mainly people working in the downtown area.” At Duo, the 400 covers a day became 25 during downtown’s occupation, “counting the staff and ourselves”, according to Ghosn.

Hochar, who refused to close his bar in Gemmayzeh during the 2006 War, knows the problem well. “We stayed open, we refused to close. We had two or three people at the bar — I was one of them.” The problem with downtown, as opposed to the war with Israel, was the length. With a deadlock that did not seem to have an end, restaurants did not even need to fire — workers started to leave on their own accord.

“We did not fire anyone. Some were relocated, and some left to other countries,” said Hochar. “In the last three years we did not fire a single employee,” Ferneini concurred. “Some of them travelled abroad, and not because they were afraid of losing their job but because they lacked confidence in the country.”

The drop in the quality of the service is noticeable. For Maya Bekhazi, a young entrepreneur who owns Tartuffo and is a partner in at least four different restaurants, including the landmark Beirut Cellar, “the biggest problem we have now is the export of our human resources.” Sharp and meticulous, Bekhazi has been hired as consultant by a big hotel chain, and she knows the importance of highly trained staff: “It’s been very tough to replace people. We always bring new personnel, we train them, and then they find offers outside.” Ferneini agrees. “Finding new collaborators is a hard task. There is a huge demand while the offer in all positions is rare, largely unprofessional and unqualified,” he said.

Bekhazi acknowledges that the salaries offered abroad are higher, often three times as much, but the Lebanese wished they could come back even for lower pay. “I always get calls from Lebanese who used to work for us wanting to come back, even for less money. The only thing they want is stability. They are young and ambitious, they want to set up families, they want to save some money, that is their concern,” she said.

Sometimes, these employees end up working for a company founded or created by a Lebanese — but located outside Lebanon. La Posta, Duo and Lina’s are all opening branches or franchises abroad, even as far as India. Inside the country, the owners make sure they keep strategies to swerve the odds. “We are trying to make sure our eggs are not all in one single basket”, explained Maroun Daou, operations director of Ghia Holding.

The basket, in Ghia Holding’s case, is the Green Line, or the imaginary border that has been dividing Beirut into East and West since the time of the Civil War. “If you think about it, all our restaurants are on the Green Line, from Abdel Wahab to Paladar to Shah to Duo, all on the separation line. I am not afraid of being in downtown, but I prefer to stay outside, like ABC, Achrafieh, in the mountains, maybe even in Dbayyeh in the future, to diversify as much as possible”, said Ghosn. Lina’s, which is diversifying its locations as well, is opening a branch in Saida, even though it will not be able to sell alcohol.

Beirut’s downtown has already shown it is probably as resilient as the Lebanese. On the first Saturday after the tent city was removed, Lina’s clients went from 100 to 700. Duo will register a profit of $40,000 in June. La Posta also expects the first year of profit-earning after three years of losses. But all entrepreneurs seem rather cautious about the situation. “Again we are surviving, we are reopening, and this is due to the Lebanese individual, not the government or the parties,” Hochar said. “But then, how long will it last? The kids are leaving, smart people are leaving, big companies are leaving. I always give the example of my children. One of them left already and the second will leave next year.”

Yet hope is staying. “We are hopeful,” Ghosn averred. “We don’t believe much anymore, but we don’t have another choice.” Maya Bekhazi shared what seems to be, in a rather Lebanese way, a paradoxically optimistic cynicism: “I can’t afford to be very realistic, let’s put it this way — I just have to be very positive, because if I want to measure the risk I will just stop all my business in Lebanon.”

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