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Beirut, the Phoenician phoenix

Tourism in Beirut is rising out of its ashes. In the midst of a reconstruction phase after fifteen years of civil war, Lebanon has had some difficult years since 2005. 2008 also looked equally morose, but in May the signature of an agreement marked the end of 18 months of intercommunity conflict and re-launched the destination’s appeal in an instant. Beirut had a record summer with an incredible afflux of clientele. Since then, optimism has been the rule and should lead to the re-launch of many hotel projects that have been on hold. With the opening of several palaces announced, Beirut is doing everything to resume its relaxed life and the prestige of its glorious past.

Beirut may be outraged, Beirut may be martyred, but Beirut is liberated. What is known as “the Paris of the Middle East” has gone through a tough period for three decades. Cross our fingers, today it seems to see the light at the end of the tunnel. Since the signature of the Doha agreement in May, the Lebanese capital is at peace once again. The election of the president Michel Sleiman and the nomination of a government of national unity restored confidence, immediately impacting tourism, one of the pillars of the national economy. By the end of May, hotel reservations rose sharply. After several years of frustration, the Lebanese diaspora, Middle Eastern tourists fleeing the heat of the Gulf – 40% of clientele– and Europeans with the French and British in the lead, have found their way back to the land of the Cedar. Fully booked flights overwhelmed automobile rentals, crowded restaurants and nightclubs: life has reclaimed its rights. Symbolic, the singer Mika has finally succeeded in organizing the concert she dreamed of in her native city.While Beirut continues to convalesce, the city will have to take up the challenge to capture a high volume of clientele to fill these new properties. “There is a risk of overcapacity in the short and midterm. With sporadic reprieves, it is difficult to welcome a higher volume of visitors or have a truly profitable hotel supply,” remarks Sofitel’s manager rather pessimistically. Fortunately Beirut is not short of assets for bringing this necessary growth of clientele: a financial center and the largest port on the Eastern Mediterranean, beach resort city and tourism hub for the historic sites of Anjar, Baalbek, Beiteddine, Deir El Kamar or Tyr and the snowy slopes of Mont Lebanon, and shopping with the forthcoming opening of Beirut’s souks. The city that hosted the Francophonie Summit in 2002 can also host large meetings at congress hotels such as the Crowne Plaza or the Phoenicia. One major unknown remains that is not insignificant in a region ready to erupt in violence: is the current calm here for the duration or just relative?At the end of the year, Beirut could thus see the record of the year 2004 step down. Between 1.3 and 1.6 million tourists are hoped for versus 1.2 back in 2004. It's a boost of oxygen for the land of the Cedar, where tourism has suffered a sharp descent. Representing 20% of the GNP before the civil war in 1975 with 1.4 million arrivals in 1974, the sector’s contribution dropped to nearly zero until 1990.The hotel industry also paid a high price for the country’s dissensions. In spite of itself, the Hilton group was involved in the civil war. A few days after its inauguration in 1975, the hotel became the center of inter-religious combat and never succeeded in opening its doors. The hotel St Georges, symbol of the city’s hours of glory and holiday destination for its distinguished guests, also bears the stigmata of war and has not resumed its operations either. The bombed tower of the Holiday Inn, the lair of snipers, remains a scar at the heart of Beirut.Devastated, Beirut has had to lick its wounds and repair the ravages of the civil war. The gigantic plan to rebuild the city center launched by Solidere, the Société Libanaise pour le développement et la reconstruction, made it possible to give offices to companies, seats to political institutions, hotels and boutiques to tourists. Many hotels were rebuilt and renovated such as the very lifestyle-oriented Méridien Commodore while others took advantage to open their doors such as the Metropolitan Palace of the Habtoor group in 2001, the Crowne Plaza in the center and Mövenpick on the shore in 2002, then the Royal in 2003. Thanks to this effort, the sector posted a progressive recovery that led to growth rates of close to 8-10% in the early 2000s reaching a peak in 2004.But since then, Beirut has continued to run after the record it reached that year. Announced each year, it keeps being deferred to the Greek –or Phoenician in this case– calends. In February 2005, the assassination of the Lebanese Prime Minister Rafic Hariri slowed tourism development. 