Executive Magazine

Anatomy of an ad campaign: MEA

by Paul Belden September 1, 2003

written by Paul Belden

The Client

No doubt about it – Middle East Airlines has had a rough time of it over the last 25 years. Two years ago, the trading value of the Lebanese national carrier was, in the succinct summation of chairman Mohammad El-Hout, (as quoted on the Skytrax news website): “Nil.”

Then came September 11 and things looked like they might suddenly get a whole lot worse.

How much worse? Hout’s stark assessment reflected the reality of an airline that found itself grossly overstaffed, paying too-high leases on its fleet of airplanes and in the beginning stages of trying to eliminate about a third of its 4,000-strong workforce.

In a tale that has been documented ad nauseam, in June 2001, the company had warned some 1,450 employees that it had to reduce staff as part of its cost-cutting initiative and that it would declare bankruptcy if they did not accept their dismissals and severance packages.

The cost-cutting led eventually to a series of threatened and actual strikes by pilots and other workers earlier this year – and any airline executive knows that a pilot’s strike can be the death knell for a struggling airline. (Just look at what happened to US-based United Airlines, or at what’s happening to struggling British Airways.)

The Opportunity

But out of the post-September 11 crisis arose tremendous opportunity for Middle East Airlines.

The business climate offered new opportunities. Regional travel in general and Lebanon’s tourist industry in particular, received a big boost. “Many Gulf travelers chose to remain in the Middle East rather than travel to Europe or the United States for their annual vacations,” said Ayla Dame, director of marketing for Middle East Airlines.

It also helped that Middle East Airlines had survived the workers’ actions, and had managed to cut costs. It had also completely re-engineered its flight schedule in 1998, and it began to seriously examine its options.

The lease on the airline’s fleet was coming up for renewal in 2003, and the management decided that this would be a good time to make a bold move. The airplane industry (also hard hit by September 11) was in a position to offer a good deal on selling rather than leasing planes, and MEA took them up on the offer. “We bought six single-aisle Airbus A-321s, and three wide-bodied A-330s,” Dame said.

Suddenly the airline that had been at the bottom of the business trough was riding the wave. So the MEA management team decided to try to see how they could capitalize on this through an original advertising campaign that would focus on this new sense of optimism.

“Mohammed El-Hout was given the mandate of bringing the company back into profitability, and now profitability has been achieved. So the next step is to create a new image,” said Joe Ayache, manager of Beirut-based advertising company BatesLevant, which was given the job of creating that image.

The Legacy

His first task was research. “We spent four or five months conducting research, and we found some extremely interesting things,” Ayache said.

The most interesting was the emotional bond that many Lebanese had with their national carrier. He immediately recognized that this was one of the key assets the company had going for it.

The bond was a reflection of the airline’s history. “Throughout the whole war, the MEA logo was sort of a national emblem,” said Ayache. “Whenever the fighting would ease up, the first that many people knew about it was when the airport opened and they could see a plane landing or taking off with that national logo on the tail.”

That’s partly why Middle East Airlines has always stuck with a strong cedar motif in its logo – to identify with the wellspring of affection that people who remember the war still retain for the airline. “The MEA logo was sort of made into a national link between the Lebanese people and themselves,” Ayache said. The latest logo, created by an Airbus in-house advertising agency when MEA leased planes from the jetmaker in 1996, is simplicity itself. It features a giant cedar tree on the tail of the airplanes, which is impossible to miss from almost any recognizable distance. In the past, the logo has varied, with many variations created by the Leo Burnett Agency, MEA’s main ad agency that still retains a substantial amount of MEA advertising work. One of the most durable of these images featured a cedar tree in the foreground, with a pair of jet airplane wings projecting from each side. Another memorable image featured a wavy white cedar tree outlined by clouds in a blue-sky background.

