CommentOpinion

Building socially responsible corporate cultures

by Daan Elffers
written by Daan Elffers

Corporate social responsibility (CSR) largely refers to the responsibility of an organization — whether it be a corporation, a governmental body or a nonprofit organization — to its stakeholder, the wider society and environment. The mainstream view is that organizations, as ‘corporate citizens,’ ought to be accountable to and responsible for the consequences of their activities which directly and/or indirectly affect society and the environment.

Legislation is a driving force in the uptake of CSR, and with penalties for poor implementation particularly for FTSE 100 companies, there is a tendency to view it as having a ‘check-list’ quality. This approach may generate only incremental changes, with limited innovation as organizations are cautious to go above and beyond such legislation in light of potential risks and unknown rates of return on investments.

Despite this, there are a cluster of organizations which are shaking up the traditional business models in favor of new, alternative models. The concept of the circular economy — an alternative to the existing linear economy of ‘take, make and dispose’ as one that sees products re-enter the economy continuously — is inspiring a number of organizations to reject the traditional business model in favor of something quite innovative. For example, Method, a pioneer in homecare and personal care products, manufactures products using materials that can be infinitely recycled in technological and biological cycles through a process that uses only renewable sources of energy. It generates clean water as a by-product and the business culture is one that practices social fairness.

Alternative models have the capacity to not only exist, but to also thrive in an economy that is, by and large, quite conventional. This should offer confidence to organizations in moving away from the traditional business model, which is typically profit driven, to one that holistically embraces CSR and delivers value systemically, across the triple bottom line: people, planet and profit.

There is a strong business case to be made for CSR, evidenced by the current shifts in the finance and investment markets whereby the adoption of CSR policies, and perhaps most importantly, the availability of published CSR reports, is of growing interest to investors. The establishment of the Social Stock Exchange (SSX) in London is evidence of this shift, becoming the first platform of its kind in the world to serve as a marketplace for publicly listed social impact businesses. Currently, the SSX has a market capitalization of $1.91 billion and the market for social impact business is anticipated to grow between $200 billion and $650 billion in the next decade.

To ensure that the investments are realized, it is important to identify and minimize the risks associated with CSR implementation. Most risks are associated with poor strategic integration — this is where a CSR strategy has not been integrated at the core of the business and manifests in a strategy that is not in line with stakeholder interests with poor communication of strategy and impact. Such challenges can be overcome by ensuring a material assessment is conducted prior to strategy development, to ensure that it meets the needs of stakeholders.

Having achieved this, it is then crucial to communicate this narrative to stakeholders to ensure long-term engagement. This need to report and communicate is partly driven by an increasing culture of transparency. It is estimated that 90 percent of consumers would actively recommend an organization who had excellent CSR credentials, with a report in place through which they can locate this information. Aside from the advantages an organization may receive through this increased transparency, it is the process of reporting that yields the most benefits. The process provides a window of opportunity to analyze and evaluate an organization’s internal systems and processes, and enables risk to be fairly assigned across all departments, stakeholders and partners by integrating them into an organization-wide process. As Alberto Andreu, then Head of CSR & Reputation for Telefónica, said in an interview with EMG, “if risk has no owner, you have a problem.” Risk can only be managed when identified, understood and communicated.

CSR is not a static concept and it is important that an organization doesn’t get caught up with the terminology. Instead, they need to understand the common goal; a concerted effort by organizations of all types to identify and take responsibility of the risk that it generates as part of its day-to-day running. The success of a CSR strategy, measured by its impact and return on investment, will depend largely on its applicability and relevance to the organization itself. As such, it is crucial that organizations remain focused on the aspects important and unique to them.

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DesignSpecial Report

Design of the times

by Thomas Schellen
written by Thomas Schellen

When you walk into a communications agency in Beirut, you know it. Dark wood paneling and bookshelves lined up with tomes in historic succession, a vault with a time lock on every floor, picture after picture of lovely high rises, or a garage-door-sized executive desk in mahogany. Think law office, bank headquarters, property developer, or (self-) important manufacturer. For an advertising or communications outfit, think open floor space, unconventional accessories (from basketball hoop to marketing murals), roughly hewn looks of concrete and glass or sometimes limestone on interior walls, communicative courtyards, and lots of alliterative post-its sticking to every conceivable (and inconceivable) vertical surface.

In short, if it trumpets creativity with notes of purple berries and minty hints of chaos, you are standing in the office of a Beirut advertising firm. This is the Lebanese industry that has been leading – and indeed supplying – the entire region with communications talent, creative talent, and design talent for at least five decades. It is an industry whose self-perception of being creative means that it is pregnant with new designs in every campaign, every pitch, and every presentation down to its office walls. The only design related questions of relevance here are: is design everything, is everything design, or both?

With so much design competency it has become clear that the advertising and marketing communication minds of Beirut don’t have a single answer about the nature and importance of design. Ask them and they spawn a whole library.

Firstly, design is nigh on impossible to define as a concept and the industry has a grip on this fact. “Design is a broad concept under which you can align life itself,” says Omar Nasreddine, vice president for Central and Eastern Europe, the Middle East and Africa for global advertising agency Grey Group, a unit of world-leading marketing communications conglomerate WPP.

Life, thankfully, is beyond commerce. Adding measurability in form of marginal utility or market value then is key for getting design to work for the benefit of its author or intellectual owner. “In a business context, design is twofold: first it is design that we do, aesthetics, from packaging to artwork to ideas, and [secondly] there is the strategic bit which is all about how you design your own company, your own business strategy, your expansion,” Nasreddine differentiates.

While cautioning that he is not comfortable with restricting the design discussion to strategic design, he continues, “But for the sake of making the discussion easier, one common denominator that defines all the ways in which you strategically design things, be it products, services, concepts, or structures, is optimization. The only reason why strategic design exists is to optimize anything – from a person to a product to a structure to an ideology, and if you do not apply the law of evolution to that design, it might as well have not been there.”

Keeping the mind profitable

What must never be amiss in using strategic design according to Nasreddine is profitability. This certainly reverberates with the business of media planning as another existential pillar of the marketing and communications industry. Standing besides the advertising agencies, specialized entities in advertising conglomerates that have often been referred to in industry lingo as media buying units (MBUs) are focused on designing and negotiating the avenues that will deliver return on investments (ROI) for the marketing dollars of their advertising clients.

[pullquote] Design is a broad concept under which you can align life itself [/pullquote]

From his perspective, as expert on media planning and buying, “design is creativity for us. We always focus on creativity in media buying – how can we be creative in our media approaches?” says Wissam Najjar, managing director for the Levant region at OMD, a worldwide media planning company and unit of Omnicom Group, a New York-based global marketing communications powerhouse.

“We know that the future is content so we focus a lot around content. For us creativity is about being creative through content, and for us being creative means that it has to make business sense to the client,” Najjar elaborates.

Explaining that things like getting gleaming awards for a campaign’s design will “not do anything for the client who wants volumes, to achieve targets, defend market share or gain it,” Najjar says the media planners speak a language with the client that is based on the fact “that he wants exposure and at the end of the day wants business and it all has to relate to ROI.”

This means that in his experience creativity and design aren’t quite everything for a media planner, because some creative ideas emerge as too complicated for deploying them in sales and the creative angle alone does not have “the scientific approach that we do,” Najjar says. “Our role is to sit together and craft a strategy which is doing well creatively and also as a business strategy.”

“Our design part comes in where we do something creative within the media itself. We think about how we can approach any media with a non-traditional manner,” he continues and references approaches such as the growing practice where adverts mimic the style of content providers such as news media publishers.

