Whether for business, leisure, entertainment, health or cultural tourism, visitors flocked to Lebanon in 2009, and the country is regaining its position as a major tourism destination in the Middle East.
Since the onset of the global financial crisis, tourism numbers dropped not only in the Middle East, but also around the globe. In Lebanon, however, visitor numbers are reaching record highs. New hotels and restaurants are opening, investment in the tourism sector is pouring into the country and new jobs are being generated. Is Lebanon back to being the tourism and business hub of the region? Experts say that as long as security prevails, the answer to that question is a definite “Yes.”
Sky-high numbers
In the first nine months of this year, Lebanon received nearly 1,439,000 tourists, according to the Ministry of Tourism. This number is 46 percent higher relative to the same period in 2008, and 88 percent higher relative to 2007. Most of these tourists come from Arab countries (41 percent), while Europeans (26 percent) appear to still shy away from potential insecurity and political conflicts.
Lebanon saw the highest growth of incoming tourists in the first eight months of the year out of 165 countries worldwide, according to the United Nations World Tourism Organization World Tourism Barometer, issued in late October.
Only 15 countries witnessed positive numbers, with Lebanon being followed by Kenya (43 percent), Korea (15 percent), China and Syria (10 percent), and then the others. In the Middle East, overall tourism dropped 13 percent for the same period.
Hotel occupancy in Beirut reached 69 percent in the first nine months of 2009, according to the international accounting and consulting firm Deloitte & Touche, which was 41 percent higher than the same period last year. At the same time, the occupancy rate in the Middle East reached only 60.9 percent, down 11 percent compared to the same period in 2008.
According to Jean Abboud, president of the Association of Travel and Tourist Agents in Lebanon, around 35 percent of the total number of tourists used travel agencies in 2009: an increase of some 20 percent over last year.
Where tourism stands in the economy
The travel and tourism industry (T&T) is expected to generate $2.6 billion in economic activity in 2009, equivalent to 9.3 percent of the country’s economy, according to the World Travel and Tourism Council (WTTC). Direct industry employment is 150,000 (9.6 percent of total employment) this year. The WTTC 2009 report also said that since the industry touched different sectors of the economy, its real impact was expected to be higher: $7.8 billion (28 percent of GDP) and 440,000 jobs (28 percent of total employment).
As for the next 10 years, WTTC expects the T&T industry to achieve annualized real growth of 3.1 percent (reaching $4.8 billion in 2019) and 0.7 percent growth in the number of jobs (reaching 468,000 in 2019).
Number of hotels in Lebanon
Number of tourists (in 1000s)
First nine months of each year
Tourism investment
Investment into the tourism sector averaged around 18 percent of the total foreign direct investment (FDI) flowing into Lebanon over the past three years. Many of these investments were made through the Investment Development Authority in Lebanon (IDAL), a public investment promotion agency that aims to attract and facilitate investment in Lebanon through different schemes. So far, 33 projects have been completed through IDAL, said its Chairman Nabil Itani. Another five are in the pipeline.
“If you look at these projects by [the] numbers you can say that 40 to 50 percent are in the tourism sector,” said Itani. “In value, the number goes up to 93 percent, because tourism is a huge investment and mega projects are involved.”
Most of these projects are in the coastal areas (zone A, as classified by IDAL) and the bulk of the investment comes from Lebanese expatriates, followed by Arabs and international companies, explained Itani.
He added that future potential lies in investing in health resorts that include hotels, restaurants and medical services, as these are relatively cheaper in Lebanon than abroad.
“This is what we are studying now…but it needs incentives from the government to simplify the investment in this sector and to highlight its advantages,” he added.
An example health resort is the new $60 million Naas project in Bekfaya, developed by FFA Real Estate, an arm of FFA Private Bank.
“Creating a wellness resort is a good move…as it combines two booming sectors, namely real estate and health tourism,” said Georges Abou Jaoude, general manager at FFA Private Bank.
FDI inflow into the tourism sector
FDI inflow from Arab countries into the tourism sector
Hotels and restaurants
In the hotel industry, Pierre Achkar, the president of the Federation for Tourism and Hotel Association in Lebanon, said that in 2005 investment rolled in for 3,000 new rooms, with companies buying land and beginning construction. A few of these are Le Gray, the Four Seasons and Rotana, which are opening this year after many delays.
“These 3,000 rooms are a $2 billion investment and they represent 6,000 new working opportunities – minimum,” said Achkar.
Not only are hotels opening, but also new pubs, nightclubs and restaurants, which are a major attraction for tourists from neighboring countries.
“We believe that more than 500 new restaurants of all types have been established between 2008 and 2009: 75 percent in the Greater Beirut area and the balance in other regions,” said Paul Ariss, president of Lebanon’s Restaurant Owners’ Association.
Tax-free tourist spending by nationality, 2009 (Jan-Sept)
Tourist arrivals by origin, 2009 (Jan-Sept)
Back on the map
The international attention Lebanon received was a huge help to the tourism sector this year. The New York Times in January ranked Beirut as the top tourist destination out of 44 places, writing that, “The capital of Lebanon is poised to reclaim its title as the Paris of the Middle East.” British daily The Guardian also published an article in November that said “Beirut is back…and it’s beautiful.”
Fingers crossed
The fact that Lebanon finally formed a Cabinet in November is reassuring to those planning to visit, yet the lack of a government did not dissuade more than 1.4 million tourists who came to the country so far this year, nor did it decrease FDIs pouring into the sector.
Experts differentiate between security and political instability, which are not always correlated, and some are taking the government’s formation with a pinch of salt, hoping that security issues will not arise.
“Security is the main issue and not political instability,” said Itani. “That is what hurt the investment climate in Lebanon.”
This is not only the opinion of local experts, but also international professionals, who think prevailing peace in the region will stimulate further growth in the tourism sector.
“If peace returns to Iraq, Lebanon, Palestine and Iran, can you imagine how it will boost tourism in the region?” Jean-Claude Baumgarten, president and chief executive officer of the WTTC, told Gulf News.
“Hundreds of millions of people will travel across the region for business, pleasure and other purposes.”