The Challenge

With the new planes, however, Dame has focused on implementing a new national advertising campaign that capitalizes on both nostalgia and optimism.
This last point is especially important. “You can’t advertise unless you have something to advertise,” she stressed. “That’s why in 1996, 1997 and 1998, when the company was struggling, we focused mainly on tactical advertising – that is, targeted ads listing routes, prices or specific campaigns.”

This was the time for something broader. “There were two challenges: the first had been taken care of, with the purchase of the new planes, and the setting of the new standards of service, punctuality, etc. That was essentially a business challenge – to provide something to advertise. The second challenge was to somehow leverage that newfound sense of optimism into a new identity in people’s minds.”

The Brief

And this is where Joe Ayache and BatesLevant came in. To get that new sense of identity, he brought in a team of designers working with Laudy Sleiman, Dame’s advertising manager, to create a new regional ad campaign.

“We wanted to build on the sense of identification that Lebanese people had with MEA. But we also didn’t want to focus on the past. Besides, we were also trying to reach many non-Lebanese potential customers. So this is a forward-looking campaign. When MEA bought its new fleet, these airplanes had zero miles on them. This fleet is completely new. That is a tremendous selling point,” said Dame.

MEA’s new fleet provides personal entertainment screens in all classes, with personalized video or audio options, wider seats, larger aisles and enhanced business-class comfort. It is the first Airbus model to provide digital video in all classes.

The Brand

The planes may be new, but the cedar on the tail is still the main brand identity for MEA, said Dame. “Are we trying to change that? No. But can we possibly evolve that to some degree? Yes.”

“Traditionally, you have a ‘master brand’ that underpins the essence of the message you’re trying to convey. Then, beneath that, come sub-messages that you might base a small campaign advertising on. For instance, one of these sub-messages could be the quality of your business class, another could be the services on your planes,” explained Ayache. With this campaign, Ayache is taking what is normally one of the smaller sub-messages – the newness of the fleet – and building it into the master brand.

“The idea was to find a concept uniquely Lebanese,” he said. “So we combined experience (the hands of the officer holding up the child), and youth (the young child).”

The Execution

The first wave of ads was rolled out in April of this year. There were two concepts: one featured a little girl being held up in the air by two male arms clothed with the gold-striped cuffs of a captain’s jacket. She is surrounded by blue sky and looking up into the air in front of her with her arms outstretched to each side, smiling hopefully, as if just catching first sight of an enchanted kingdom.

The other ad features a boy who is standing in the same pose, with the same smile on his face. In each ad, above the children runs the tagline “Youngest fleet in the world; most experienced airline.” Above the tagline is a row of jets with the trademark cedar logo on the tail.

The Buy

The ads were placed in quarter-page outlets in many newspapers in Lebanon and other Middle Eastern countries, as well as magazines and billboards.

The second wave of ads is due to come out in October.

“This is how you usually conduct a campaign like this one,” said Dame. “The first wave is to get people’s attention. The second wave is to reinforce and cement the image in the minds of the people.”

The ad campaign cost MEA $300,000, Ayache said, with about 70% of this money being spent on press ads, and the remaining 30% on outdoor advertising. There are no plans for any radio or television ads as yet, but Ayache “wouldn’t rule it out.”

The Difficulties

Perhaps the biggest difficulty of the ad campaign stems from one of the airline’s strengths, according to Ayache: people’s identification of MEA with the civil war can be a double-edged sword.

“In 1973, the entire MEA fleet was decimated on the ground at the airport by an air attack,” he said. “Of course the insurers paid up, but that is just one example of a bad memory that came out of the war. The Lebanese are very patriotic people, but to most of them the memory of the war isn’t all that great.”

Another difficulty is that a lot of young people don’t have any special affection or attraction to MEA. That affection really was something that was born of having lived through the war. According to Dame, 73% of MEA customers carry Lebanese nationality, and 50% live in Lebanon.

