Lebanon’s tourism sector may have achieved record-high numbers in 2009, but still has a long way to go before it achieves its full growth potential. The long years of civil war devastated infrastructure and the tourism industry was left with outdated laws and little government investment. Experts say that authorities have a lot to do in order to better promote the country and make it tourism-friendly.
The major issue facing the tourism industry is the security problems and political instability that have reigned over the country the last few years. In this climate, industry players such as hotels, restaurants and even the tourism ministry can do little but sit and hope for the situation to remain at least as calm as it was this year, when more than 1.4 million tourists arrived in the first nine months, despite the parliamentary elections and a four month delay to the government formation.
“[The elections] had no effect on tourism flow towards Lebanon, as was confirmed by concerned authorities, statistical institutions and the media,” said Jean Abboud, president of the Association of Travel and Tourist Agents in Lebanon.
A destination unknown?
Industry experts say the most important step the authorities need to take is to promote Lebanon in foreign countries, especially in Europe, where some still have a poor perception of the country’s political and security situation, while others still have difficulty finding Lebanon on the map.
“There is no campaign for Lebanon. We are happy that Arabs are coming…but it’s not enough,” said Sandro Saade, chief executive officer of Wild Discovery, the tourism entity of Lebanon-based Johnny R. Saadé Holdings.
The Ministry of Tourism, with its small budget – estimated at between $6 million to $7 million by its former minister Elie Marouni – can do very little in promoting Lebanon abroad. To perform better, the ministry should either have its budget increased or collaborate with the private sector.
“The ministry is trying to do the most it can with two things, the budget that it has and the human capital that it has,” said Pierre Achkar, president of the Federation for Tourism and Hotel Association in Lebanon. However, Achkar said that considering the salaries the ministry is offering, it is unlikely that it will be able to attract the skilled workforce it needs to help create a marketing strategy.
Achkar’s solution would be to re-create the “National Council of Tourism,” which existed before 1992. It would be made up of experts in the private sector and its role would be to develop the needed promotional strategy. It would operate on the budget originally allocated to the marketing department in the ministry.
“We have many suggestions, such as taking the percentage of the VAT that the restaurants and hotels are paying and using it to finance the council,” said Achkar.
This might not be the only solution to better promote Lebanon, and different experts have different ideas, but what they all seem to agree upon is that more capital should be invested in the sector to ensure its continuous growth.
“The tourism industry has been a major source of revenue, a major provider for all kinds of jobs,” said Abboud. “Authorities should start spending more money to promote the country abroad.”
“The hotels would help the Ministry of Tourism but they have to come up with a plan,” said Ihab Kanawati, general manager at the Crowne Plaza in Beirut. “Let them knock on the doors of the hotels and tell them we need your help… I don’t think anyone would say no,” said Kanawati.
Europe as an untapped market
Arab gulf nationals represent 41 percent of the total number of tourists coming to Lebanon, while Europeans represent only 26 percent, according to numbers provided by the Ministry of Tourism. Statistics also indicate that the number of Europeans visiting increased by some 30 percent in the first nine months of the year, compared to the same period in 2008.
“We are definitely seeing more Europeans, but we are still not at the level that we should be,” said Wild Discovery’s Saade.
According to the tourism ministry, one of the major reasons Europeans shy away is political instability and security issues.
“When things started to happen, some governments forbade or
advised their citizens not to come to Lebanon,” said Nather Auchi, vice president at Le Royal Hotel.
Gordon Campbell Gray, owner of Le Gray Hotel — recently opened in Beirut Central District – said that “most people do not understand politics and foreigners have no idea [about the reality of Lebanon].”
Gray said that when he came to Lebanon, a lot of people in England said he was crazy. “For me, political stability is all that’s needed,” he said. “Everything else is there and at the moment it is very good.”
The other reason, said Saade, is that Europeans usually come with lower budgets and find Lebanon expensive. In order to attract a larger number, more three-star hotels should be built to provide tourists with clean rooms at cheaper rates.
“If Europeans want to come to Lebanon, they need to have a budget, they have to be relatively wealthy to come,” said Saade. “We need to invest more in this [three-star hotel] concept, which is not always easy due to real estate prices.”
The experts consider European tourists a viable potential growth market since Europeans have a tendancy to travel for cultural tourism, which is a segment still lacking much development in Lebanon, as opposed to business or entertainment tourism.
“They are close, only three to four hours by plane…so they are a big potential for Lebanon,” said Achkar. He added that occupancy rates drop significantly outside Beirut. Given that many of Lebanon’s cultural attractions lie outside the capital, increased numbers of European visitors would help balance the distribution of tourism across the country.
Infrastructural blues
Hotels and resorts usually have their own electricity generators and water supplies in order to mitigate power cuts and water shortages, but one of the major issues the industry is suffering from is the lack of adequate public transportation.
“The private transportation sector (buses and taxis) are not sufficient and are not well controlled,” said Abboud. “Beirut’s Rafiq Hariri International Airport taxis have their own authority and charge as much as they decide to.”
The incomplete and outdated infrastructure also creates a lot of traffic, which experts say has a negative effect on tourists.
“They come without knowing what it is like, but when they see it they get annoyed,” said George Petrakian, owner of Tania Travel. “The traffic laws and regulations should be changed.”
Help wanted
Another major concern is the lack of a professional workforce, which for the last few years has been drawn to the booming economies of the Gulf. Though many predicted that with the financial crisis a large number of workers would return home, such a trend has not materialized.
“The situation got worse in 2009; none of those who left came back,” said Paul Ariss, president of the Syndicate of Restaurant and Café Owners in Lebanon. “All hotels and restaurants [in Lebanon] faced dramatic recruitment situations last summer and they had to rely on amateurs…the crisis in the Gulf area had a very minor effect on the restaurant business, except in Dubai. Qatar and Saudi Arabia are still recruiting.”
“When any hotel wants to open [over there], we feel it,” agreed Achkar. “People start taking days off and resignations start to appear.”
Obey the law…or don’t
Some tourists, mainly Gulf visitors who are known to be wealthy, also face issues of overpricing.
“We had problems with pricing manipulation; they (restaurants) weren’t abiding by the prices on the menus,” said the former Minister of Tourism Elie Marouni. “The role [of the tourism police] is to monitor the pricing and implement the decisions we make regarding the complaints that we receive.”
However, some question whether or not the tourism police are taking appropriate action on complaints. “The Ministry of Tourism, although having received many complaints, did not take any administrative or legal measures against any institutions,” said Ariss. “By law, all institutions are obliged to expose their price list (confirmed by the ministry) at their entrances and no one did any checking.”
Business keeps on booming
Although several challenges still need to be addressed in the industry, all the market players Executive spoke with said that even if all current problems remain in place, as long as political stability holds, the industry will grow.
“We have no reason to expect slow business,” said Kanawati. “Things are moving in the right direction and if we move with them we should expect more business flowing to Lebanon in the next few years.”