These so-called native adverts seamlessly blend into the platform formats of digital environments and provide advertisers with increased rates of engagement by media users, although Najjar notes that “some people feel frustrated [by native advertising] because they believe that they are being cheated.” But the cardinal question for media planners cannot be the displeasure of some, it appears, or a debate over the need for an impenetrable wall between marketing and content.

Where just a few years ago advertising groups in the Middle East were lamenting how the region was still lagging in its embrace of online advertising, the new ubiquity of tools such as native advertising testify to the fact that the digitization of communications is perhaps slower here but no less of a challenge to advertising and media stakeholders to develop sustainable standards of governance, and at the same time achieve the economic aims that will allow both marketing communications and content publishers to grow.

For a media planner, this means being clear about priority one, Najjar says: “Our biggest topic is how to engage the customer, so anything we come up with has to be engaging.”

ADVERTISING2

And of course the need to survive is right at the center of all changes in the communications sector, including the role and importance of design. With the advertising industry’s own exposure and adherence to the laws of evolution, design has always been present but in recent years it has risen higher and been given what Areej Mahmoud perceives as “its right place, the place where it should be.”

An evolution in intelligent design

“Design is for sure taking a more serious place in advertising and has been doing that for a few years,” says Mahmoud, who is head of creative at Leo Burnett Beirut, an international agency that is part of France-based advertising conglomerate Publicis.

He links the greater role of design to the industry’s departure from what he calls “the tyranny of the media,” the era when advertising industry minds were focused on which medium a message was to be placed in. “For a very long time the advertising industry was hijacked by media, where the thinking process of anyone in advertising was, ‘what are we putting on television, what are we putting on radio, what in the magazine, what’s outdoors?’”, he says.

The old approach according to him would seek to find a common ground between disjointed information strands on consumer, product, brand message and sales purposes associated with an advertising campaign and implement this in media according to placement priorities. For Mahmoud, this traditional way of thinking in advertising was overly formulaic. “I don’t think of design as a practice, because I am a designer. For me, thinking as a designer is looking at a problem and all its angles,” he sums up his definition of design and enthuses, “Since today we are free from the tyranny of media companies, you go back to solving a problem as a human being, not as a marketer, planner or salesman.”

As an example for how design thinking at an agency can solve problems when it is not bound to media, he cites approaches like that of New York-based agency R/GA whose Hammerhead navigation solution for bikers earned top awards at the 2015 Cannes Lions.

Approaches proving the validity of the design method in solving business problems are accumulating all over the advertising industry and it’s not only global agencies with pedigree that can deliver them. When Beirut-based agency Interesting Times was offered a stab at a shampoo launch, their first thought was “boring”, says Ashraf Mansour, a managing partner and co-founder of Interesting Times.

But when they took the possibility seriously and decided to tackle it, what came out was a virtual concert with an interactive online audience of over 50,000 – and since the campaign’s focus was on Saudi Arabia and Egypt, this included an audience of over 20,000 in Saudi Arabia, most of whom, as Mansour emphasizes, likely never had a chance to attend a live concert. From the agencies’ perspective, its contribution not only helped sell a new soapy product but also allowed women in the kingdom to set their minds a little freer.

[pullquote]For me, thinking as a designer is looking at a problem and all its angles[/pullquote]

It was not necessarily a strategic design concept that was the basis of their startup a few years ago, after Mansour and several colleagues departed from multinational agency JWT to establish their own firm. Stepping out of their comfort zones as corporate executives created a specific spirit for the agency founders, he explains. “There was something in the narrative that became truth for us: it was like we want to be people living in interesting times, meaning the time of ongoing change. That was crucial for us and is something that we try hard to remain true to. We have eight different logos for Interesting Times [which express that] the name is the same, the spirit is the same but the interpretation doesn’t stop. From a design perspective this reflects the spirit. Is the design consistent? No, because the thought is not consistent, it is always changing.”

For Mansour, the starting point of every project is strategy which precedes design. “The way we see things is that everything is converging. Advertising, PR, design, everything is one. How does this lead to strategy? I think there needs to be a strategy and there needs to be an interpretation of this strategy in terms of PR, in terms of social, in terms of design.”

He agrees with the other advertising professionals interviewed by Executive that there is considerable hype to the narrative depicting strategic design as a new discipline for practically everything. All the experts concur that these attitudes are due to everyone’s desire to own a profitable business, leading everyone to describe their own approach as the most innovative one, playing the eternal game of competition. In this game, “even naming has a strategy now,” chuckles Mansour.

An ever-crowded field

Overlaps exist for example between strategic design consulting propositions and the methods of conventional financial consulting, says Nasreddine, but adds that the short-term orientation of many financial consultancies is surpassed, in his view, by the longer-term focus of strategic design. Plus, immersion into strategic design is today indispensable for anyone in advertising leadership, he says. “If I want to talk to a top notch client, I need to speak with top notch knowledge and no way can top notch knowledge exist without strategic design as a part of it.”

Where questions and some doubts may loom over the presence and strength of a design ecosystem in Lebanon [see overview on page 28], the experiences of professionals such as Nasreddine and Mahmoud speak with a historic depth on the design mentality in the country, as they cite the positive influences that mentors and models such as regional industry greats Philippe Skaff at Grey and Farid Chehab at Leo Burnett had on their own development.

While the professionals conversing with Executive shared the concern that too many talented designers have been and are migrating away from Lebanon, this seems to support rather than disprove the evidence of a, however informal and tender, design ecosystem. Design talents keep sprouting in the country, or as Mansour says cheerily, “In Lebanon, from a design view, we have the talent, [and] we have the taste.” Mahmoud observes that some “mediocrity will be found everywhere” but he emphasizes, “I am proud of the design ecosystem. There are terrible designs but also good designs in the region and in Lebanon specifically we have some good schools that are run by really enlightened people.”

For OMD’s Najjar, the issue is less the state of the national design ecosystem but more the state of the nation and how to use the power of design and communications to upgrade perceptions of Lebanon. “Our role in communications is to spread more news about the positive things in Lebanon,” he says and proclaims, “let’s push positive news in Lebanon – in a fucked up system like Lebanon you have to take a first step and that’s changing the perceptions. How do you change it? By [employing the] media.”

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CommentOpinion

Lebanon’s doppelgänger

by Samer Karam
written by Samer Karam

Imagine a country with a mix of ancient and modern cultures and religions, and 6000 years of history. Imagine a country where women and men are equally educated, and where technology and innovation combine.

Imagine a country with some of the highest Human Development Indicators (HDI) in the region but with a labor potential that remains untapped, and a stifling brain drain.

Imagine a country where the diaspora is a vast, successful, powerful pillar of its economy and its fledgling startup ecosystem struggled for years until a critical event resulted in overnight capital abundance.

To every Lebanese, in Lebanon and its diaspora, this country is Lebanon.

To me, this is also Iran, Lebanon’s doppelgänger – not in all things for sure, but in entrepreneurship.

Lebanon’s startup ecosystem was born around 2010, with 2 Venture Capital (VC) funds, an accelerator, a tech conference, a startup weekend, and an angel network. For 4 years, the country struggled to attract direct foreign investment for its startup ecosystem, as the sovereign risk was considered far too high for venture capital. Then in 2013, Lebanon’s central bank intervened to stimulate the knowledge economy with BDL Circular 331. Overnight, over $400 million were made available to startups, VCs, and accelerators. Today, Lebanon’s startup ecosystem has transformed into the leading ecosystem in the Arab World, with a few international exits, over $250 million in 7 VC funds, 3 accelerators, 3 angel networks, 2 tech conferences, 1 international startup conference, well-funded support institutions, and hundreds of entrepreneurs.

