Problems of overtourism this year have shaken several high-profile destinations around the Mediterranean basin – long the world’s most tourism-intense area. Protests against urban overcrowding with under-regulated short-term accommodation models in Barcelona have made global headlines. In Spain, Italy, (two of the top ten global rankers by international tourist arrivals) and other Mediterranean countries that attract holiday makers by the mega-millions, administrations have been introducing laws and regulations attempting to control the so-called Airbnb market as well as daily visitor flows to tourism hotspots more effectively.
In this fine summer, however, overtourism and protests against it, makes for one problem that Lebanon doesn’t have. Instead, the summer of ‘24 appears ripe for the record books as having witnessed the most twisted tourism sector fortunes and shakeups during a single key season. The reason for the hospitality sector’s economically harmful rollercoaster is the changing perceptions of war risk and outbursts of panic fueled by belligerent posturing and recent deeds of infamy.
Cross-border conflict in the south and parts of the Bekaa has been heating up and slowly expanding after somewhat controlled (by “rules of engagement”) but not nationally controllable altercations between Hezbollah and Israeli forces erupted in October of last year. For several months, however, well into the spring of 2024, local tourism appeared relatively unfazed by this conflict risk and waves of hasty travel warnings by, supposedly friendly, international powers.
Whereas the first quarter of 2024 according to the Ministry of Tourism saw a very significant 13.52 percent year-on-year decline to 237,633 visitor arrivals, down from 274,787 in the same period of 2023, many leaders in the hospitality sector were not all too worried. The size of the drop was sharp but not catastrophic. Furthermore, low hotel visitor numbers are not unusual during the January to March or even April period (in 2023 against 2022 Jan-Apr hotel occupancy rates, for example) and can still be followed by a very good summer.
Cynthia Flouty, the Director of Sales and Marketing at the Phoenicia Intercontinental Hotel in Beirut says that first-quarter data is not necessarily a strong indicator of annual tourism performance. “While the Q1 numbers are concerning, they don’t tell the whole story,” she explains. “Lebanon’s tourism sector is heavily seasonal, with the summer months typically drawing a significant majority of the annual visitors. First-quarter figures, therefore, often paint an incomplete picture of the year’s overall performance.”
However, Flouty acknowledges the obvious problem. The shockwaves from the ongoing war in Gaza and the subsequent conflict between Israel and Hezbollah did eventually reach the hospitality industry. “Many countries urge their citizens not to travel to Lebanon due to high risks of armed conflict,” she notes, referencing travel warnings issued by numerous foreign embassies.
As summer arrived with its swell of visitors, numbers rose to 411,320 in July 2024. However, these numbers, combined with the previous months and based on a dwindling outlook for the rest of the year, don’t appear to be on track of matching 2023’s recorded total of 4,109,962 visitors. “This summer compared to 2023 is not good,” says Flouty. “All these numbers are Lebanese expatriates who have their homes and families here, not foreigners and Arab tourists.” And even Lebanese expats are less inclined to come at all, or choose to curtail a lengthier stay due to both safety concerns and security-related flight cancellations.
The volatility of developments in Lebanon and the region have also created moments of panic linked to cancelled flights. For example, during one particularly tense week marked by attempted ceasefire negotiations and an anticipated retaliation from Hezbollah and Iran after Israel’s assassination of Fouad Shukur in Beirut and Ismail Haniyeh in Tehran, LBCI reported a decrease in arriving passengers at Rafik Hariri International Airport from 12,964 on August 15, 2023, to 8,136 on the same day in 2024.
“This summer has been particularly difficult for us compared to 2023. We’ve seen a dramatic 50 percent drop in reservations year-over-year. Traditionally, our clientele has been quite diverse, drawing tourists from Europe, Latin America, and Arab countries like Qatar, Kuwait, Egypt, and Iraq. However, recent geopolitical events have severely disrupted this pattern,” says Flouty, adding that the hotel experienced an immediate double blow to bookings as travelers from Europe and North America “scrapped their trips due to the situation in Gaza, while many of our Arab guests were forced to cancel because of airline suspensions.”