The Results

We won’t know the results until next year. With an ad campaign like this, said Dame, the goal is to make the new image stick in people’s minds. It’s to get them to the ticket counter based on an image and an identification. But then they have to want to come back.

Ayache agreed: ”The best campaign is worthless if the airline doesn’t deliver. Now MEA has to deliver.”

September 1, 2003 0 comments

Finance

Promising performances

by Tony Hchaime September 1, 2003

written by Tony Hchaime

The rather tired theory that the banking sector is one of the sectors most likely to spur an economic upturn was given a boost by the promising performance of leading Lebanese banks over the past six months.

The major turning point for both the Lebanese economy in general and the banking sector in particular was the Paris II donor conference held in November 2002. While no direct material benefits seem to have trickled through to the economy, the overall confidence in the domestic currency, coupled with the image of stability portrayed by the government, have seen a redirection of funds towards Lebanon’s leading banks.

Among those banks, Banque Audi stood out with a considerable 20% increase in total deposits during the first six months of 2003, reaching $5.1 billion, and overtaking its rival Byblos Bank, which added almost 8% in deposits at $4.3 billion. BLOM Bank maintained its position as the country’s largest commercial bank, with its deposit base growing by more than 13% to reach $7 billion by June 2003.

Banque Audi also managed a staggering 50% growth in net income for the first half of 2003, relative to the same period of 2002. The bank’s net income jumped from $17.54 million in H1/2002 to more than $26.4 million in H1/2003. While net interest and commission income failed to register substantial growth, the main contributor to the impressive growth recorded during 2003 emerged as income from financial operations. In fact, net income from financial operations jumped a staggering 220% during the first six months of the year, reaching $19.6 million and contributing more than 74% of the bank’s net profits for the period.

BLOM Bank recorded a growth in net income of just over 5% year-on-year, reaching $42.8 million, while Byblos Bank’s net profits grew almost 10% from their June 2002 levels, leveling at $24.7 million. Bank of Beirut’s net profits inched up 1% over the same period, reaching $9.8 million.

Elsewhere, total deposits in Lebanese banks grew by almost 5% during the first half of the year, reaching LL57.6 trillion. As such, total deposits grew by more than 12% year-on-year, compared to a modest growth of just over 8% for the full year 2002. The accelerated growth observed during the first half of 2003 is a clear reflection of the increased confidence in the sector in general.

Moreover, overall confidence in the Lebanese pound has been reflected in the gains in LBP deposits as opposed to deposits in foreign currencies. As such, deposits in LBP have reached 37% of total deposits in June 2003, the highest level seen since February 2001. This compares to only 29% in June of last year.

Such developments speak greatly about the perceived outlook for the Lebanese pound locally, as the gains achieved in Lira deposits during the first half of the year have occurred despite the dropping interest rates on LBP-denominated deposits. Average interest rates on LBP deposits have dropped from more than 9.3% in January of 2003, to less than 8.3% as of June. On the other hand, interest rates on dollar deposits have been relatively stable, holding between 3.5% and 3.8% over the same period.

Despite the considerable growth in deposits, however, Lebanese banks have been somewhat wary of the domestic credit market. Total claims on the private sector have been fairly stagnant over the past year. Total lending to the private sector remained virtually unchanged between June 2002 and June 2003, settling around LL22.8 trillion. This compares to a growth of around 2.5% for the full year 2002. With regards to currency affinity, no major change has been noted on the credit market in Lebanon, despite the considerable difference in interest rates between loans in LBP and foreign currencies. As such, the vast majority of lending still takes place in foreign currencies, mainly in the form of dollars. Almost 83% of total claims on the private sector are in the form of foreign currencies, compared to 17% for the LBP.

In essence, the lack of growth in the credit market, coupled with the overwhelming dominance of foreign currencies in the debt market, illustrate the overall reluctance of major domestic bankers to lend. While such a position may be justifiable given the inability of the Lebanese economy to sustain economic growth and stability, an easing of self-imposed restrictions on the financing market in Lebanon would substantially contribute to growth in investments and consumption, thereby promoting overall economic growth.

