Following on the heels of an April conference which saw 127 applicants from around the world bidding to develop 100 of Syria’s top tourist sites, Sadallah Agha al-Qala, Syria’s Minister of Tourism, gleefully opened the “Syrian Tourist Horizons Forum” July 5 in Damascus.
Naturally enough, the two-day event was meant to highlight some of the country’s recent (and anticipated) achievements in the sector: 9,000 new hotel beds will be added each year by 2010 at which point tourist revenues are expected to reach $6 billion annually ($2.2 billion was earned in 2004 al-Qala told the conference). And despite what the minister referred to somewhat euphemistically as “bad publicity,” the first five months of 2005 saw a 55% jump in package tours of Western tourists coming from mainland Europe – a stat that was used to justify the prediction that 3.6 million tourists will have visited Syria by year’s end, or 600,000 more that 2004.
One of the main speaker’s at the conference, however, Intercontinental Hotels Group CEO Chris Moloney, signaled at least one problem the sector faces mostly unrelated to politics or economics – an aspect that may ultimately harm the sector’s long-term prospects for growth far more than any immediate questions about the current regime’s stability or lack of stability.
“I urge you to carefully consider the unique experiences which Syria can offer compared to other destinations….. Pay attention to that aspect because it is extremely valuable and fragile,” said Moloney.
Of course, hewing to such advice may not be that easy: Outside the conference hall large, glossy displays for future developments in Palmyra, Tartus and Latakia looked more like the sorts of hotel and recreational developments found in Dubai or Las Vegas. Already, in fact, 19 of the April projects that were approved have broken ground, with some promising to bring the first real taste of the five star life to points across the country.
According to Nashaat Sanadiki, Chairman of the recently formed Federation of Syrian Chambers of Commerce, the danger of “overscale development” – development which overwhelms the natural beauty and charm of an area rather than adding to it – is both real and, he hopes, manageable.
“My view is that I would like to see Syria takes it’s share in tourism, but without harming our texture and social life,” he said. “We can do that without resembling Dubai… [but] that means we cannot sacrifice our desert area, for example, to convert it all in to 5 stars resorts.
“Where will the average Syrian go after all?”
Seemingly unfazed by the bombings, assassinations and political turmoil which are threatening to wreck Lebanon’s summer tourism season, Lebanese entrepreneur Merhi Abou Merhi chose June to launch Orient Queen, the world’s only cruise on a Lebanese-owned ship.
The ship-owning company Abou Merhi Lines SAL, which owns 17, primarily car-carrying vessels, purchased the roughly 16,000 tonne, 900-passenger “Bolero” cruise ship from Greek-owned Festival Cruises for $9.5 million, according to an annual report on the Website of the Paris-based shipbrokers Barry Rogliano Salles.
The Lebanese company has invested, “more than 10 million dollars” refurbishing the vessel, according to Abou Merhi Lines media manager Karim Gemayel. It was then renamed Orient Queen.
For just over a month now, Abou Merhi Lines has been offering a seven-day cruise aboard the five-star vessel around the Mediterranean – Egypt, Cyprus, Greece and Turkey – at a starting price of $1,050. The price climbs as high as $7,000 for passengers who go for the royal suite, five meals a day, private butler and the constant companionship of “two ladies,” Gemayel said.
As soon as Lebanon’s summer tourist season is over, the Orient Queen will begin offering cruises out of Dubai, before returning again to Beirut again the following summer.
Gemayel said that the weekly cruise had attracted “hundreds” of passengers in its first month, a figure he acknowledged was not particularly high for a ship which can accommodate around 900 people per cruise.
“Promoting the cruise has been difficult,” he admitted. Asked if launching the cruise in the midst of political turbulence and a months-long spate of violence might have been unwise, he said: “The people who conducted the feasibility and profitability studies all suggested we rent the boat out to any European country. We had some very good offers. But we are not in this for pecuniary gain. Our slogan is ‘For Lebanon.’ We are trying to rebuild tourism in Lebanon.”
Salvation, though, may lie in Dubai. “There is a lot of demand in Dubai,” said Elie Nakhal, head of Nakhal Travel, which is selling Orient Queen cruises. “Dubai will compensate for any losses in Lebanon.”
Around 60% of the passengers thus far have been Arabs – roughly half of them Lebanese, 30% have been Turks and around 6%-7% Europeans, mostly from Greece and Cyprus, Gemayel said.
The international cosmetics group, L’Oreal, last month made a strong recruitment pitch and presentation of its Human Resources strategies at the Ecole Superieure des Affaires on occasion of signing a partnership agreement. Aims of the agreement include to enhance networking between ESA and leading companies and to develop the relationship between the business school and L’Oreal Lebanon.
Under the agreement, which formalizes long-standing collaboration between the two entities, ESA students will study L’Oreal marketing cases and have better opportunities to benefit from recruitment at L’Oreal, said ESA communications director Georges Najm.
For L’Oreal, international recruitment and working with leading business schools is a priority, Jean-Claude Le Grand, the director of corporate strategic recruitment at L’Oreal, told Executive. “We manage the career of the executive personality differently. We promote angry, dynamic young people,” he said. “Other companies don’t dispatch Human Resources staff to recruit on the ground at universities and only a few companies have a strategy to recruit worldwide.”