Perils of an inhospitable political and security climate
The summer of ’24 may be the wildest rodeo in the history of inbound tourism, but it is by far not the first time that the sector has suffered disruption. Constituting a vital sector in Lebanon’s services economy, tourism has experienced dramatic ups and downs over the past two decades, mirroring both the international as well as regional political climate and the country’s unstable economy.
In the early 2000s, tourism struggled to gain traction following the civil war years, underperforming compared to other economic sectors, contributing around 10 percent to GDP. However, the industry saw a remarkable turnaround between 2005 and 2008, with tourist arrivals increasing from 1.14 million in 2005 to 1.33 million in 2008, a 16.7 percent rise. During this period, tourism outpaced overall economic growth, becoming a significant contributor to the country’s GDP, reaching up to 20 percent by 2008. The influx of tourists, particularly from Gulf countries, drove up prices in restaurants, hotels, and real estate, making tourism an inflation driver.
Broader economic challenges, however, emerged between 2009 and 2011. The sector then faced a dramatic downturn with the onset of the Arab Spring in 2011, as regional instability deterred visitors and disrupted travel patterns. Tourist arrivals plummeted by 23.7 percent in 2011 compared to the previous year, dropping from 2.17 million in 2010 to 1.66 million in 2011.
Since then, Lebanon’s tourism industry has struggled to regain its footing, buffeted by ongoing regional conflicts, domestic political instability, and global economic uncertainties. Despite occasional rebounds, such as the 11 percent increase in arrivals in 2017, reaching 1.86 million visitors, the sector has struggled to regain its pre-crisis levels. By 2019, however, tourism accounted for approximately 18 percent of Lebanon’s GDP. This performance helped elevating Lebanon’s international tourism revenue as percent of GDP to 7.47 percent over the entire 1995-2020 period, representing a very respectable 13th rank of in an analysis of the World Tourism Organization.
This performance, however, was followed by the crash induced by the COVID-19 pandemic, which saw hotels lay off people by the thousands and restaurants close their doors by the hundreds. Despite the trough of 2020 and 21, the years 2022 and 23 saw new initiatives in niches like guesthouses with personal-professional flair and expansion of the Lebanese Airbnb market. Still, the data of the current year suggest that the challenges for the tourism and hospitality sector will persist until the regional situation takes a massive turn to the better.
Short-term rentals and long-term problems
The short-term vacation rental market was a hospitality segment that had seen significant growth up to this summer. According to some reports from the middle of this year, the number of rental offerings grew by 3,000, over 55 percent of the then existing supply, between May 2022 and May 2024.
Platforms like Airbnb have gained traction, offering visitors more diverse and often more affordable accommodation options compared to traditional hotels. Samer Helou, an Airbnb host and property manager tells Executive about his trajectory on the popular platform. “I started in summer 2020 when my cousin gave me the opportunity to manage his apartment in Beirut on Airbnb. Now, I have my own page on Instagram and Facebook, where I promote a portfolio of 25 to 30 properties.” These include apartments in various Lebanese locations such as Beirut, Jbeil, Batroun, Faqra, and Bikfaiya, as well as international offerings like a private villa in Greece and an apartment in Cyprus.
However, he notes that the Airbnb model, which has been under fire from locals of various cities around the world, faces its own unique cultural and practical hurdles in Lebanon.
According to Helou, “the Airbnb platform works better abroad than in Lebanon.” He says that “Lebanese customers have a different mindset. They prefer to communicate directly with the owner or manager rather than booking online.” This preference for personal interaction extends to financial considerations as well. Helou points out that many local clients are reluctant to pay the additional 15 percent guest service charge imposed by Airbnb.
Moreover, he highlights a crucial practical obstacle: “Not all Lebanese have fresh dollar cards to pay online; many prefer cash transactions.” This lack of access to international payment methods, a direct consequence of the country’s ongoing economic crisis and banking restrictions, further complicates the use of global booking platforms like Airbnb in the Lebanese market.