On a more positive note, however, the Lebanese banking sector’s exposure to the public sector has dropped somewhat during the first half of 2003, after registering a sizeable expansion in 2002. In effect, claims on the public sector dropped from an all-time high of LL26.8 trillion in January 2003, to around LL24.5 trillion by the end of June. While the reduced exposure to the public sector has not yet played in favor of the private sector, it does provide banks with the reduced risk exposure and increased liquidity to promote corporate and consumer financing in the future.

However, while regional and domestic economic and political developments greatly influenced the performance of Lebanese banks over the past year, the banking sector itself did not fail to provide its own share of major developments, contributing to the overall growth momentum.

In a survey conducted and published by Euromoney magazine, four Lebanese banks appeared on the list of the Top 250 Commercial Banks in Emerging Markets. BLOM Bank placed the highest among Lebanese banks in 157th place, gaining 19 places since the previous year. Banque de la Méditerrannée placed 160th, followed by Banque Audi in 174th place, and Byblos Bank in 208th. While none of the Lebanese banks made it into the top 10, BLOM Bank and Banque Audi managed to improve their positions significantly and seem capable of maintaining such a positive trend given recent developments.

These encouraging developments, coupled with the progress made by Lebanese banks in Syria, where BLOM Bank and BEMO Bank (in collaboration with Bank Al Saudi Al Fransi) have obtained licenses to operate privately owned banks, are all positive signs that the sector is playing its role in the economic recovery process.

September 1, 2003 0 comments

Finance

The road to Cancun

by Joey Ghaleb September 1, 2003

written by Joey Ghaleb

Lebanon will be present in Cancun, Mexico for the World Trade Organization (WTO) meetings in early September as an observer, putting aside the empty chair position adopted in Doha in 2001 and reflecting the country’s commitment to accede to the WTO. Following two negotiation rounds – the first was in October 2002 and the second is slated for fall 2003 – Lebanon hopes to achieve member status by 2005.

Without debating globalization, the WTO is an evolving mechanism that regulates international trade. With over 145 member countries, a small economy that relies heavily on trade – as is the case of Lebanon – cannot develop and move forward if it opts to stay out of the global economy. Lebanon was a member of the GATT (founding institution of the WTO) and would have been automatically a member of the WTO had it not withdrawn due to the participation of Israel. New WTO members are facing tough scrutiny, whereas early members easily joined, and some, including many Arab countries, are having hard time digesting their WTO obligations.

The WTO has succeeded to a large extent in liberalizing trade and setting rules for a number of sectors but it has not yet addressed sectors that have a larger impact on developing nations – notably, agriculture and services. Awaiting further developments on that front, the WTO is entertaining a multilateral agreement on investment (MAI) five years after the OECD failed to do so, a major endeavor that, again, serves the purposes of developed countries, the main players in the market of international investment.

The EU and the United States in August 2003, agreed on a joint proposal with regards to agriculture. Farm subsidies amount to $300 billion a year and 96% of farmers living in developing countries are worse off because of subsidies, let alone consumers who are paying higher prices. The proposal that caps some trade payments (as a percentage of agricultural production) at 5% is seen by countries, including Brazil and India, as a shy move on the road to liberalizing the sector. After the failure of the Seattle trade talks in 1999, jeopardizing the Doha Development Agenda (a round of negotiations that addresses development issues) would put free trade at risk. And, without an agreement on agriculture, developing countries will feel that new rounds will offer them nothing.

In Cancun, countries will be asked whether they want to launch negotiations on international investment at the multilateral level and what would be the scope of that agreement. As of yet, countries regulate investment, be it portfolio or foreign direct investment (FDI), through bilateral agreements. But in the absence of a bilateral treaty, cross border investment remains unprotected and access to markets difficult. A MAI could address pre-establishment (access of investment to a market) and post-establishment issues (protection of existing investment). FTML, the parent company of Cellis, may not have invested in Lebanon if there was no bilateral agreement between Lebanon and France to protect investment. Investors need to be assured that in the case of foul play, their rights will be protected.