Meanwhile, Iran’s fledgling startup scene has grown, despite sanctions, and been incrementally shaped by a few key stakeholders, including Avatech and Sarava, Iran’s first accelerator and VC fund respectively. Support institutions have been driving the entrepreneurial culture, particularly through local versions of international events such as Startup Weekend and FailCon. Avatech runs a six-month extended acceleration cycle, with 10 startups completing in each cycle. With just over 100 startups operating in the country, the community has tentatively come together despite the global circumstances. So far, it has operated without access to international markets and foreign investment. If these barriers were removed, the startup system could blossom in a country which has more than enough potential. Half of Iran’s population of over 80 million is under 30, with a high regional literacy rate. More than two thirds of Iranian homes have broadband access and mobile penetration is enormous, with a rate of 1.3 mobile connections per citizen. With these levels of connectivity, education and aptitude, Iran is an incredibly viable consumer market, particularly for startups.

The startup scene in both countries has evolved despite challenges. Government initiatives in Iran and Lebanon have been put in place to stimulate digital sectors. Iran set aside $1 billion for an innovation fund for entrepreneurs, and is upgrading its infrastructure to accommodate the wave of growth. The Lebanese Ministry of Telecommunications has pledged to deliver Fiber-to-the-Home within the next couple of years. The two countries therefore not only share similar socio-economic and geopolitical challenges, but also the determination to overcome such problems in an innovative way.

After years of negotiations, world powers reached a deal with Iran on limiting nuclear activity in return for the lifting of sanctions. The future relief and, hopefully, removal of these presents a golden opportunity for Lebanon. Beirut is the bridge between Iran and the world, and in turn Iran is the untapped market that Lebanon can reach. Entering the GCC and European markets incurs large travel and legal costs for Lebanese companies, but a lack of visa restrictions between Iran and Lebanon facilitate easy working conditions with potentially fewer expenses. Although Eastern Europe has come to be a significant talent resource for Lebanon, it is culturally too different to be a natural extension. Turkey also has proven to be a good destination, but due to its strong homegrown economy, doing business there is highly competitive and there are clear signs of a slowing economy. Iran, on the other hand, has both the cultural and geographical proximity which would benefit Lebanon.

Today, a shared common language isn’t a key requirement for economies to achieve top growth in their interaction. The primary driver of mutual economic benefits is knowledge industries, which require limited upfront capital investment.  Code and design are the new common ‘languages’ found in those industries, and they transcend borders and cultures seamlessly. With both coders and designers abundant in Iran and Lebanon, it seems that a common language has been found between the two countries.

Lebanon can provide the knowledge industry investment Iran needs, and together the countries can produce ventures which are no copycats of powerhouses, but instead are globally competitive based solely on their own merits. In terms of entrepreneurship, Lebanon’s future lies with its doppelgänger.

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Brand Voice

THE FUTURE OF THE WORKSPACE

by Executive Editors
written by Executive Editors

Have you ever wondered what the secret to employee productivity is? This is the question Waterfront City asked itself before creating its Business Park. For months, the company has observed the best working environments in the world, seeking to identify the future trends in workspace design that increase productivity.

Here is what they found…

Research has shown that the design of an office is extremely important when it comes to getting things done efficiently and quickly. A good work environment has a huge impact on individual productivity, in particular affecting an employee’s ability to concentrate. It also enhances creativity, and thus innovation, in the services industries, which is critical in competitive economies.

In the last fifteen years, well-known Silicon Valley companies such as Google, Facebook and Apple have been leading the way in terms of innovative work spaces, using fun, fresh and creative designs. Their goal was to create a work environment where employees actually look forward to spending a day at the office. The office complexes aim to stimulate creativity and inspire employees to give their best.

 Companies like Apple, for example, have put tremendous effort into creating the perfect work environment by mixing business with pleasure in a setting where employees can relax and enjoy themselves, allowing their creative juices to flow and innovation levels to rise. Integrated business spaces that foster transparency, offer multiple options as to how and where to work and an environment that imitates life outside the office, with beautiful landscapes and natural lighting, are the best at improving employees’ productivity and happiness. Waterfront City’s Business Park offers just that: an elaborate campus made up of twelve office blocks, amphitheaters, abundant parking, green areas and retail spaces packed with the necessary services for offices, all nestled within a comprehensive urban space.

1. Flexible work

Being able to work when, where and how they want is one of the first concerns of today’s employees. In addition to working from their offices and homes, more and more employees are now working from airplanes, hotels and other remote locations. They need to be supported by technology in order to work efficiently no matter where they are. According to Makram Kaki, lead architect at Leftish, the company that designed the Business Park, Waterfront City will offer the kind of flexibility which tomorrow’s workers are looking for. “In The Business Park, we wanted to make sure to offer as many options and opportunities as possible,” he says. For example, the benefits of having 1600 parking spaces, surrounded by green open areas, a supportive retail network of stores, restaurants and other leisure facilities, are all distinctive elements for an advanced and productive environment. The entire Business Park is also covered with Wi-Fi in order to allow employees to be constantly connected.”

2. Open Spaces vs Closed Spaces

Silicon Valley has been the leader in terms of open work spaces. Leading companies such as Google, Yahoo and eBay have all adopted the trend. However, the latest surveys show that although open spaces may stimulate collaboration and creativity and make employees feel like they are part of a relaxed and modern company, they also bring problems, the main one being a lack of privacy. Many employees working in open spaces have reported being frustrated by distractions, which hindered their ability to concentrate and to think creatively, and led to poorer work performance.

 One solution to the lack of privacy complaint is the inclusion of nook-areas where people can go and isolate themselves. Efficient working spaces should also provide a variety of purpose-built areas for specific activities such as formal meeting spaces, project rooms and individual work spaces that can be used by all employees.

The offices at the Business Park are of a Grade A standard, the highest for commercial office space. That grade includes open floor plans, abundant sunlight and building layouts structured to facilitate the adoption of the most advanced digital technologies and connectivity services. This infrastructure allows for customization of the office space between open floors and nook-areas that adapts easily to the requirements of any business.

3. Green Areas, Lighting and Acoustics

Having enough natural light and windows as well as passive or active contact with nature is a very efficient way to improve employee productivity and overall job satisfaction. If your office doesn’t have windows, a simple potted-plant or a picture of the outside world can help. Good acoustics are also vital for creating a peaceful and stress-free environment that will allow employees to stay on task. Creating some privacy for workers at their desks and isolated rooms for private discussions, as well as using sound-absorbing material in the ceilings and floors, will help manage the level of noise.

 “Quality of life is our primary concern at Waterfront City. This is why we decided to build a Business Park that will put the workers in a state of mind that brings out their potential for creativity, productivity and innovation. The Business Park offers efficient floor plans, fully open spaces and offices from 100m² up to full floors of 800m², along with a unique campus layout with abundant green spaces and open areas. Landmarks include the great square in the middle of the park as well as the amphitheatre available for all companies at the Business Park to use,” says Samer Bissat, Senior Development Director at Waterfront City.

 According to him, Waterfront City is working on infrastructures that will not only improve employees’ productivity, but also their overall happiness and well-being.

“Having green spaces complements the project’s aim to be LEED (Leadership in Energy & Environmental Design) certified, that has led the Business Park to design abundant green spaces, as well as garden rooftops,” he adds. “Employees at the park can also go outside and take walks, enjoy the sea view or sit in our parks during their breaks.”

 It may be some time before Google, Apple or Facebook open regional offices in Beirut, but if one day they do, it seems the only major office space that can cater to their preferences and demands is the Waterfront City Business Park.

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CommentDesignSpecial ReportUncategorized

How scanners became storybooks

by Tania Anaissie
written by Tania Anaissie

Doug Dietz is a legend. He is the man that transformed the once miserable experience of receiving a MRI scan into a magical adventure. Doug is a design thinker.

