White Beirut’s website features a video which begins with news reporters announcing the various negative political events of this summer and Gulf country travel warnings for Lebanon. It then rolls on to the song “War, What is it Good For?” and shows photos of people clubbing at White and ends with the statement “This is Beirut. We Are Waiting For You.” Indeed, in his last stint in Beirut on June 2012, the comedian Maz Jobrani once again poked fun at the Lebanese’s love of partying despite any circumstances. Will this be enough to make up for the geopolitical situation of the summer?

Rooftop venues have become a staple of Beirut nightlife, despite the heat and humidity, and there are several several high-end rooftop clubs and bars to choose from. “One of the causes for the decrease in our business in summers is the wide choice of rooftop venues that Lebanese opt for,” says Olivier Du Parc, partner in Behind the Green Door club in Mar Mkhayel. Yet, it seems that rooftop venues were also planning for a dismal season.

This summer, Skybar is only operating four days a week (Thursday and the weekend) when last year it was open all week long. According to Abraham Helal, Media Manager at Sky Management, they adopted this strategy in anticipation of an imperfect season, but are actually “fuller than last year” and are doing well compared to the local market. He attributes this increase to less operating nights, which created a situation of scarcity and condensed their clients into four days, instead of having them spread over the week.

Skybar fans have noted, to their delight, that it is much easier to book a table this year and say calling around two weeks in advance is enough, as compared to last year when it seemed like tables were booked months in advance.

White Beirut is also closed Mondays and Tuesdays, a plan they adopted from the start of the season this year. “We usually adopt this strategy of closing on two weekdays when Ramadan begins,” says Reem Beydoun, spokesperson for Add Mind, which owns White. “But since Ramadan now comes in the middle of the month, and we usually have less people on weekdays, we decided to start off the season by closing those two days.”

“We are relying mainly on the expats and the local market, and are fully booked on Thursdays and the weekend with a considerable waiting list,” she adds. Beydoun also speaks of Iris Cocktail Bar and Restaurant, owned by Add Mind as well, saying since their clientele are mainly Lebanese, the tourist warnings have not affected them.  A bartender at White says the decrease in Arab tourists this season has affected them as staff. “Arab tourists are our biggest tippers, and last year I used to make more than half my salary through their tips,” he says. This year, their absence is translated in a decrease in tips and less people than last year, especially on Wednesdays and Sundays, he adds.

Effects on the bar scene

A stroll in Hamra on a late Friday night can lead you to believe that all is normal on the street, yet reality is different. “We have a 40 percent decrease in sales and clientele compared to last summer,” says Danny Khoury, owner of Danny’s Bar in Hamra. “We are directly affected by the Arab tourist bans,” he explains, noting that while his establishment is not a large draw for Gulf Arabs, it attracts those who want to escape the venues that are. Khoury also cites the increased number of bars in Hamra as another reason for the decrease in percentages: “People have many bars to choose from but there are not enough people to go around, as the tourists and expats avoided Lebanon this summer.”

“The events in Syria and the internal political situation are also causing people to be scared to go out as much,” he says, attributing only 20 percent of the decrease in business to Ramadan, noting this was the percentage decrease during the holy month last year.

This situation is repeated in Mar Mkhayel area, where bar-culture has been fast developing. “In anticipation of a bad season, we took the strategic management decision to operate only on weekends this summer,” says Green Door’s Du Parc. “We open the bar one night, and on the other, we are organizing outdoor festivals in Sporting Club.” He attributes this situation to several factors, such as the local clientele frequenting rooftops in the summer and there being fewer tourists this season. “The festivals in Sporting are compensating for the losses we might have had this season,” says Du Parc.

Summer is the season for going out, and the Lebanese have developed the reputation of being die-hard party lovers, but this does not seem to be enough to save the nightlife industry this season. Still, the summer is not over yet, and with the Eid festivities coming up next month, there might still be time to salvage the situation.

Every summer, people flock to the towns and remote areas of Lebanon for the festivals. Local residents anticipate those events for the publicity they bring to the area and for the obvious economic benefits to the restaurants and hotels there. This year, however, was not like the last. Ehdeniyat International Festival, Ehden’s annual summer festival, for example, was cancelled.

“We were forced to take this decision a month ago,” says the festival’s media representative Joelle Hage, “when our international artists cancelled their contracts due to their worries about the unstable situation in North Lebanon.”

