Beirut tourism boom a blessing with costs

Region The start of Ramadan has brought a small measure of relief to Beirut's traffic-snarled roads.

Lebanon's tourism boom hides structural problems that are unlikely to be solved until the country's political situation stabilises.

Beirut // The start of Ramadan has brought a small measure of relief to Beirut's traffic-snarled roads. The number of license plates from Saudi Arabia, Kuwait and other Gulf countries, often on Hummers and other big SUV's, appears to have declined somewhat but the Lebanese capital still feels full to capacity. Officially, the country is celebrating a tourism boom, crowning a year of relative political stability. The ministry of tourism published figures showing arrivals in July at more than 1 million, a record high since the 1975-1990 civil war ended. The Lebanon Hotel Association also speaks of occupancy rates of 100 per cent in Beirut in the six weeks before Ramadan.

But the high number of visitors has puts pressure on the country's still fragile infrastructure, on its roads, electricity and water supply and the telephone network for example. And there is some doubt that the vital tourism sector, which directly accounts for about 10 per cent of GDP, is really about to take off. One indication is the hesitancy of some high-profile hotels to open their doors in the centre of Beirut. About half a dozen are in more or less advanced stages of planning and construction, some since 2004-2005, but opening dates keep being pushed back.

One project in the renovated downtown area of Beirut, Le Gray, by hotelier Gordon Campbell Gray, was to begin operations in June but will not open its doors before the end of October. The hotel blames this on work delays, saying: "It will always be the phoenix that rises no matter what and this is what makes us optimistic." But the delay does fit the pattern of others who have been considering opening for several years, such as the Hilton and the Four Seasons, but have held off so far.

"Those people are smart. They check with other hotels, what is the occupancy, and they see that the business is not here. If you average it for the whole year it's not that great," said Louis Hobeika, economy professor at Lebanon's Notre Dame University. It was Lebanon's failure to form a new government almost three months after the June 7 elections that had created new uncertainty, he said. He warned that many of the statistics being bandied about were inflated. Most visitors are Lebanese living abroad who come back for the summer, this year in larger numbers than before because of the relative calm.

But Lebanese visitors tended to have kept their own homes or stay with family and cannot be counted as real tourists, said Hobeika. "A tourist for me is a foreign national who takes a hotel and is just here to have fun. And if you take it by that definition the tourist season is quite average and maybe even below," he said. Pierre Achkar, the head of the Lebanon Hotel Association, said the summer season started very well, but only after people saw that the political situation remained stable after the elections. But then Ramadan came. "Unfortunately, Ramadan started on the 20th of August. It cut the season," he said.

However, Mr Achkar is confident that a continuing improvement in the security situation will put Lebanon back on the international tourist map. A He said there was a modest demand for luxury hotels. The city has some 3,000 luxury rooms and another 3,000 are under construction or are being planned. "I think we have a need but we don't have a need for 10,000 new rooms for example, so investment most go very slowly," he said.

Despite all the talk of record numbers of visitors, many Lebanese seem aware that they will not easily recapture the market share they had in the golden age, before the civil war. Many tourists from the Gulf have gone, never to come back, and as long as there is no clear long-term solution to the country's political and security problems Western visitors will not come in large numbers. Another problem is the debilitated state of the country's infrastructure. Endemic power cuts and water shortages drive up costs for the tourism sector, which has to invest heavily in back-up generators and water deliveries. And guests notice when they have bad or antiquated telephone services or when they are stuck in traffic.

On top of that the tourism sector is now experiencing a human resources problem. "We have a major problem with staff because between 2005 and 2008 a lot of our manpower left Lebanon, to Qatar, Dubai, Abu Dhabi and they are doing very well there. Some of them wait to see if there is real long term stability before the decide to come back," said Mr Achkar. [e-mail]