2006 could only get better... or so they thought... While the first months offered good augur, in July there was a relapse. The Israeli offensive against the Hezbollah at the beginning of the summer brought on a wave of departures and cancellations while the season looked very promising. But bad luck comes in threes: political instability in 2007 discouraged a good share of traditional clientele. Results were worse than in 2006. “During this period, we adopted precise management of provisions, careful cost control, a more flexible and elastic price policy as well as management of paid holidays without lay-offs or salary cuts,” explains Claude Rababy, manager of So.tel Le Gabriel. The only cause for satisfaction during this new black period: the Lebanese diaspora shouldered tourism as best it could. In 2007, 42% of tourists from abroad were Lebanese passport holders. For long months and until last May, hotels operated at low speed, between 30% and 40% OR. Without the Doha agreement, the summer 2008 season would have been equally morose. The good surprise thus heartened hoteliers. For August, the RevPAR leapt up 193.8% with an OR of 93.9%, or up 42.7 points! For example, the Ramada Beirut Downtown (99 rooms) had a record pre-opening, posting no vacancy even before its official inauguration at the end of September. “Demand was so high: travel agencies, individuals…everyone was looking for a room,” rejoices Joe Abdel Massih, general manager of the hotel who sees this success as a confirmation of the property’s good positioning: “this type of hotel is what was missing in the city center for a clientele that does not want to pay the 5* price but wants the city right there”.The year-end festivities already appear excellent for hoteliers. And if the calm is confirmed, Lebanese tourism could begin its march forward. Hotel development is preparing to gain new momentum with the return of confidence. Many projects that have been on hold in recent years are back in the works. The Four Seasons, originally planned for 2005, is in the finishing stages across from the marina, in Ain El Mraysseh, the neighborhood of the great hotels where the two InterContinental Phoenicia hotels and Le Vendôme are also located. If all goes well, its opening has been scheduled for next year. And it meets its match in a select competitor. Located in the center of the city, Le Gray, also scheduled for 2009, now positions itself as one of the future stars of Beirut’s hotel industry. Gordon Campbell Gray, who is at the origin of the One Aldwych in London, fell in love with the city’s particular atmosphere. And he plans to transpose the keys to his London success in the Near East with a personalized, ultra-modern and ultra-luxury boutique hotel with 80 rooms.The projects forecasted include the opening of a Grand Hyatt (348 rms.) at the heart of the business district in the second quarter 2010. Like a phoenix, this hotel will rise up on top of the ashes of the old Hilton demolished in 2002. The project developed by the Société Méditerranéenne des Grands Hôtels should cost over 200 million dollars. And Hilton in all that? While the brand Holiday Inn, another victim of the civil war, has succeeded in finding a place in Beirut, the American group still has not set foot back in Lebanon. But it is not as though it hasn’t tried. Openings have been announced several times - in 2006 and then in 2008 – only to be postponed. For the moment there is no current news. Nonetheless, the group has not lost all hope of putting an end to the malediction that haunts it. There remains one significant gap in Beirut’s inventory: the standardized economy hotel segment. “It is difficult to build in the city’s center but it is necessary for success. Whoever succeeds in doing so will be a sure winner,” advises Claude Rababy.While Beirut continues to convalesce, the city will have to take up the challenge to capture a high volume of clientele to fill these new properties. “There is a risk of overcapacity in the short and midterm. With sporadic reprieves, it is difficult to welcome a higher volume of visitors or have a truly profitable hotel supply,” remarks Sofitel’s manager rather pessimistically. Fortunately Beirut is not short of assets for bringing this necessary growth of clientele: a financial center and the largest port on the Eastern Mediterranean, beach resort city and tourism hub for the historic sites of Anjar, Baalbek, Beiteddine, Deir El Kamar or Tyr and the snowy slopes of Mont Lebanon, and shopping with the forthcoming opening of Beirut’s souks. The city that hosted the Francophonie Summit in 2002 can also host large meetings at congress hotels such as the Crowne Plaza or the Phoenicia. One major unknown remains that is not insignificant in a region ready to erupt in violence: is the current calm here for the duration or just relative?

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