Fortunately, since the festival was set for August no tickets were sold yet, but months of preparation went to waste. While some of the planned events like the Free Children’s Village will still take place, says Hage, the budget is now much lower and only local residents are expected to attend. Hage explains that Ehdeniyat is organized by the nongovernmental organization Al Midan — which focuses on health, rural development and environmental conservation — as a fundraiser, with all profits going to the NGO, while the event has also brought spinoff economic benefits to the hotels and restaurants of the area.

Lebanon’s unpredictable political situation might have also caused a decrease in attendance at festivals in South Lebanon. “I know of many who were reluctant to attend concerts in Beiteddine as they were worried the roads would be blocked on the way to, or back,” says Bernard Farah, onwer of Diwan Al Farah Restaurant, who annually operates a snack stand on the grounds of Beiteddine as he remarks on the more somber mood of this year compared to 2011’s high spirits and full houses.

Vacation hotspots cool down

The decrease in tourists this year also affected the festivals, with Abdo Hussein of Virgin’s ticketing office estimating that only 10 percent of the tickets they sold went to non-Lebanese. Hala Chahine, organizer of Beiteddine Art Festival, says it is the norm to have more Lebanese than foreigners attending the festival. “Annually, we usually have 20 percent Arab attendees,” said Chahine in early July, “but we have not felt their presence yet this year.”

While Elga Trad, a Baalbek International Festival Executive Committee member, admitted that Baalbek Festivals are not selling as well as last year, she refrained from attributing this to one specific reason.

“We are understandably affected by the political unrest of the region, but we are doing better than we expected considering the situation,” says Latifa Lakis, organizer of the Byblos International Festival. She reported in mid-July that they had sold more than half of the available tickets, with BB King, Kadem al-Sahir and Snow Patrol, all since selling out.

Surprisingly, according to Hussein, the Virgin ticket office — which handles most festivals and large events in Lebanon — has seen a 30 percent increase in ticket sales this year from last year. But, he adds, there were about twice as many performances last year.

“When you consider how many events people had to choose from compared to last year and how many tickets were brought, you see this is actually a bad year for festivals,” he points out. “Due to the wide range of choices and the economic and political situation, we noticed people were selective in their purchasing.” Some shows have sold out, says Hussein, while others were barely attended. That may not be surprising given that this year only 57,000 tickets were sold at the three largest festivals (Byblos, Baalbeck and Beitedine) compared to last year’s 104,000.

Trad points out that festivals were overlapping this summer, as most organizers wanted to finish before Ramadan, which forced people to pick between concerts.

Paying for playing

All organizers interviewed said that their budget comes from three sources: sponsors, ticket sales and the Ministry of Tourism’s aid. According to Chahine, 70 percent of the Beiteddine Festival’s budget comes from ticket sales, 29 percent from sponsors and 1 percent from the tourism ministry. Baalbek Festival’s main support comes from sponsors and partners, says Trad, adding that the cost of sponsorship spots start at $10,000 and can vary depending on whether the sponsor wants to be a partner, or sponsor only one performance. Lakis believes festivals have limited profitability and are done for more cultural value than monetary gain. She adds that after paying the numerous expenses, whatever festival profits exist are largely reinvested into planning the next year’s event.

To be eligible for ministry support, festival directors must apply to the Ministry of Tourism, which then decides the amount, explains Michel Habis, advisor to the Minister of Tourism. He adds that depending on the location, how well established the festival is and the caliber of performers, support can range between $2,333 for smaller events to $332,000 for highly reputable showcases. Habis says the ministry aims to support all festivals due to their touristic value, but that it would not be fair to give all festivals the same amount.

The tourism ministry’s aid is consistent but late, agree Lakis and Chahine. Chahine explains that each year, they take loans from banks to cover for the delay in the government’s support, and that banks are used to this and know the support will eventually arrive, albeit some two years post-dated. Habis says he is aware of the delay and the loans the festival directors take, but says the issue lies with the Ministry of Finance, as the tourism ministry signs their support of approval at the right time and hands it over to them, after which delays are beyond their control.

The festival season is almost over, and as festival goers contemplate their favorite performers of the season, fair directors are busy balancing their books and wondering what talent they might be able to bring in next year. The available roster for 2013 may, however, have more to do with the geo-political situation swirling around Lebanon than the prestige of the event or the amount they can offer for artists to come, as the performers’ need, before anything else, a crowd to play for.