He is an alumnus of our Stanford Hasso Plattner Institute of Design (d.school) Executive Education program. Doug was on the General Electric (GE) team that designed nuclear scanners (used to conduct MRIs). When they were first installed, he excitedly visited a hospital to observe them in use. What he saw was a small, 7-year old girl hiding behind her mother’s legs, terrified of the upcoming scan. The loud sounds, flashing lights, and deadly-looking stretcher brought her to tears. She was so upset, the family had to go home and reschedule the scan for another day. Hundreds of other children that year had to be sedated to undergo the MRI tests. As Doug describes it, “I went for kudos, but what I got was a kick in the ass.” He found it an incredibly heartbreaking and humbling experience.

Motivated to make a change after this encounter, he came to the Stanford University d.school to learn Design Thinking. He learned that by focusing on his users, he could make the largest impact. When his superiors at GE dismissed his request to conduct this work, he used his personal time after work and on weekends to move forward. He created an advisory board of children in Chicago, consulted experts at children’s museums, and spoke to a number of families in hospitals. As he progressed, his focus shifted many times until he reached a truly magical solution. He turned the MRI rooms into adventures that make children feel they are in forests, oceans, or cities. The machines and walls are painted with scenes, the technicians wear costumes and act, and children receive storybooks the night before preparing them for their upcoming “adventure.”

The results are incredible. When Doug visited after the change, he observed a small girl with her family. After the scan, she tugged on her mother’s skirt and asked, “Mommy, can we come back tomorrow?” The number of children needing sedation has dropped to almost zero.

Aside from the heart-warming change for families and children, Doug and his team have greatly improved the way teams design healthcare services. When talking to hospitals looking to buy either GE’s machines or a competitor’s, GE has secured multi-million dollar deals because the hospitals wanted Doug’s magical designs installed. And now within GE, engineering and marketing teams are asking Doug to join early discussions as they make changes to the machines. Engineers motivated by his story began to think, “How can we make the machines quieter and less scary?” As a result, GE will soon be releasing this new quiet MRI machine – an amazing advancement.

Doug’s story is a prime example that shows if you focus on your users and their deeper needs, you can transform people’s lives. This is so powerful that, naturally, more people will want your product/service. This can also transform how other groups in your organization work, scaling the desire for innovation.

Though you may not work in healthcare or work with children, we all have the ability to bring delight and novelty into our work. I truly believe that all people are inherently creative, but our school and work environments often stifle us. Design Thinking helps us re-engage our creativity. It is a problem-solving process that can be applied to any field. It consists of five process steps and a set of mindsets that radically shift how we work. The key element of design thinking is a focus on the user. Humans are the key to building successful solutions, and only by deeply understanding our end users can we truly innovate.

 Design thinking as we know it came to life in Silicon Valley. Startups in the Valley are eagerly applying it to their work, and it has become a key element of many Startup ecosystems around the world. Now, large companies are doing the same. Organizations like Fidelity, Jet Blue, Procter & Gamble, Capitol One, and more have opened internal Design Thinking innovation labs. They are attracting top young talent, developing innovative new offerings, and transforming their industries.

Aside from focusing on your users, what does being a design thinker mean? It means you believe in a bias towards action (do instead of talk), you build on your teammates’ work and make them look good, you seek answers from others who have different life experiences than you (and you really listen), and you work with teammates who come from a diversity of backgrounds and value their perspective. You also believe in iterating quickly and often at low resolution to learn as fast as possible.

Wherever you are today, you can creatively solve problems in this human-centric way. You can start small, by interviewing one customer. Get to know them – what’s their story and how does your product or service fit into their lives? There are free resources on the d.school website. You can run a beginning crash course in design thinking for your colleagues or you can go through the Online Crash Course. The books “Creative Confidence” by Tom and David Kelley and “The Achievement Habit” by Bernie Roth are good reads on the topic. Also look for opportunities to access design thinking here in Lebanon. Every time I am here, I meet more people practicing it.

Design thinking is radically shifting how we work and disrupting industries across the world. And, maybe, with a little listening and prototyping, you’ll find yourself in an imaginative storybook of your own.

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DesignSpecial Report

Taking a step back is actually the way forward

by Reina Y. Arakji
written by Reina Y. Arakji

When I first moved to New York City, I did what everyone else does upon arrival; I looked up. I took in the instantly recognizable skyline, but I still could not understand what made the city so extraordinary. It was only when I began discovering the underground scenes that I finally recognized its sources of vitality and creativity. More literally, traveling on the city’s subway system, I was quite intrigued by one signpost in particular. It was prominently displayed on platforms and trains and emphatically stated: “Sometimes to Move Forward, You Have to Ride Backwards First”.

As counterintuitive as it sounds, this approach works. New York City’s subway system is old, complex, and has many renovations taking place throughout the year. It is often more effective, therefore, to take a train that is moving a few stops opposite to your intended direction, and change later down the line to an express train which heads back in the right direction. It might sound long winded, but passengers often end up at their destinations sooner than had they taken the obvious choice of train pulling into the station.

I recall this signpost every time I read yet another article touting Beirut as the “next Silicon Valley”. Lebanon’s policy makers have decided to jump on the knowledge economy bandwagon by replicating other tech startup ecosystems, assuming that it’s the expressway to economic growth and prosperity. The city is building technology parks and accelerators such as Beirut’s Digital District, inviting prominent international speakers to our tech conferences and sending our entrepreneurs on road trips to Silicon Valley and New York City. We are also attempting to ease regulatory hurdles by offering incentives to form tech venture investment funds through Banque Du Liban’s Circular 331.

This attitude towards technology and innovation, however, will hardly move us any closer to our desired long-term economic growth or increase our national living standards. To begin with, the majority of today’s technology, including web-based and mobile products are built to capitalize upon network effects, where a slight initial advantage in the number of subscribers snowballs into exponential growth. We are building and unavoidably participating in a global winner-takes-all marketplace, where less than 10 percent of startups thrive or achieve superstar status, while the remaining 90 percent stall and fade away. What’s more, nearly all of our booming tech startups, especially those with truly global reach, will end up relocating to Silicon Valley anyway, where markets are bigger and regulations more favorable. What we are actually doing is investing in a tech startup ecosystem the returns of which do not enliven the whole economy and only accrue to the individual successful startup founders, their handful of employees, and of course their bankers and VCs.

Why are we building an ecosystem that is irrelevant to the majority of the Lebanese population and that will only grow to feed itself? What we truly need is to invest in Strategic Design, the application of design principles to realize a specific purpose. This will ensure that our actions are in fact creating the positive change we are looking for. And right on point, its methodology always starts by taking a step back, to reconsider our assumptions and reformulate our questions, before deciding on a course of action. Here are a few questions that we can start with: what would we gain by becoming the next Silicon Valley, and more importantly, what would we lose? Why are our creative minds working on competing globally when we have pressing local and regional challenges that desperately require innovative interventions? Why does our national innovation strategy involve the mere copying of another country’s best practices, instead of truly carving a niche of our own?

Ultimately, Strategic Design is an instrument of choice. On the national level, it can guide our policy makers in determining where and how to intervene, what incentives to offer and what impact to seek. On the industry and individual business level, it can facilitate the uncovering of opportunities, which, incidentally, may or not may involve technology.

It is essential that we situate our economic activity in our genuine cultural identity and creative impulses, and that we build economic clusters around what makes us unique and distinctive. Our comparative advantage, on a global level, is obvious. Look no further than the fashion at the Oscars’ red carpet or the winning creative communication campaigns at the Cannes Lions awards show. But we need not focus exclusively on making international headlines. Addressing any of our economic, social and ecological challenges through innovative interventions will invariably boost our employment levels and increase our standard of living. Why attempt to be the next Silicon Valley when we can be an original Lebanon?