According to Le Grand, L’Oreal has collaboration agreements with numerous important business schools and spends over 1 million euro annually as direct investment into recruiting, not counting salaries in the HR department. The company, which says it takes five to ten years to build up a L’Oreal manager, seeks to recruit 70% of its managerial staff from career starters. Besides engaging in partnerships with business schools, L’Oreal employs campus business games and internships in its efforts to attract the most talented students to its ranks. “We are not chatting about to war of talent, we are acting,” Le Grand said.
A recent move to make doing business in Sudan more palpable for Lebanese entrepreneurs is paying off for British Mediterranean Airways (BMED). In the first two months since the carrier opened its London – Beirut – Khartoum line for service between Khartoum and the Lebanese capital in the middle of May, passenger load factors developed well, according to BMED regional sales manager, Naji Mahdi.
The new service reduces travel times between Beirut and Khartoum from at least nine to under three hours each way, because in the past, passengers had to transit through other countries to reach Sudan, Mahdi said, “but we did not take advantage of this to raise our fares.”
BMED had taken first steps towards creating the Beirut – Khartoum service about 18 months ago in changing the routing of its London – Khartoum flights from going via Amman to stopping in Beirut. The door for the new service was opened fully when the civil aviation authorities in Lebanon and Sudan readily allowed BMED to carry passengers on the route under so-called fifth freedom rights. Unless they are granted these rights, airlines are not permitted to issue tickets between an intermediate and the final destination of a flight.
In its general business between Beirut and London, the airline saw no significant slump because of the political uncertainties that Lebanon experienced in the first half of the year. Most recently, BMED received some cancellations “due to whatever happened in London and in Lebanon,” Mehdi said. “We had a slight drop over last year but things are picking up and in 2005, we should be carrying the same number of passengers as last year, or slightly more.”
The need for deep economic reform in Lebanon was outgoing prime minister Najib Mikati’s theme in messages he delivered on the eve of the last election round. Speaking at the Arab Economic Forum (AEF) in Beirut last month, Mikati said that reforms and development would require a “collective national accord”, likening the need for consensus in economic renewal to that for the Taif Accord, which ended the years of internal military conflict. Mikati’s call was echoed by visiting Turkish prime minister Recep Tayyib Erdogan who urged for economic reforms in Arab countries and called for greater economic cooperation between Turkey and Arab world at the event, which in itself was overshadowed by the current climate of uncertainty.
The AEF gathered about 850 participants together, significantly below last year’s attendance, Walid Abou Zaki, executive director of organizers Al-Iktissad Wal-Aamal Group, told Executive. “Even though we tried double hard, it was very difficult and the participation didn’t reach last year’s level. However, the forum was very good and our financial results were excellent,” he said.
Following on the heels of the World Economic Forum’s (WEF) Middle East Meeting in Jordan last month, the AEF is not related to the WEF. Organized by the Beirut-based Al-Iktissad Wal-Aamal Group as for-profit commercial conference, the event was known in previous years as Arab Investment and Capital Markets Conference. When asked about any eventual links between the WEF and the similarly named AEF, WEF media spokesman Matthias Luefkens confirmed to Executive that the Beirut event was in no way connected to his organization, known for its Davos conferences, but was unconcerned about the naming similarity. “The copy honors the master,” he replied.
Not to be outdone by the recent spate of monorail building announcements in the Middle East, including a Dh 12.5 billion one in Dubai, Syria has boldly announced that it would supplement its 2,050 km of railroad track with a 9.5 km semicircular monorail in Damascus.
The project, awarded to the Malaysian company Mtrans after a French firm determined that an underground metro would be too costly, will break ground in early 2006.
The final cost: approximately $152 million, or $16 million per km, a far cry from the $50-70 million per km cost of building an underground metro.
“We are very happy about the project and we are going to work very hard to implement it two years after the start date,” explained an ebullient Moussa al Shaar, the deputy minister of transportation.
According to the current plan, Damascus will eventually get three separate monorail lines: A 12km “Green line,” an 11km “Red line” and the 9.5km “Blue Line” which Mtrans will build first.
That line will have 12 stations and will run from the Abbasid square to the Abdel Rahman al-Dakhel square.
Although al Shaar stressed that a pricing strategy had not been determined yet, he suggested that an effort would be made to keep the cost of a ride below $.20.
“At that pricing level we estimate that, in the near term, daily ridership will amount to around 60,000 persons,” he explained. “By 2023 [on the original Blue Line] we would expect ridership to reach 19
Despite rumors of delays in opening up its Dubai office, with its recent announcement of a move into Egypt, the Beirut-based Daily Star (DS) is fast realizing its plan to be positioned as the most widely read English language daily in the Middle East.
Already distributed in Qatar and Kuwait along with its parent company’s paper, the International Herald Tribune, DS General Manager Ayad Tassabehgi explained that more countries may be in the offing if suitable local partners can be found.