The vitality of Lebanon’s economy is intrinsically linked to the annual influx of tourists laden with their foreign coin. It is little surprise then that the vagaries of this temperamental sector play a large role in determining the national mood. And yet while income from the tourism trade roughly constitutes a fifth to a third of the whole economy, depending on how you calculate it, the finance ministry’s 2012 budget proposal allocates the Ministry of Tourism’s $18.5 million in funding, one of the lowest within the government.

“Our budget is a catastrophe,” remarked Michel Habis, advisor to the Minister of Tourism Fadi Abboud.

There is also no coherent strategy for the sector in Lebanon. There are ideas, proposals and plans, but most have been swamped in the miasma of cabinet and parliamentary debates, and thus never see the light of day.

“The Ministry of Tourism is trying to apply a strategy but first you need political stability before any strategy can be implemented and there is no stability in Lebanon,” complains Paul Ariss, president of the Syndicate of Owners of Restaurants, Cafes, Nightclubs and Pastries. Indeed for years the ministry has been touting Lebanon as a high-end tourism destination. Yet when Arab Gulf countries issued travel warnings for Lebanon over concerns related to the ongoing crisis in Syria, Abboud began talking about having Egyptians come to Lebanon for $500, flight and hotel included.

Opening the skies

The unpredictability of Lebanese stability is but one hurdle towards getting a comprehensive tourism plan through Lebanon’s notoriously turgid political process. It may well be beyond the scope of the ministry but one policy Abboud is pursuing with vigor is to attract the low-cost budget airlines to Lebanon; a strategy that has him on a collision course with the government-owned national carrier, Middle East Airlines (MEA), and its allies in the cabinet.

“If we significantly reduce the cost of travel we can boost the numbers by 50 percent.  The country will profit so much more,” says Habis. Last month the Emirati-based Arabian Business published an interview with Abboud stating that the ministry was in talks with European low cost carriers Monarch Airlines, easyJet and Ryanair, and the minister accused the Lebanese Civil Aviation Authority of not allowing the airlines to land without first being given extra access to their markets.

“I have a complete plan that I want to introduce low-cost flights and chartered flights,” said Abboud to the news outlet. “The hotels are ready to give special prices. I don’t want to reinvent the wheel. I want to do what Dubai did a few years ago when they had a problem, or what Egypt or Tunisia is doing now. You know you can spend a whole week in Tunisia now for $400 in a hotel plus the ticket.”

Lebanon signed up to the open skies policy in 2000 and fully implemented it in 2002, which opened up the market to unrestricted competition from other airlines. However, MEA never fully accepted the agreement and now with Ghazi Aridi, the minister of transportation and public works, firmly ensconced in their corner the country is retreating from this liberalization policy. “Airlines that are already servicing Beirut are requesting flights but Minister Aridi and MEA are rejecting these and this is what is killing the market,” says Hamdi Chaouk, former director general of Civil Aviation complains. “This comes specifically from the Ministry of Transport and Public Works which is trying to protect MEA.”

Other tourist hotspots in the region such as Israel and Turkey already have frequent flights from around Europe on budget airlines and as such are, in general, much more affordable tourist destinations.

“Today if you want to buy a ticket from London to Beirut it could cost close to a $1000 whereas the same ticket to Tel Aviv could be closer to $500,” says Habis.

Prices warding off newcomers

However, attracting budget tourists to Lebanon may seem counter intuitive considering the fact that a beer in Beirut costs as much as it does in London, and it is a struggle to get a good meal for under $20 a head. However, while acknowledging that Lebanon is an expensive destination for backpackers, Habis argues that if the flights are affordable, backpackers could be a big boost for the outlying areas such as Tripoli, Sour and the Bekaa where the cost of accommodation, food and entertainment is considerably less than in the capital.

The inexorable rise in prices is having a large affect on another potential tourism market and that is the community of Lebanese expatriates living abroad. In early July at a conference in Beirut held specifically for this community, the Minister of Tourism failed to turn up to a discussion on the policy of the Lebanese government to improve and increase tourism of Lebanese immigrants, eliciting more than a little bit of ire from the attendees.

“The Lebanese living abroad should be the permanent and continuous tourist to Lebanon,” said Nassib Fawaz, president of the Lebanese International Business Council speaking on the sidelines of the conference. “We want to be the tourists in Lebanon but the cost is so high. The middle classes are getting priced out of their homeland.”