Some Lebanese opportunists are seeking to capitalize on Lebanese guests’ preference for personal interaction and cash payments. Nagi El Husseini launched LBnB in June 2021, a platform specifically tailored to the Lebanese market. LBnB is not licensed by the Ministry of Tourism but is registered as a company and trademark at the Federation of Chambers of Commerce, Industry and Agriculture since 2001. The venture is personally funded by El Husseini. “Because of the financial crisis, people couldn’t use Airbnb anymore, so we created a Lebanese Airbnb where everything is in Lebanese pounds.” According to him, “We’re not competing with Airbnb. We’re complementing it and trying to fill the gaps in the market.”
El Husseini’s initiative aimed to promote domestic travel and bypass foreign currency restrictions imposed by banks, bypassing stringent foreign currency controls by allowing users to book accommodations and experiences using the rapidly depreciating Lebanese Pound. In its initial two months, LBnB garnered significant attention, attracting 10,000 users. However, technical shortcomings hindered LBnB’s ability to handle the demand. “We rushed the module, and it couldn’t handle the massive influx of users,” El Husseini tells Executive. Consequently, the platform was forced to shut down by the end of summer 2022.
Misfortunes never come singly
As Lebanon’s economic crisis deepened and the country transitioned to a dollarized economy, the initial impetus for LBnB waned. “The shift to a dollarized economy changed the game,” says El Husseini. “The original problem we were trying to solve was no longer as pressing, everyone is paying in dollar without any problem so we realized we needed to evolve LBnB’s concept.” LBnB is now poised for a global relaunch in 2025, offering a wider range of services to compete on an international stage.
Besides the financial calamities and economic woes that were turned by the ever-enterprising Lebanese minds into innovative business concepts, the short-term rental market has not been impervious to the conflict-induced drop in visitor confidence. As one example, Helou recounts that “a Lebanese lady living abroad had planned to rent a furnished Beirut apartment from January 2024 till January 2025 for a project she wanted to work on in Lebanon. But on the third week of October, after the war in Gaza started, she sent me an email canceling her reservation.”
Trip cancellations and hesitation among potential visitors, particularly from abroad, worsened in July and August following embassy warnings. The impact extends beyond Beirut to other popular tourist areas. Maguy Ghorayeb, owner of Beit El Deir, a private villa in Deir el Qamar in the Chouf region, notes that “in October, there weren’t many bookings because people were afraid to come from the Damour road due to what’s happening in the South. They preferred renting places in the Keserwan district instead.”
The suffering of MICE
While Airbnb operators glean profitability from high sensitivity to cost-benefit ratios, the impact of the latest crisis on the market for meetings, incentives, conferences, and events (MICE) is severe. The hotels catering to business travelers, face crippling challenges.
“For Phoenicia Hotel, our core market is business, not tourism. There are only three or four months for tourism, and the other eight to nine months are for business. This year, we didn’t have conferences, congresses, or exhibitions. They were all moved to other countries due to instability in Lebanon,” Flouty explains. “Rebuilding MICE tourism will require not only an improvement in the regional security situation but also a concerted effort to rebrand Lebanon as a safe and attractive destination for business events.”
On the whole, the troubles of 2024 appear set to write forth a demographic trend wherein the majority of visitors to the country are Lebanese expats. For the past three decades, Lebanese expatriates have consistently formed a significant portion of inbound tourists and there is no end in sight to the diaspora’s love and affection for Lebanon. Many expatriates actually appear to be actively increasing connections with their homeland, regularly visiting to nurture familial ties and cultural roots despite the ongoing difficulties that deter international and regional visitors.
Flouty notes that “While they [visiting Lebanese from abroad] do contribute to the local economy, they don’t necessarily book hotel rooms. Many stay with family or in their own properties, directly impacting our occupancy rates.” It seems then that the attachment to family, rather than the growth in the number of short-term vacation rentals, is a major shaper of visitor behavior. Moreover, regardless of their disruptive impact on economic models and the inflationary pressures that accompany all tourism, the vital direct diaspora inputs to national GDP look like some of the most bankable and reliable variables for the hospitality sector in coming years.
Established patterns and emerging trends in the sector
While hotels may suffer, innovative guest houses and individual operators, especially those located away from conflict-threatened areas, are benefitting a clientele base composed primarily of both Lebanese expats and locals. “While we’ve definitely seen a drop in international bookings, we’ve noticed an uptick in local Lebanese seeking staycations,” Ghorayeb says. “Our villa is even hosting families from Beirut looking for a temporary escape from the city.”