“The arrangement is that we team up with local people who we then share the profits with… We satisfy our demand for being a regional paper and, on the other hand, we allow a local flavor since we have local staff who send copy to Beirut where it is sub-edited [for the local edition].”
Tassabehgi said that the DS began in Egypt in April by printing 5,000 copies, of which an estimated 50 percent on average is sold (various promotional campaigns have distributed free copies). The company also obtained a local printing license, thus avoiding the one to two day delay that came previously when the DS and Herald Tribune had to be shipped from Beirut.
“The minute we find a local partner that makes sense we do it,” he added. “Our strategy is that we will be widely available across the Middle East in a cost efficient manner.”
Ever since the killing of former Prime Minister Rafic Hariri, the Virgin Megastore stands on an island. To the left, Martyrs Square is effectively a camping site. Consequently, the road to reach Virgin has been closed, due to security concerns. Virgin’s former parking in front of the store has been turned into a memorial site for Hariri, while two construction pits separate the store from the rest of the BCD.
“The building sites don’t hurt us that much,” said Jihad el Murr, CEO of the Virgin Megastore. “Construction started well before the killing of Hariri and in that time sales were still good. Only after the death of Hariri sales went down by 70%, which in recent months has slightly improved. Today we have about $40% less in sales. I expect it to improve further when the tents are removed.”
The last diehard demonstrators in downtown have sworn to stay under Lebanon’s statue of independence, until former Lebanese Forces leader Samir Geagea is released, which according to many may happen any time between July and September. There are no signs yet that the tent in honor of Hariri will disappear. In fact, some say it will remain permanently, a move that could severely affect the store’s access and positioning in Lebanon’s retail consciousness.
“As we now we have a new parking left of Martyrs Square, the Hariri site doesn’t affect us much,” said Murr, who is mildly positive about the upcoming summer. Last year the months of July and August produced a 60% sales increase thanks to the large numbers of Arab tourists and Lebanese expatriates that visited Lebanon. “The signals we get from the hotel sector are positive,” he said. “Most hotels claim they are fully booked, so I’m upbeat about the summer. It will probably not be as good as last year. If that’s the case we are happy.”
Lebanon’s two southernmost districts, Hasbaya and Marjajoun, are rapidly becoming the place to be, as far as eco- and rural tourism go. Funded by a $12.5 million US Aid grant, the American non-governmental organization Mercycorps has been working on a series of interconnected development projects deep south since November 2002.
“By focusing on eco- and cultural tourism, as well as ecologically sound agriculture, we hope to bring sustainable development to this beautiful, yet forgotten region,” said senior business development officer Hala Kilani.
So, in Khiam a WWII bunker built by the British was cleaned up and opened to public, while in Hasbaya the 12th century castle and khan were made visitor friendly. El Saqi, 28 hectares of woodland overlooking the Hasbaya River, is promoted as a paradise for migration bids, while in the Chebaa plains at the foot of Mount Hermon hiking trails have been set out.
When combined, the dozens of separate projects make a perfect roundtrip to discover the region. The combined project is currently in its final stages and will be finalized by November. Mercycorps is an NGO offering emergency relief, rehabilitation and sustainable development in countries suffering the consequences of conflict and war. Founded in the late 1970 in response to the humanitarian crisis in Cambodia, the organization operates in some 35 countries worldwide. Following 20 years of Israeli occupation and economic decline, Hasbaya and Khiam fit the definition perfectly.
The big question is: are people willing to drive 2,5 hours to visit the beauty of the south? “It is all a matter of promotion now,” said Kilani. “We had a stand at the 2005 Garden Show last May and it was remarkable to see just how many people did not know anything about the south, yet were very enthusiastic after they saw our work.”
Since, for decades it seems, the Lebanese government has generally been unwilling or unable to protect Intellectual Property rights, it should come as no surprise that multinational corporations are pushing for governments to collectively punish the country.
In one prominent example, the International Intellectual Property Association (IIPA) said in its recently released 2005 report that U.S. copyright industries lost $31 million last year because of piracy in Lebanon.”
The Association’s recommendation: “Lebanon must take concrete steps toward eradicating piracy…otherwise, its trade benefits under the Generalized System of Preferences (GSS) should be suspended.”
The report ominously added that in the first 11 months of 2004, Lebanon imported more than $31.1 million worth of products into the United States without duty under GSS, “or a staggering 45% of its total imports into the U.S.”
Of course, even if one of the most obvious IP issues is tackled successfully – mainly, cable piracy which is estimated at almost 90 percent in Lebanon and which cost the Finance ministry $12 million in lost revenue last year – the IIPA report said end-user piracy of software and pre-recorded music and films is still widespread “among large companies, banks, trading companies, and most government ministries.
What’s more, “There are only four, part-time inspectors in the [Beirut] Department of IP Protection. In the area of software piracy, these inspectors lack computer knowledge [and] startlingly, these officers only work until 2 p.m. and won’t work with computer experts.”
In one particularly troubling case of bureaucratic inanity, the IIPA said that even when inspectors were charged with raiding a pirate reseller at 4 p.m. at a computer fair, the inspectors said the raid could not go forward because it was “after working hours.” Plus ca change…