In addition, the ministerial meeting will assess the recent developments in the negotiations on the liberalization of services that began in 2000 and will review the work of the working group on competition policy – both of which are of key importance and relevance to Lebanon and the region.
In light of these major issues set to determine the future of international trade and investment, the obvious question that arises is whether Arab countries have a position or a proposal to put on the table in Cancun. It may be difficult to ask for a common Arab agenda given existing differences, even though Arab ministers frequently hold meetings, the last of which took place July 24 in Beirut. But it may be time for the region to become pro-active. The WTO mechanism may not benefit the interest of a country if that country fails to have its voice heard. Developing countries are becoming increasingly active under the WTO umbrella, with more and more proposals submitted to the WTO secretariat, a strategy that eventually led to incorporating many development issues into the Doha Development Agenda.

As of today, 10 Arab countries are full members of the WTO. Among them, are the poorest, such as Djibouti and Mauritania, and five with observer status, including Lebanon. However, the Arab region remains outside the circle of developing countries that are now taking the initiative of turning the WTO into an institution that serves their objectives. In the process of becoming pro-active, governments of emerging economies are investing in building local capacity and expertise in order to make informed decisions that will bind their trade and investment policies under the WTO framework. Once the policies are locked in, excluding exceptional circumstances, countries will be bound to the rules they agreed to follow. This basic principle has come to haunt countries, which opted for the fast-track accession to the WTO and are now facing difficulty in delivering on their commitments.

The backseat approach adopted so far by Arab countries in the WTO is mirrored by their low intra-regional trade (around 8% to 9%), their high dependence on oil and lack of economic diversification, and their protectionist trade regimes reflected by high tariff and non-tariff barriers. A large number of bilateral trade treaties have been signed amongst Arab countries, however, most are general and few aim to fully liberalize trade. Negative lists, exceptions and exemptions overshadow the Greater Arab Free Trade Area (GAFTA), scheduled for 2005, which does not cover services like the movement of labor and other building blocks of a real economic bloc.

The silent voice of most Arab countries will not serve the purpose of deeper Arab integration into the global economy. The major challenge for the region is to get more engaged in the process by developing positions on the various issues raised in the Doha Development Agenda and not permitting developed and developing nations to hijack the process. If Macau and Malta can submit proposals and actively participate in the formulation of new WTO rules and agreements, maybe it is our turn to do the same.

September 1, 2003 0 comments

Business

The night crawlers

by Anthony Mills September 1, 2003

written by Anthony Mills

Bashir Bassatne, the 30-year-old co-owner of Mandaloun, Asia and the soon-to-be-relaunched Rai, three of the biggest nightclubs on the Beirut’s nightlife circuit, is in a reflective mood. “I don’t think any clubs really hit their targets this summer. A lot of newcomers have entered the market with no experience in the club scene,” he said. “Some made money and some are going to lose a lot of money. It’s not going to last. It’s just a trend. The club business will go back to the people who know how to run it.”Over the last few years, Beirut’s flourishing but fickle nightclub sector has indeed become a magnet for young, wealthy, often foreign-educated, Lebanese wanting to cash in on an industry high on glamour and where the returns appear tantalizingly quick. Often using family money, these playboys-turned-club owners have pumped as much as $1 million each into a sector worth an estimated $36 million annually. “The money is easier to come by if you go to your family, or the family underwrites the loan,” said one clubber, who is friends with many of the sector’s new brat pack. And let’s face it, few banks will endorse loans in such an unpredictable sector. Unpredictable is a fair appraisal.