Since around 2020, a new trend has emerged in Lebanon’s real estate market, spanning from the bustling streets of Beirut to serene mountain towns. Property owners are capitalizing on the country’s vibrant social scene and the growing demand for unique event spaces by repurposing their homes, terraces, and private pools to host weddings, engagements, and birthday celebrations.
“Over the past two years, we’ve witnessed a 50 percent surge in requests for unique, intimate venues,” Helou reports. “Interestingly, the demand is almost equally split between urban and rural settings. In Beirut, clients are drawn to the urban chic aesthetic, while mountain locations appeal to those seeking the allure of nature and traditional Lebanese architecture.”
Ghorayeb has sought to use her villa to capitalize on this new demand. “Last summer, we could accommodate small weddings of up to 120 guests. With our recent expansions, including a new pool and additional space, we were able this summer to host events for up to 180 people,” she says. “We’re also exploring the possibility of hosting concerts,” she adds, “as part of our strategy to position the villa as a premier entertainment destination in the region.”
As the landscape of Lebanese hospitality offerings is becoming crowded with new entrants, new spaces for collaboration are opening up. Hotels are increasingly recognizing the potential benefits of partnering with online platforms, causing El Husseini to take note. “Our platform will have a section for hotels who are interested to be on such platforms where they receive more bookings,” he says.
Although the potential for these mutually beneficial partnerships does exist in an industry that continues to adapt to changing market dynamics, Flouty sees limitations related to the need of Lebanon’s hospitality industry of adopting global brand standards as well as local market demands. She notes that local and non-chain hotels are the most likely to engage with domestic platforms. “As an international chain hotel, Phoenicia Intercontinental operates under specific guidelines and booking systems,” she says.
Innovative responses in the F&B Sector
President of the Syndicate of Restaurants, Cafes, Night-clubs, and Pastries, Tony Ramy, speaking at the HORECA Expo in Beirut—a networking platform for professionals in the hospitality industry—in April 2024, announced that approximately 330 new restaurants opened in Lebanon during 2023.
Odette’s Mexican Taqueria in Achrafieh, founded by Ziad Ghorly, is an example of how certain venues are flourishing despite the country’s volatility. “I opened my restaurant in June 2023 and although there is a lack of the government infrastructure, it is a personal initiative,” Ghorly says. “In this country we must take risks and not wait for the perfect time because there is no perfect time. I see F&B as one of the sectors that are working in Lebanon. Lebanese people love to go out to eat and try new things; for them, this is a way of stress relief.”
Since opening, Ghorly has already expanded to include an upper floor in 2024. He notes a significant shift in his customer base over the past year: “Last summer was better than this summer, where we received foreign customers who used to rent Airbnbs in Achrafieh or nearby. But this summer there were only local Lebanese or expatriates.”
Despite this change, business remains steady. “It was a busy summer for our restaurant, we are fully booked each day,” Ghorly reports. Lebanon is known for its ability to hold contradictions: even when war dominates the headlines, the atmosphere in Beirut can feel relatively normal, if interspersed sporadically by the disturbing sounds of sonic booms from Israeli warplanes above. “The situation in the south didn’t affect the flow of customers,” Ghorly says, adding, “When Israel hit Dahieh, two tables canceled their reservation, but the day after I was fully booked. This is an example that Lebanese people want to live no matter what.”
While international visitors bring in much-needed foreign currency, the rise in domestic tourism and creative repurposing of spaces for events showcase the industry’s adaptability and potential for growth. The tourism sector, which has long catered to a mix of international and diaspora visitors, must now adapt its strategies to address the evolving needs and expectations of this loyal but distinct customer base.
Looking ahead, the sector’s recovery will hinge on its capacity to balance short-term adaptations with long-term planning. And, of course, the best way to rebuild Lebanon’s hospitable image is by ensuring that the country is, indeed, welcoming and secure—an onus that falls on actors well beyond the scope of the tourism and hospitality industry.