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Tourism and Hospitality

Beirut restaurants adapt for Ramadan

by Nabila Rahhal
written by Nabila Rahhal

Ramadan and the Hospitality Industry

The holy month of Ramadan has a significant economic impact on the hospitality industry, in terms of both hotels as well as food and beverages (F&B) venues. This impact can be either positive or negative, with some venues seeing an increase in footfall and others a sharp decrease. Executive sat down with various stakeholders in the hospitality industry to find out about the impact of Ramadan on their business.

Hotel Occupancy during Ramadan

During Ramadan, some hotels Executive spoke to reported a drop in room occupancy despite the holiday falling in the usually busy summer month of July. Majed Najjar, Cluster Food and Beverage Manager at Lancaster Plaza Beirut, a five star hotel in Raouche, explained that during Ramadan people don’t travel as much and prefer to stay in their home country, causing an almost 20 percent drop in occupancy across the globe. “In Ramadan, travel is mainly only for urgent business. This is why we hotels rely on the F&B department during that month,” says Najjar. He added that this drop is somewhat compensated for by the increase in occupancy which accompanies the week or ten days of the Eid holidays, with even some Lebanese who reside in Lebanon opting to spend a few nights in a hotel as a treat.

Impact on nightlife

Beirut’s many bars and clubs are the most negatively impacted by the onset of Ramadan, a month where, in addition to fasting, practicing Muslims usually abstain from drinking alcohol for the whole month. According to Toni Rizk, CEO of TRI Concepts, a bar restaurant management company operating several bars in Beirut, the percentage drop in business during Ramadan differs from area to area. Hamra Street’s bars experienced an almost 60 percent drop in footfall, Uruguay Street’s bars experienced a 40 percent drop and the bars in Mar Mikhael, an area still considered among Beirut’s most active nightlife destinations, experienced an approximately 20 percent drop in footfall.

“There is nothing we can do in terms of offers or promotions to compensate for this loss during Ramadan since those who don’t drink in Ramadan are doing so for religious beliefs and not for other factors. We just wait the month out and prepare for a hopefully very active Eid period which was the case this year,” says Rizk.

International cuisine restaurants

Rabih Nasrallah is the Operations Manager at Verdun Star, a compound of three restaurants which include Ward El Sham Lebanese restaurant, Caprice, an Italian and sushi restaurant, and Couch Potato, a children’s entertainment center and diner. Nasrallah noted that the footfall for non-Lebanese cuisine restaurants during Ramadan is low, with a drop of 60 to 70 percent as compared to the other months of the year. Nasrallah explained that Verdun Star chose to shut Caprice for Ramadan rather than incur the loss of a slow month, and instead use Caprice’s outdoor terrace to have more seating capacity for Ward El Sham which remains as popular during Ramadan. “Very few people choose to have an international Iftar before the last week of Ramadan, if at all, when they start getting bored of Lebanese cuisine,” says Nasrallah.

In line with Nasrallah, Najjar explains that Prime 18, Lancaster Plaza’s steakhouse and cigar lounge, closes during Ramadan because it is associated with wine and tobacco, for which there is little ambiance and even fewer clients during Ramadan, especially since the hotel is located in the middle of Beirut and their F&B activity is centered around Ramadan during this month. “We also prefer not to have Iftar there to preserve the mood and quality of the venue which is more European with wine bottles and the like on display,” adds Najjar.

Mary Choueiry, the director of marketing for the Phoenicia Beirut, says that their outlets, which don’t offer Iftars, such as the sushi restaurant Wok Wok or the Italian restaurant Caffe Mondo, have experienced a slight decrease in activity which is normal for the month of Ramadan. Some international cuisine restaurants, such as Verdun’s Shogun or Zaitunay Bay’s Al Forno, have tried to compensate for this anticipated decrease in their business by tailoring and marketing an Iftar formula created out of their normal menu, including a soup and salad with a main dish and dessert. Al Forno’s manager on duty says this formula achieved success during the last two weeks of Ramadan when people were perhaps looking for a change from the dishes they could eat at home.

Lebanese cuisine restaurants and Iftars

The most well performing venues in the hospitality industry during Ramadan are the Lebanese cuisine venues which offer Iftar formulas. “We are doing well, there is a rush to restaurants and this is especially good in Ramadan since we rely on these two venues (Daoud Basha and Fume Bar) to compensate for the closure of the steakhouse during that period,” says Nasrallah.

Ward El Sham, which extends to a capacity of 230 people when including the Caprice terrace, was fully booked every night throughout Ramadan, and especially during the last week, according to Nasrallah. “What is interesting is that usually it takes ten days for restaurants to start filling up during Ramadan as people tend to have their Iftars at home at first but with Ward El Sham, it took us three days before we started getting very busy,” enthused Nasrallah, who explained that even though it is only one month, Ramadan compensates for the slump in their other venues, especially since they have a set formula for all customers.

Choueiry also says they were fully booked for Iftar at Mosaic, which has a capacity of 330, during the whole month of Ramadan with a peak in reservations towards the second week of the month.

Corporate Iftars

Aside from the casual gathering of friends and family for Iftars in restaurants, the bread and butter of the hospitality industry lies in the corporate Iftars which companies host for their employees and clientele during the holy month.

Choueiry says 60 percent of the Iftars at Phoenicia Hotel are corporate ones held at their banquet space with the number of guests reaching up to a thousand. Najjar says Lancaster Plaza has two banquet halls, one with a capacity of 350 and the other with a capacity of 150, in which they hosted 18 corporate Iftars this Ramadan, mainly for NGOs and pharmaceutical companies, who he says booked a week before Ramadan began.

For smaller corporations or bank divisions, restaurants are seen as more intimate settings. “We had corporate Iftars mainly for the banks in our region (Verdun) which have small groups of maximum 40 people. When a company has a hundred employees or more they usually prefer to go to hotels where space is guaranteed,” says Nasrallah.

Prepping for the Big Meal

Whether for a small group or a corporation, preparing for Iftars takes a lot of patience and the ability to remain cool under pressure, according to the restaurateurs interviewed.

“The most difficult service anyone can work on in the hospitality sector is the Iftar service because what we usually do in three hours during daily operations when guests arrive, sit down and have a leisurely meal, we have to do in forty five minutes during Ramadan,” says Najjar, who added that there is a lot of pressure when handling Iftars as people should all be served and eating at the same time.

Choueiry says Phoenicia Hotel’s executive chef starts preparing for Iftars and Souhours four months in advance with the selection of the appropriate menu.

Overall performance of Ramadan 2015

On the first day of Ramadan 2014, the suicide bombing incident in Duroy Hotel put a damper on people dining out in hotels. “The first ten days of last year’s Ramadan were a real challenge also because the World Cup was taking place at the same time and people were choosing to go out for that instead of for Iftar,” adds Najjar.

This year, all those Executive spoke to said they have had much more footfall and corporate Iftars during Ramadan than they did the previous year. Nasrallah says Ward El Sham, which is in its second year of operation, has 10 to 15 percent more footfall than it did last year: “this year we have a stronger reputation and many people tried us once and came back many times or for special occasions, which also gave us a push,” explains Nasrallah.

Najjar boasts an almost 100 percent increase in footfall for corporate banquets compared to last year, due to most of these events being cancelled last year after the bombing. He says that the restaurant Daoud Basha has 25 percent more footfall than last year. “It was a very good Ramadan for dining out; a very good month for our industry,” he concludes.