Ripe new traveler markets

Habis says there are expanding markets that Lebanon is failing to tap into. Russia and Turkey are two countries within a four-hours flight where the traveler market is expanding considerably. “The Russians are becoming big, big travelers and we are not attracting enough of them because we only have two flights a week. They are all going to Cyprus but we need more flights,” say Habis.

In order to brand and promote Lebanon, Pierre Achkar, president of the Lebanese Hotel Association, argues it is necessary to target specific market segments and to communicate with captive markets in their own language. “We need to have close cooperation and a coherent strategy with foreign travel agents, for example in Turkey,” he says. The problem is that the Ministry of Tourism has virtually no budget to do this. The Council of Ministers recently agreed, however, to create a ‘promotion board’ headed by Minister Abboud, who will be joined by a number of concerned actors including the head of the central bank, the chairman of MEA and the head of the Federation of Tourism Syndicates. While the board will “brainstorm ideas,” according to Habis, on how to develop tourism in Lebanon, he claims it will primarily focus on raising funds for the promotion and branding of Lebanon abroad. In developing this brand Habis says the ministry is keen to engage with niche profiles of tourists, such as those interested in environmental and heritage tourism. However, Joseph Haddad, founding member and secretary of the Association for the Protection of Lebanese Heritage, argues that Lebanon is failing miserably to protect both its heritage and its environment. “The government right now views tourism only from the point of restaurants and hotels and nightlife but they are too short sighted to look at long term solutions such as preserving architecture or archeological sights,” he says. “This builds long-term tourism markets. They are just trying to pursue fast revenue. It is a typical Lebanese mentality.”

Lebanon’s Minister of Tourism does not pack the punch in the cabinet commensurate to the value of his sector, but Fadi Abboud is no shrinking violet. It is fair to say nobody is holding his breath for a comprehensive tourism strategy getting passed anytime soon. However, Abboud’s success or failure of opening the gates to budget airlines servicing more routes more frequently to Beirut will be a big determining factor in his ability to inject a fresh lease of life into the tourism sector in Lebanon.

With the electricity more off than on, it has been a hot, yet so far quiet summer. No waves of swaying black abayas in ABC and while Beirut’s hotels would normally be fully booked, a room these days is easy to find, often against bargain prices. A quick Internet search shows that a five-star Saturday night in mid-August costs $495 per room at the Movenpick Hotel and Resort, $240 at the Phoenicia Intercontinental, $135 at the Hilton Beirut Metropolitan Palace (down from $328!) and only $99 at the Commodore Hotel.

Now, Ramadan traditionally is a quiet time in terms of travel, yet a similar search for a Saturday in September again shows ample availability and only slightly higher prices. Surprisingly, the tourism sector’s main indicators at first sight do not seem all that bad. During the first five months of this year, 557,188 foreigners flocked to Lebanon, which represents only 6.5 percent decline compared to the same period last year. According to Ernst & Young’s survey of the Middle East hotel sector, the average occupancy rate at Beirut’s four and five-star hotels was 66 percent in the first five months of 2012, a 14 percent increase from the same period last year.

But these figures do not tell the full story. First, one should not forget that 2011 was already a precarious year. Only 1.65 million tourists visited Lebanon, a 23.7 percent decrease compared to 2010.

Secondly, the make-up of foreign visitors has changed. Most Arabs visiting Lebanon until June were Iraqis (48,125), Saudis (44,907) and Jordanians (39,744). Asian tourists recorded the sharpest decline, mainly due to the only 16,525 Iranians, an 80 percent drop compared to last year.

It illustrates the main issue at stake for Lebanon: Syria. Most Iranians normally visit Lebanon as part of a pilgrimage along the main Shiite sites in Syria. Yet, as Lebanon’s eastern neighbor has grown more and more dangerous, less and less Iranians go on holiday. The same is true for those Gulf Arabs and Jordanians — in 2010 the biggest group of foreign visitors — who tend to visit Lebanon by car.

In addition, following violent clashes in the streets of Tripoli and Beirut, the governments of Qatar, Kuwait, Bahrain and the United Arab Emirates in May urged their citizens not to travel to Lebanon. In early June, Saudi Arabia issued a similar warning. Many Lebanese believe the warning is partly politically motivated, as the Gulf Cooperation Council supports the Syrian opposition, while Lebanon’s government remains on somewhat good terms with the Assad regime.