Recently, Beirut’s nightlife has been plagued by antiquated by-laws, bribery, reports of increased drug use and, yes, even a conspiracy theory that the government wants to shut them all down. But is Bassatne’s prediction that the bubble will burst reasoned analysis or merely sour grapes? As the nightclub/bar market mushrooms, the heady days of huge takings by a small clique of clubs are over. Bassatne, whose partners include his brothers and five university friends, has seen his profits fall by 50% in the last year alone. Six years ago, in a relatively virgin sector, things were different. “Within a year, I had recouped my investment in Rai and a 30% profit,” he said. Mandaloun, Taj and Asia may currently rule the night, but with over 100 other nightspots plying their trade, the competition is cutthroat. “Whenever one comes up, another must die,” said Bassatne.It is not an easy game, especially in a market that is violently seasonal. Christmas, Adha and summer provide enough revellers to go around, but the remaining eight months of the year offer slim picking for a saturated market. Clubs close at the blink of an eye. “It’s a very tough market,” said Ramzi Adada, a partner of Bassatne, who also has a stake in Zinc in Ashrafieh and Japs in Faraya. The nightclub explosion has, according to one owner, “broken the dynamic” of the established institutions, which have seen revenues diverted as clubbers try out the new places. “It’s fierce and uncontrolled competition,” he said, “and most of them [clubs] are losing.”Another owner, a Paris-educated banker, whose parents stumped up his share of investment, compared the current stampede to invest in Beirut nightclubs to the NASDAQ in early 2000, when anyone with a bit of money and no experience, invested and got burned. “Today in Lebanon, anyone with cash is trying to open either a nightclub or a restaurant,” he said. “It’s not a healthy situation at all.” Fadi Saba, who owns two thirds of Zinc in Ashrafieh, believes it is all down to the perceived revenues. “They have high expectations,” he said. “They think they can make it in four months. But it’s not a game.” Given the unreasonable expectations, petulance is never far from the surface. Saba explains that disputes often arise when the profits fail to materialize. “Investors will accuse their managers of theft and it’s downhill from there on.”The gold rush has however, forced a change in investment strategy. Aware of how quickly a club can fizzle and die, today’s investors are now spreading their risk across multiple venues. “When we only had three or four clubs in town, obviously the risk was less,” said one club owner. “Now no one is going to be crazy enough to put all their eggs in one basket.”“It used to be easy to convince one person to invest $300,000,” recalls 32-year-old Saba. “Now the maximum someone will come in for is around $70,000.”“A new nightclub can have as many as 15 partners, whereas before it was one or two,” said Bassatne, whose personal “spread” involves a stake in the $800,000 Mandaloun, and a joint $325,000 and $800,000 in Rai and Asia, respectively. Another $600,000 to $700,000 will be pumped into the new Rai (Bassatne refutes allegations that the original Rai lost it’s competitive edge, blaming the closure on Rue Monot’s agonizing roadworks), which he admitted will have to wait till the market eventually reverts to its regular rhythm and the fly-by-nights have been spat out. Nonetheless, he has also had to diversify. His new ventures include restaurants and a sandwich bar on Bliss Street.The multiple-investor strategy does however, help market the venues, with each investor “working” his circle of friends and acquaintances to ensure patronage. Bassatne spends much of his time securing the favor of the 500-strong local party animals as well as the sizable, and often wealthy, Lebanese expatriates and Gulf Arabs, who flock to Beirut during the holiday season. It also helps spread the costs of building and renovation, which can run over the $1 million dollar mark, as clubs become bigger and flashier.Greater competition has forced nightclub owners to exploit the Lebanese penchant for conspicuous consumption. “People want to show off,” said Ramzi Adada, with a twinkle in his eye “and we want to help them show off.” Adada and his fellow Rai partners, claim to have introduced the “champagne celebration,” a fanfare of sparklers and a bevy of beauties that accompanied every bottle of champagne purchased. In true Lebanese fashion, another top club got hold