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Economics & Policy

A matter of perspective

by Executive Editors
written by Executive Editors

During a long, wide-ranging exit interview, departing UK Ambassador Tom Fletcher tells Executive and other journalists that over the past four years, the British government has increased 100-fold the assistance it provides to Lebanon, from GBP 2 million per year to GBP 200 million.
The massive increase in aid money was triggered by the Syrian refugee crisis, but Fletcher notes that host communities are increasingly getting their cut. As he’s known for doing, the ambassador also lauded Lebanon for hosting so many of its neighbors.

Mr. Ambassador, as you have told us, the United Kingdom has greatly increased its humanitarian assistance to Lebanon. We came here to mainly discuss economic issues with you but let us first ask how you view the problem of growing unwillingness to admit new refugees?
The important thing for us is that the most vulnerable people are getting help, but it is also important that we have a partnership with the government because we do recognize how difficult it is here. So we try to find a pragmatic way through, but we also try to hold everyone to their humanitarian obligation, even though it’s not easy. If I’m honest, it’s very difficult to lecture people about keeping their borders open.

Why?
Because not every [country] has their borders open.

But you didn’t close Scotland.
[Laughs] No, Scotland’s open for business. And we sell, by the way, more Scottish salmon, more Scottish whiskey, here in Lebanon, per capita, than anywhere in the world. I was actually in tears the morning of the referendum, when the Scots voted to stay. It was a very emotional moment for all of us, but I was happy as well for our trade stats, because we rely on exports. We also sell more Jaguars, Bentleys and Princess Yachts, per capita, than anywhere in the world. And Panadol, bizarrely. There are 250 million panadol tablets sold here every year.

You’ve said trade between the UK and Lebanon has doubled in your four years, and looking at the Panadol stat, is there any re-export going on?
The model that works well here is not just thinking that it’s trade between the UK and Lebanon, but that it’s trade between the British and the Lebanese. So what we’ve tried to do is connect people who want to be connected. If you’ve got a guy making a new type of spoon in Belfast, we’ll connect him with a Lebanese network that will sell those spoons in West Africa, South America and so on. Our trade team compiled a list of Lebanese distributors who want new whiskey brands. As new whiskeys come to the market, they’re saying, ‘We want to be the distributor of that whiskey.’

Your mandate is to help British exports to Lebanon. What about the reverse, are more Lebanese products now headed for the UK?
It’s not explicitly part of my mandate, but I’ve always tried to encourage, for example, the Lebanese wine industry to get a good foothold in the UK. And it’s doing very well. It’s still quite expensive, at the UK end, but Lebanese wine has a real cache. Lots of agricultural products, nuts and so on, are also doing really well. But I guess the one where I’ve really tried to help is just on improving Lebanon’s general image because in a way, so much depends on that. I’ve been consistently trying to provide an image that doesn’t just focus on the bombs and the terrorism and so on.

Where does the UK Lebanon Tech Hub fit in?
Let’s see in three years’ time [about that].

But it’s only a two-year initiative.
I reckon it will run longer than that. It’s got legs. I think the two-year phase will be a government to government phase as we create that framework, and then we just let them go.

Where do you see the future of entrepreneurial collaborations between Lebanon and the UK, is it more outsourcing from the UK to Lebanese suppliers; knowledge transfer; entrepreneurial spirit infusion into Nordic development plans? What’s the formula?
All of the above, really. One thing I was struck by when I went to see the Tripoli Entrepreneurs’ Club up there, [was when] they said all we need is an internet connection and a room and we’ll do the rest. They said that every couple of months guys come along and smash their internet connection. So it’s as simple as that. There’s a kind of dividing line there, and they’re very much on the front line, really, of whether this region sinks or swims, and I would back them. I’m never going to be a tech entrepreneur or really understand the cutting edge of innovation, at all. When I started here, some people said to me, ‘you’re too young to be an ambassador.’ And I now realize that I’m probably too old to be an ambassador here because a lot of the future growth is coming from people who are in their early 20s.

How are you treating the anniversary of Sykes-Picot? The way you see it, has all of this past been digested? Have we overcome history?
It’s interesting you should raise that. I was back in London last week with all the ambassadors from the region and it’s a subject that I brought up. I think it’s fair to say that any school child in this region, whether they’re learning in French or in English, knows these [terms like Sykes-Picot]. [By contrast] only a very small percentage of school children in the UK and France will have that same sense of significance of these names and events. And particularly now, people across the region can see, for better or worse, that some of the lines that were drawn in the sand are disappearing.
I don’t think that you’re going to see Britain or France dwelling on these anniversaries in a big way. For me it’s part of history but I also realize it’s still part of people’s lives here especially when they worry about what’s happening to those boundaries.

Turkey didn’t exactly popularize commemorating the Armenian genocide this year so it would not be unusual to try and neglect or deny the Sykes-Picot agreement, with yours as one of the most civilized countries in the history of mankind? Don’t you want to take a slightly different approach of restitution and reconciliation?
Yeah, and we’ve always tried here to draw on the lessons of the Northern Ireland experience, to try and see what we can learn from reconciliation, coexistence, transitional justice and so on. I won’t be here for these anniversaries. If I was, I’d like to think we’d come up with a creative way to have a different conversation about reconciliation, the role of the state and so on in the region. I hope we can find a way into that conversation. We really do need the Syrian state to survive, the Iraqi state to survive. These are very important issues to everyone around here.

So in your view we cannot bury the nation state in the Middle East?
Yeah. It’s the least bad model that we have at the moment.

Turning to more hands-on issues in your future, do you want to become the Tony Blair of entrepreneurship in the Middle East?
Did you mean that in a positive way?

Well, Mr. Blair made it a personal mandate of peace building in the Middle Eastern development after leaving office. You mentioned at a EuroMoney conference in June that you might move more into entrepreneurship. Can you tell us more about that?
I definitely wouldn’t put myself in the same category as Tony Blair.

Entrepreneurship is a little bit smaller than peace building.
I don’t have plans to focus personally on entrepreneurship type work but who knows what will happen. My focus will probably be more on education, considering that there are millions of kids out of school, and trying and get those kids in school. That’s important.

As a private citizen with the credentials of former ambassador, you have a privileged position. From your point of view, is that a good economic prospect for Lebanon?
I won’t be hustling business, but there’s one area where I think I can help. If someone pops up in Rio representing Lebanon, [the Lebanese expats will wonder] are they March 8 or 14, are they Armenian or Druze – they’re instantly labeled in a way that often can undermine their effort. So in a way it’s strange, sometimes it’s easier for a foreigner to come in and look around and say look at these amazing people. I’m neither March 8 nor March 14, or anything else, just pro-Lebanese.

Did you find any Lebanese heritage in you somewhere from the time of the crusades?
We’ve all got some Lebanese in us haven’t we? Although I don’t want to bring up the crusades either, Sykes–Picot and Balfour were bad enough. We all came through here at some point but no, I haven’t discovered any direct Lebanese, the Fletchers can’t trace our lineage back that far.

What would be your advice to your successor, not in the diplomatic briefings that you can’t talk to us about, but in the experience of life and family life in Lebanon?
There’s a number of us [ambassadors] who are all leaving at the same time from so many of those countries that have real interest in backing Lebanon’s stability. I hope they’re able to continue this idea that there is not a conspiracy against Lebanon. There is a conspiracy in favour of Lebanon.

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DesignSpecial Report

Sharing Lebanon’s artisanal treasures with the world

by Executive Editors
written by Executive Editors

Challenging economic times have left Lebanon’s smaller manufacturers in a precarious situation, with few potential customers in the local market and a lack of government support beyond a few free zones and tax breaks for exports, meaning foreign markets are difficult to reach. Enter UNIDO (United Nations Industrial Development Organization), which has launched a pilot program to support manufacturers in Lebanon’s creative industries. Taken as a whole, UNIDO says these industries contributed five percent to Lebanon’s gross domestic product in 2010 – the latest comparison available, and accounted for four percent of the national workforce that year. But there is potential for more.