“Until May 21, we had a relatively good year, but after the warnings we immediately felt the impact,” said Roger Saad, Director of Sales at the Four Seasons Beirut. “In July, we had an occupancy rate of only 55 to 58 percent, which is still not too bad seeing the circumstances. August will be much quieter, although we expect a strong pick-up to up to 85 percent for Eid at the end of August. Of course, we will have to wait and see. One major incident and all reservations are cancelled again.”

Following the travel warnings, Lebanon’s Tourism Minister Fadi Abboud headed to the Gulf claiming the reports about unrest in Lebanon were “exaggerated.” In July, Lebanon’s President Michel Sleiman followed in his footsteps. The efforts should not come as a surprise, knowing that tourists from these countries represented only 13 percent of foreign arrivals in 2011, yet were by far the biggest spenders.

Even this year, despite the decline in numbers, Global Blue, which maps shopping trends by analyzing VAT Returns, concluded that the biggest spenders were still Saudis, Emiratis and Kuwaitis, with a combined 41 percent of the total. Some 85 percent of their purchases concerned clothing and jewelry. According to Lebanon’s Ministry of Tourism the sector in 2010 contributed some $8 billion to the economy, or 20 percent of Lebanon’s gross domestic product. This decreased to some $7 billion in 2011, and this year it is feared it may drop below $6 billion.

The tourism toll

One of the main sectors affected is the hospitality market. “On July 2, Beirut high-end hotels reported an average occupancy rate of 74.5 percent, while over the first 6 months of 2012 the average occupancy income went up by 35 percent,” said Pierre Achkar, president of the Lebanese Hotel Association (LHA), as well as chief executive of the Monroe Hotel in Beirut and the Printania Palace Hotel in Broumana.

“However, that is only in Beirut, not in the rest of the country,” he continued. “Beirut’s high-end hotels will always attract corporate clients. Outside Beirut, that is hardly the case. The situation is extremely bad. At the Printania, we often have occupancy rates of 10 percent, which may go up to 40 percent on a very good day.” Achkar cited the negative travel advice or “embargo” as one reason for the malaise. Another, especially for places such as Broumana, is the situation in Syria, as most tourists who travel to Lebanon by car tend to stay in homes and hotels outside the capital. “Since the uprising began, we may have lost some 350,000 to 400,000 visitors coming through Syria,” he said.

The LHA figures for last year confirm the trend. By the end of 2011, over a third of Lebanon’s 18,593 hotel rooms belonged to 58 high-end hotels. While Beirut’s 5-star hotels in 2011 posted an average room occupancy rate of 53.56 percent, occupancy rates in 5-star hotels outside Beirut varied from 21 percent to 34 percent. The same was true for the country’s 4-star hotels.

The knock-on effect

The absence of tourists is not the hotels’ only problem. “In Broumana we do not have electricity for 16 to 18 hours a day,” said Achkar. “Still, people want AC and as we have a central cooling system that costs us about $1,000 a day. Also, we normally employ some 52 seasonal workers in summer, mostly students. This year only 11, as we have to bring our costs down.” While business has not been as bad for Beirut’s high-end hotels, they too have taken measures. “Nothing dramatic, but we must limit our overhead,” said Saad of The Four Seasons Hotel. “We are keeping our expenses down and spend less on ads and business trips. No one has been laid off yet, but we are pushing employees to take their (paid) holiday now.”

Paul Ariss, president of the Syndicate of Owners of Restaurants, Cafes, Nightclubs and Pastries in Lebanon, emphasized the problem did not start this summer. According to him, the sector’s combined turnover since early 2011 has taken an estimated 40 percent hit. However, he also stressed that not all venues have been affected in similar fashion, as some in particular target tourists, while others mainly depend on a local clientele.

He estimated the number of tourists normally traveling by car through Syria at some 40,000 a month. “There have so far not been more closures than normal, but we have seen some take-overs,” he said. He did not know how many Lebanesee lost their jobs, but signaled that, for more than a year, bars and restaurants have employed more and more foreign laborers.

Both Ariss and Achkar remained positive, however. “We don’t care and just keep up,” said Ariss, while according to Achkar recovery in Lebanon is always rapid. “Arab nationals own some 35,000 to 40,000 homes in Lebanon, so they will come back sooner or later,” he said. “And look at 2006. As soon as the war was over, tourists were back. The same was true in 2008. Following the Doha Accord, we had a 100 percent occupancy rate within a week.”