of the idea and wrote it large (literally). Today, anyone buying $35,000 worth of Salmanazars (equivalent to 12 regular sized bottles) of champagne is immortalized on the club’s “Wall of Fame” or, as local clubbers call it, liste des cons (list of idiots). So far the wall boasts around 15 names. Ramzi Adada recalled how one Lebanese customer spent $22,000 in two hours in Rai. However, such incidents are rare. The image of wealthy Arabs flocking to Beirut for a marathon session of beaches, babes and booze with checkbook cocked is a myth, said Bassatne’s brother Raed. “We’re not getting the big, big spenders and when they come here, they don’t want to really overdo it because we are such a small society.”Other clubs use more time-honored methods to draw in the crowds, relying on what are know within the industry as mafateeh or “keys,” who provide a small but potent stable of beautiful women, who mingle, cajole, look good and even get up and dance on the bar if there is a lull in the evening. Although their existence is never admitted, their clout is considerable. One thriving nightspot shut down (officially for redecoration) after a “misunderstanding” with the “keys.”“These girls work the clubs that have a reputation for hosting high-maintenance ladies,” said one club owner. “A smile here and a compliment there is sometimes all it takes to make even the ugliest guy feel special, and when that happens, he spends and he comes back. Their handlers aren’t so much pimps as they are our partners.” But it is not just supply, demand and a bit of rented cleavage that dictates the market. Some investors have lost money because of antiquated laws and run-ins with the local authorities. Late last year, 28-year-old Marwan Kazan (he of the once popular FUBAR at Sodeco Square) and seven friends, invested $400,000 in Nabab opposite St. Joseph’s Church in the Monot district. Invoking a law that stipulates a nightclub must be a certain distance from a place of worship, the authorities shut it down two months later, after the priests complained of drunkenness, drug taking and indecent behavior. Kazan, a veteran by local standards, has bounced back and now (along with five other investors) has 20% in the $450,000 Taj, which replaced FUBAR and a 10% percent stake in the $550,000 Moorea beach club (12 investors). Moorea, explains Kazan, is modeled on La Voile Rouge in St Tropez. “It’s practically a night-club during the day,” he said, adding that he plans to open FUBAR II, which he expects to cost around $1 million. He too bemoans the rise of the fly-by-night club culture. “Suddenly anyone with $50,000 in his pocket started opening pubs,” he laments. “It hurt us.”Drugs have also taken their toll. Ecstasy may give a designer high, but it’s a downer for bar takings. “It affects our sales,” said Bassatne. “Instead of coming and having a bottle of vodka, this new generation just pop a pill and drink water all night.” And although not rampant, the proud Lebanese habit of kickbacks has also eaten into the bottom line, but the bosses are philosophical. “You have to bribe here and there,” admits Adada. “I wouldn’t call it a bribe,” said Kazan. “You become friends with these people and you offer them a bottle or something.” Fadi Saba speaks of the need to offer, “a good dinner and a bottle of whisky from time to time.”There is however a flip side and it pays to be well connected in a country rife with red tape. “Everyone has connections,” said Kazan. Asked if he used his to deal with problems in his clubs, “Absolutely. Who doesn’t?”Despite the unregulated market, Kazan believes that with the right degree of public sector assistance the sector could be a gold mine (he said that in Nabab’s short life, he and his partners were able to recoup 25% of the initial investment). “The government should see that and try to help us out,” he said, criticizing the overly aggressive and threatening manner in which some clubs, including BO18 and Acid, were raided by security forces searching for drugs. The sector was flummoxed by such high profile clampdowns and their impact on the tourist trade. It is not surprising therefore that many saw the raids as part of a cynical plot to smear clubland with a reputation of drugs and debauchery and in doing so, boost the cachet of Maarad. “It’s their duty to come in,” said Kazan. “How they come in is the problem. It’s not exactly attractive for the tourist. He might think ten times before coming back.” And “coming back” is what it’s all about.

September 1, 2003 0 comments