Design, UNIDO says, is a useful tool for further economic development and job creation. Their plan is to build a system of support, starting with artisanal jewelry makers in the Beirut suburb of Bourj Hammoud and furniture makers in Tripoli, Lebanon’s second largest city. “They both are suffering – Tripoli is suffering very much, but also Bourj Hammoud – because of the lack of tourists, especially Gulf tourists,” says Giulio Vinaccia, an industrial design consultant leading UNIDO’s program. Matched with Lebanese celebrity designers, UNIDO will instill business prowess among artisans and, with buyers already in place, facilitate access to European markets.

Melting pot of creativity

Harnessing Lebanon’s creativity requires a structured approach; “Creativity now is a science, it has a methodology and has a logic to follow,” says Vinaccia. As part of a larger program amongst countries of the Southern Mediterranean, UNIDO’s initiative for Lebanon is to scale up artisanal production, starting first with the jewelry and furniture makers.

There is no shortage of creativity amongst Lebanese jewelry and furniture designers. “Lebanese are born with hundreds of different stories. They know the traditions of Mohammed and of Armenian design. All that is fantastic for being creative, and that’s why it’s so good in Lebanon – it’s a melting pot. This is the perfect environment for creativity,” he says.

Other creative industry clusters have not achieved the success touted [see overview on page 28] in part because those producers did not have markets prearranged to sell their products. Seeing this, UNIDO considers it a priority to establish a market for designers to sell their goods. Vinaccia tells Executive that Tripoli’s furniture makers will be sending tables to Habitat, a French retailer of household furnishings. “We went to Paris, we made the deal. They said build us some prototypes, check the quality, send them to us, and we’ll put them in stock. This was the first homework I gave to them [furniture makers]. For them it’s so easy, no? But they need to understand how to arrive at mass production and how to maintain the quality.”

Vinaccia points out the need to professionalize Lebanon’s designers. “You need to be a mix of manager and designer with a toolbox of organization, business development, and marketing skills,” he says. “To that end, UNIDO includes a capacity building phase to its program which includes matching amateur designers with celebrity mentors in the field.” Being linked to big Lebanese names – designers like Nada Debs, Vinaccia says – will help open doors for the artisans, particularly once their products reach the market.

Finally, to maintain the technical knowhow of artisanal craft and to introduce new design approaches and technologies, UNIDO has hooked up with Académie Libanaise des Beaux-Arts (ALBA), a local design school. This, Vinaccia says, brings UNIDO’s program full circle by linking students from the academic environment with designers in the workshop.

National identity

“You need to understand that design is no longer the dress of the products – it is the soul,” says Vinaccia. Products nowadays, he says, need to be as aesthetically pleasing as they are functional. But they also need to tell a story that impresses the buyer with a unique image of the country that produced it.

In the heat of the United States’ global trade negotiations, geographic indicators (GIs) – names for products that correspond specifically to location of origin – stand out as a point of contention. GIs appeal to national identity and the Europeans, in negotiating the Transatlantic Trade and Investment Partnership with the Americans, argue that regional foods like Greek feta or French champagne should be legally protected as intellectual property. The idea makes sense – in many cases GIs can be identified with historic connotations to their nation of origin. This means that wine produced in Napa Valley, for example, has brand name power and is thus quite lucrative for farmers and producers.

UNIDO’s idea to nurture Lebanese jewelry and furniture is similar. Tying national identity to the products would develop brand name recognition – ‘made in Lebanon’ is a powerful sell, particularly to the expatriate community yearning for a piece of home. But it is premature to think they could be considered geographic indicators, and UNIDO does not anticipate branding protection as part of their strategy.

The history of producing jewelry in Bourj Hammoud and furniture in Tripoli, however, is real, and for some in UNIDO’s program, like Hadidian Jewelry, the business stretches back generations. The jewelry and furniture trades are symbolic of their respective neighborhoods, which Vinaccia says is a selling point.

Like Lebanon’s previous clusters, the UNIDO program is only possible through external funding – the European Union in this case. In the past, once funding dried up similar programs were discontinued and participants were left to soldier on with no one facilitating access to buyers in foreign markets. The UNIDO cluster project is still in its infancy, but if the model for the jewelry and furniture makers proves successful, the plan is to expand the program to other clusters, Cristiano Pasini, UNIDO’s country representative tells Executive. “We are doing something very meaningful for these two clusters – I’m sure we’re going to scale up.”

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Tourism and Hospitality

It’s vacation time!

by Nabila Rahhal
written by Nabila Rahhal

The summer season, when schools are off for two months and productivity at work slows down, is usually seen as the best time to leave one’s home country for a well-deserved break and discover new cities around the globe.

Whether booked independently through airline search engines or planned as an all-inclusive package through travel agencies, leisure travel is often anticipated by travelers as the high point of the year, and by businesses as an important source of revenue.

In Lebanon, the idea of a vacation abroad is becoming more and more common, says Nakhal Travel’s general manager Elie Nakhal, who sees this as a positive sign for travel agencies.

Summertime and Lebanese travel agencies

According to the travel agencies interviewed for this article, the summer season traditionally constitutes between 40 and 60 percent of their annual turnover in terms of leisure travel. “In the summer, the leisure business increases at the expense of business travel, while the opposite is true in winter,” says Nakhal, “though leisure travel still constitutes a bigger part of our business with roughly 60 percent.”

Johnny Modawar, marketing manager at Wild Discovery Travel and Tourism, explains that many Lebanese only travel during the summer vacation, as opposed to traveling during other school or national holiday periods. This concentrates a lot of holiday traffic across the same period from the end of June to mid-September. Some people, especially couples and those with no children, postpone their trips until mid-September onwards to avoid the crowds in the traditional vacation spots such as Mykonos, Greece or Ibiza, Spain. “Spa offerings are highly booked in September and October, mainly by couples, and in hotels that are known for their spas or regions that have curative aspects, like Evian in France,” says Modawar.

For the past few years, the month of Ramadan has been falling during July, which has delayed the typical vacation time until the approach of Eid, making August the peak travel month for 2015. “Usually, people who fast don’t travel during Ramadan so we consider it a low season. Speaking for myself and others in the business, we don’t start our charter plane operations until Eid onwards with August being the main month for vacations in Lebanon and leisure travel decreasing by the end of September,” explains Selim Boutros, director of Kurban, a travel agency in Lebanon.

ONLINE VERSUS TRAVEL AGENCY

The case for the live agent versus the online website

With the popularity and ease of use of online travel booking sites, it seems that many are foregoing agencies for the “do it yourself approach” in order to benefit from last minute discounted prices or other special offers. Yet, travel agencies insist that they bring added value to travel planning and provide services or reassurances that online booking sites can’t.

“It is true that online booking has become very popular, but the role of the travel agent remains necessary due to many factors. Today when you book online there is no one to really advise you on the kind of hotel you want and even if you do check the online reviews, it is not the same. We as travel agents, and based on our past experience with our clientele, are able to advise clients on which hotels or destinations suit them best,” says Nakhal.

Another reason Nakhal gives to justify the need for travel agents is that “everything is good until something goes wrong and when that happens, travel agents have a role to help in crisis management.” In his opinion websites are impersonal and follow guidelines blindly, so if a traveler books a trip online through a booking engine and something goes wrong, there is no one to negotiate with. He gives the example of how, when the July 2006 war took place and Lebanon’s airport closed for 30 days, Nakhal was able to reimburse the full amounts paid for planned trips, with no cancellation fees, to their clients, while those who had booked directly through Nakhal’s partners (such as Costa or Club Med) were not able to get their money back. “We are their partners and they know we are serious. The rules online are strict, and there is no room for maneuvering,” he explains.

