At a time when Lebanon is witnessing the most severe political, economic and even security crises, the ambitions of entrepreneurs in Lebanon refuse to surrender to this reality.
In this context, Anthony Maalouf, chairman and chief executive officer of ANT VENTURES International and vice president of the Lebanese Franchise Association (LFA), points to a number of factors that have prevented the progress of this sector, but lists initiatives taken to protect it and preserve human capital. In his opinion, the Summer season will be a promising one, unprecedented and prosperous for several reasons and factors.
There is no doubt that the hospitality and food sectors depend on basic factors, most notably tourism, which is its mainstay, which has declined due to several factors, which we will mention in the course of the interview. First of all, what is your assessment of the reality of the sector today?
Very difficult. I used to say, from experience, that this kind of industry, especially our type of industry (casual dining), is the most resilient in facing challenges and the fastest to recuperate. It is human behavior to go out and have coffee or drinks. So the problem now is how long the crisis will last. Entrepreneurs need to be patient and take a long breather, especially as there is a growing array of difficult and complex crises. Certainly, this crisis that we are living in today is the most difficult of all for many reasons.
If the situation remains unchanged and threatened with more difficulties, this will put additional pressure on you as entrepreneurs and as owners of the company?
In fact, the crisis can be divided into two main parts: the COVID-19 pandemic, which has exhausted the whole world and Lebanon of course, and the economic crisis that has afflicted Lebanon and is still draining it. With the COVID-19 pandemic beginning to recede, movement is gradually returning, especially since we have ventures abroad, specifically regionally. But at the local level, the crisis still exists, especially with the decline in purchasing power.
What are the most prominent political and economic factors that have prevented the sector from developing to a large extent?
There are many political and economic factors that hinder the progress of all economic sectors, especially our sector, which depends heavily on tourism and its multiple seasons. There is no doubt that the absence of political and security stability plays a fundamental role in the lack of progress in the economic sectors, in addition to the complete absence of the State and the absence of a medium- and long-term action plan and vision for the advancement of Lebanon and putting it on the right track to achieve prosperity, growth and success. Everyone knows that 70 percent or more of restaurants, cafes and tourism establishments have closed as a result of the crisis that began before the demonstrations of October 17, 2019, and worsened after that due to several factors. But in particular, and being affiliated with the Lebanese Franchise Association (LFA), we work on the principle of pushing the internal crisis abroad. This is what happened during the July 2006 war, when Lebanese businessmen went to open businesses abroad to protect their interests inside Lebanon. Today we are out again, otherwise we would not have been able to survive. For a large number of actors in various economic sectors, the emphasis is on individual initiative and starting again after every strong shock and constantly searching for solutions to problems and crises.
Several companies have witnessed the dismissal of a large number of their employees, and this certainly applies to your sector. How was this reflected on your performance in terms of service and the quality of the products you offer?
In fact, we had two options: to initiate layoffs between 30 and 40 percent and continue with the rest of the staff, or to reduce salaries and keep up to 75 percent of staff in some cases. Especially during the beginning of the crisis and in cases of complete lockdowns, we were not able to pay salaries. The good thing is that with the return of the dynamics of the franchising process, we decided to pump part of the financial returns from it to our branches in Lebanon, and we called it the “Currency Depreciation Correction Program” (CDC), as we were keen to raise wages and salaries between 35 and 40 percent to enable employees to pass this stage with minimal possible losses.
As for the quality of the products that we offer, the matter may not apply to us directly, but the hospitality, food and drink sectors suffer from it, as there is no longer a qualified workforce to manage the sector as a result of the terrible devaluation of the currency, which prompted some professionals to migrate in search of job opportunities that match their aspirations and the way of life that they were used to in the past. In fact, a large number of competent people migrated, especially to the Gulf countries, even if the offers they received were 50 percent less than what they were in the past.
Being an entrepreneur, what initiatives will you take, in terms of re-employment and job creation, to avoid a societal explosion? Starting with promoting abroad in search of promising markets that protect the survival of companies, and how will this be reflected in creating job opportunities for the Lebanese citizen?
We must definitely take steps in the interest of the workers. The simple solution is for most companies to increase sales as much as possible and cut costs to keep the business running. Personally, we pursued a policy of diversification, as we have entered into the coffee business and now we have the Caspresso brand that we sell to supermarkets. Therefore, we must diversify our business and distribute our workforce in popular branches in order to achieve a material return to remain resilient, as there are no other solutions for us. On the other hand, in regards to re-employment, we are constantly looking for qualified employees who have sufficient knowledge and experience to move forward in managing this sector and improving its services, knowing that we are looking for a long-term relationship, creating careers and offering salary packages that are in line with market requirements and maybe more. Our company has taken the initiative to improve the value of low wages due to the economic crisis, through the CDC program that allowed us to raise wages by 30 to 40 percent as an incentive for employee self-sufficiency and empowerment. We must continue to work to preserve our human resources.
In addition to the above, we redoubled efforts to open new branches in Baghdad, Iraq and Libya. This aligns with one of our primary areas of focus by giving employees career development opportunities that allow for the continuous advancement of our employees and senior positions. This gives us the opportunity to send our employees to work for our franchisees. We are also conducting training abroad, especially in countries that now have large branches such as Egypt and others, or at branches under opening, which allows us to send a team from Lebanon to provide staff with sufficient expertise, similar to what happened after the opening of our branch in Syria last December.
In short, we are working on correcting salaries and sending employees from Lebanon to our branches abroad to earn fresh dollars.
In light of the fluctuations in all world economies as a result of the COVID-19 pandemic. Is it possible to talk about future plans in the medium and long terms?
There is no doubt that the COVID-19 pandemic had severe economic and financial repercussions, and this was reflected in the countries in which we are active throughout some 40 branches, but with the beginning of the recovery we have witnessed a significant improvement gradually removing the lockdown, because people naturally like to go out to restaurants and cafes. It is true that all world economies have been affected by the crisis, but this has not significantly affected our business sectors.
What does Lebanon need today to revive the sector in terms of the necessary infrastructure?
The State has many duties that it must perform in terms of infrastructure, from electricity to the Internet, roads, bridges, tunnels and many other things. But I think that relying on the State to manage its simplest duties is a waste of time, especially since State institutions are completely absent. We are used to taking individual initiatives. I think that the summer season will witness unprecedented tourism activity for several reasons, most notably the depreciation of the Lebanese currency’s value, which will increase the appetite of tourists from different nationalities to come to Lebanon, as well as Lebanese expatriates. In the hope that a regional political settlement will be reached in the region to remove this uncertainty that burdens all sectors.
To what extent is the launch of new concepts in the world of hospitality and F&B in line with the markets you target? Is it permissible to talk about launching concepts specific to each market separately?
Certainly, and I will give you two examples of that, one local and the other regional.
At the local level, the Batroun region is witnessing a large and unprecedented turnout, similar to what the Faqra region witnessed about two years ago. Therefore, the products that we offer for a specific region differ from others in proportion to the demand.
At the regional level, we allocate special concepts for each country separately according to need and demand. There is always a launch of new concepts due to the continuous development that the world is witnessing; with the difference between generations, the requirements differ, so any new development that you present to people at the global level is considered promising if the requirements are met.