Modawar explains that the role of the travel agent is especially viable in Lebanon where people are more used to having services provided for them rather than doing things for themselves. “Lebanese still like having a personal contact or someone to be able to refer to, and would pay extra to guarantee satisfaction,” he says giving the example of Wild Discovery, which plans to launch two more offices in Lebanon in 2016 as evidence of how big the demand for travel agencies still is in the country.

Tech savvy travelers

Yet, the prevalence of all the online travel booking sites cannot be denied and although the travel agents interviewed for this article do have an online presence, they say that people still tend to book their trips at the physical agency.

“Today what we are facing in Lebanon is, from our experience, that people are still visiting our agencies and taking our offers but also having a look online to compare and benchmark prices. The internet lacks the complete package of airlines, hotels and programs but instead has pieces that you blend on your own. This type of travel has its clients but these are not our core clients who are people who are still coming for our agency for the consultancy and expertise,” says Modawar explaining that this trend of online browsing and benchmarking places a positive pressure on them as agencies to always be up to date on the best hotels and deals.

Boutros gives the example of Go Kurban, their travel booking website which he describes as a “dynamic catalogue and online agency”, saying that in the five weeks since they launched (at the time of the interview late June) they have had more than 21,000 original users and 25,000 visitors but that people have yet to adopt the website and actually book online instead of just browsing the packages. “People are still afraid of online payment but I think it is just a process of adoption and we will get past that,” explains Boutros, enthusing about the plans they have to increase their online presence which include a new mobile website and a regional expansion of what he calls a “hybrid online agency”.

The early bird catches the worm

While Europeans and Americans tend to plan their leisure trips almost a year in advance, benefitting from special offers and discounted trips on hotels and airlines, the Lebanese are last minute planners, Boutros explains. “Previously, our flights didn’t fill up to maximum until two weeks before departure, which is really last minute. Starting from three years ago, we are seeing bookings coming in earlier and earlier so this year we were selling Easter packages along with our summer packages,” says Boutros, despite admitting that the bulk of their reservations still come at the last minute.

Choice of destinations

While Lebanese travelers may book their vacations at the last minute, the travel agencies charged with planning their vacations begin their work for the summer during the previous winter. “We choose to launch new destinations according to market segmentation and product strategy. First, we identify who is our target (profile, age bracket, purpose of the journey, types of needs to answer: honeymoon, family, adventure, relaxation trips etc.) We analyze the potential of this new destination to attract people then we build the product looking at the main interests of the destination, the airline connections out of Beirut, the leading hotels and resorts to partner with etc. We have our proper methodology when selecting hotels and many factors are to be taken into consideration such as the hotel’s location, amenities it offers to specific profiles such as families or honeymooners, hotel overall status and recent renovations and obviously its rates and flexibility towards clients,” says Modawar.

From a quick glance at street billboards, it is easy to see that most Lebanese travel agencies provide the “classic” destinations, namely the Turkish islands Bodrum and Marmaris, and the Greek islands of Mykonos or Santorini.

Boutros explains that the Turkish islands are the most popular destinations among Lebanese, chiefly because no visa is required to go there which presents a significant drop in cost if travelling with a family, in addition to saving time on the inconvenience of visa appointments. “Marmaris is our most popular travel destination because it is budget friendly and suits everyone, from families to young couples, with packages starting at $400,” says Boutros.

Indeed, the recent financial turmoil in the southern Mediterranean has an impact on holiday makers. “Greece is quite affordable this year because of the low Euro rate in general and because of the country’s economic situation [with the European Union] in particular,” says Modawar, who adds that hotels are giving guests more flexibility e.g. guests are no longer required to book for a full week, and instead can enjoy just a few days, which they couldn’t do in 2014. Modawar considers Kalamata, in southern Peloponnese Greece, as one of this summer’s new destinations by Wild Discovery, with the Costa Navarino Luxury Hotel Resort that presents a capacity of more than 700 rooms and amenities suitable for families and couples, as its main attraction.“We selected it in the winter and we arranged it with our airline partner Aegean Airlines to have direct flights there.”

It’s a chartered world

The destinations which are relatively new to the Lebanese market are promoted by travel agencies with the creation of direct chartered flights. “Wild Discovery charters its own planes only with national airline companies such as MEA, Croatia Airlines, Aegean Airlines (national carrier of Greece), for quality and safety measures. The distribution channel of our charter flights is divided into two parts: either we sell these seats through Wild Discovery’s nine branches, meaning to our own clients, or we sell these seats through our network of subagents we deal with in Lebanon so they fill our planes with their own clients. Smaller travel agencies cannot charter planes on their own. The cost of operation, financial exposure and filling capacity is naturally very high, which is why they would rather buy from us,” explains Modawar.

Chartered planes make summer traveling more convenient and less time consuming. Nakhal cites Vienna, Austria, and the Czech Republic as the ‘new’ destinations they are promoting this summer, through chartering direct flights to these places. “This makes it much more convenient for travelers who no longer have to take multiple connecting flights, which is why we consider this a creation of a ‘new’ destination, as chartered planes really encourage people to travel to these cities”. Nakhal explains that during last summer they chartered direct flights to Dubrovnik, Croatia, and Montenegro. This saved travelers from having to take three connecting flights to get to these places, and thereby opened a new market for these destinations, attracting both the high and medium end travelers.

According to Boutros, this summer offers a lot of new destinations as “chartered [flights] are going everywhere.” For example, Barcelona is fast becoming a popular travel destination this summer partly because Kurban chartered Vueling Airlines to travel twice a week from Beirut. Kurban has also opened up Belgrade, Serbia, as a new destination for the Lebanese this year through collaboration with their airline partners.

The lodgings plan

In parallel to planning chartered flights, travel agencies secure hotel rooms at the selected destinations early on as well. Boutros explains the process by highlighting their choice of hotels, which is based both on the selected destination and on their experience in past years. “Most of our rooms for the summer are prepaid at the beginning of the year and it’s an internal strategy as to whether we are conservative or aggressive in the number of rooms we get,” says Boutros, giving the example of Mykonos, which he says is tricky as it’s a very popular destination among travelers yet has few hotels. This causes a problem for many agencies, which are frequently left with more chartered flights than rooms.

Modawar also speaks of strategy when it comes to booking rooms, saying that agencies have to take risks to ensure availability before promoting the destination: “We fly to Mykonos twice a week so we have to guarantee room availability in this period, therefore we lock them in beforehand. These destinations are also in high demand in Europe and since we all take vacations at the same time (July to August) it is even more important for us to be ahead with both airlines and hotels,” he says.

The cost of traveling

The generally dismal economic situation in Lebanon and the lower purchasing power among most Lebanese has taken its toll both on the choice of vacation and on travel agencies. “From the five star clients to the low income ones, the number one factor for all our clients is cost. I wish I could say value but it is more price: everyone is after a better deal,” says Boutros.

Modawar explains that the situation in Lebanon is causing agencies to promote quality travel but at very competitive prices, as not everybody can afford to go to luxurious destinations like the Caribbean or South Africa. Places like Croatia, Turkey and Greece have become a necessary part of a travel agency’s portfolio. “We are not always selling the 600 dollar packages but we have to have them,” he explains. Travel agencies do say that, while many of their more wealthy clients may skimp on the airline tickets, they tend to splurge on accommodation once they get to their destinations. “Our products cater both to the high end and mid income level markets. Our packages attract everybody but their choice of accommodation, number of nights, and specific cities reflect their income level,” says Nakhal. Whether on a budget or five star trip, it seems that travelling for vacation has become part of many Lebanese families’ summer plans, and travel agencies can subsequently accommodate and benefit from all price ranges.

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