CATCH ALL

Lebanon 2012 | TOURISM & RETAIL | REVIEW: TOURISM

Multi-faceted and steeped in tradition, Lebanon's tourism sector looks to overcome regional challenges and continue being a significant contributor to GDP.


Well known for its cultural diversity, archeological riches, and unique blend of East and West, Lebanon has leveraged its tourism potential to boost GDP. The only country in the MENA region that offers skiing and related winter activities, Lebanon has a diverse touristic base that includes 200 kilometers of seashore and 300 days of sunshine—making it possible to both ski and sunbathe on the same day. The country also offers diverse eco-tourism activities, a budding MICE tourism base, and five world heritage sites.

The direct contribution of the sector to GDP is expected to be $380 million, or 9.4% in 2011. The wider economic impact of the sector, however, is estimated to come in at around LBP31 billion, or over $2 billion. A total 432,000 people are also currently employed in the travel and tourism sector, and 10.2% of total national investment is expected to flow into the industry in 2011.

Headed up by the Ministry of Tourism, Lebanon's tourism drive seeks to leverage its position as a destination for its diaspora to a location for a more diverse base of international tourists. A total of 2.35 million international tourists arrived in 2010, up from 1.14 million in 2005. A decline in arrivals overland, however, has been noted in 2011 due to instability in Syria. According to the Ministry of Tourism, whereas 600,000 people arrive on average overland per year, the numbers were down by 50% in the first half of 2011. “We still managed to see an increase in tourism receipts, however, because we are emphasizing middle-income rather than lower-income groups," Fady Abboud, Minister of Tourism, told TBY. Average spending is one of highest figures in the world, standing at around $4,000 in Lebanon—reflective of Lebanon also being a prime retail destination.

ARRIVALS

Lebanon boasted the highest growth rate of arrivals in the world in 2009 at 39%, and growth continued into 2010 when total arrivals reached 2.35 million. However, unrest in Syria has lowered overland arrivals by 50% in 2011, and Lebanon's only international airport—Rafic Hariri International Airport (RHIA)—also saw a slight drop in arrivals over the January-July 2011 period to 1.61 million arrivals from 1.64 million over the same period in 2010. The number of incoming traditional tourists, however, totaled 1.13 million in the first eight months of 2011, a decrease of 24.5% in the same period in 2010, according to Byblos Bank Group. Arab tourists accounted for 33% of total visitors, followed by tourists from Europe at 30%, Asia at 16.5%, the Americas at 14%, Africa at 3.4%, and Oceania at 3.2%. Figures from RHIA also show a general slowdown, with total airport passengers, including arrivals, departures, and transit passengers totaling 3.13 million in the first seven months of 2011, up only 0.6% from the previous year. A total of 36,037 flights were recorded, of which Lebanon's national carrier Middle East Airlines accounted for 33%.

HOTELS & SPENDING

Hotels have also been affected by conflict in the region, and occupancy rates were recorded at 67% in July 2011 according to Byblos Bank Group, down 9.8% year-on-year. Revenue per available room (revPAR) came in at $189 in the same month, a drop of over 20%. While figures from Lebanon still remain above the Middle East region average, an 8.7% increase in average occupancy and 9.2% increase in revPAR year-on-year was recorded. Average revPAR in Beirut over the first seven months of 2011 came in at $123, behind Muscat on $135 and leader Dubai's at $183. Positive trends prior to the Arab spring, however, offer hope that the downturn is temporary as Arab tourists look outside the region. “We are operating at about 50% of the rate we were seeing in 2010. A lot of reservations are being lost from Arab countries to Turkey or London," Ghassan W. Naaman, General Manager of Monroe Hotels, told TBY.

The expansion of the hotel sector is also expected to come in line with the development of the MICE tourism industry in the country. Investor attention is now focused on the three- to four-star market, where there is significant future potential. “The corporate sector often prefers these kinds of hotels, which are especially common in places such as Paris and London," commented Naaman.

In addition, according to Global Blue, the VAT refund operator for foreign shoppers, tourism spending was up 8% year-to-September 2011. Visitors from Saudi Arabia accounted for 21% of total tourist spending over the nine-month period, followed by the UAE (12%), Kuwait (9%), Syria (8%), and Egypt (5%).

Despite unrest in neighboring Syria, total tourist spend from there was estimated to have risen 12% over the period, although Emiratis saw their spend rise by a more impressive 17%. Spending by Egyptian visitors actually contracted by 17%, as did the level for Jordan (-6%), Kuwait (-5%), and Saudi Arabia (-4%). Beirut was the center of tourist spending activity, accounting for 83% of the total, while in terms of products purchased fashion and clothing was the main ticket item, at 74%.

THE MIX

From traditional winter and summer tourism to cultural, culinary, eco, and MICE tourism, Lebanon defines itself in the region as a catch-all destination with much potential for growth and investment. Aside from conventional sun, sea, and sand tourism, the country is a host to winter tourism activities. The InterContinental Mzaar Ski Resort at Faraya-Mzaar has direct access to 80 kilometers of slopes. “We are aiming for guests from abroad, and want to make the area an increasingly well-known tourist destination," Andrea Wrba, General Manager of the InterContinental Mzaar Ski Resort, told TBY. In total, there are six ski resorts, most of which are within 60 kilometers of Beirut.

The country is also home to five world heritage sites: Anjar, Baalbek, Byblos (Jbeil), the Qadisha Valley and Cedars Forest, and Tyre. Beirut, however, continues to be the top destination, attracting people with its lively nightlife, numerous restaurants, and rich history. In addition to Beirut, however, 6,000 year-old Sidon is also an upcoming destination, and the country itself is dotted with historic relics and cultural attractions. Niche tourism confirms Lebanon as a multi-faceted tourist destination. The country's long history of winemaking is another aspect of the mix. “Tourists can come and explore the wine grottos, wonder at the scenery, and enjoy walking through the vineyards, right up to the highest point of the Bekaa Valley," Michel de Bustros, General Manager of Château Kefraya, told TBY. The potential for expansion is also evident, “Our winery includes a beautiful one-hectare garden, and we even have a 300-seat restaurant. In the future we plan for a museum and a hotel," Bustros added. Golf is another facet of Lebanon's diverse tourism sector, and Jihad Husseini, Chairman of the Golf Club of Lebanon, is upbeat about what the sport says about the country. “We, as a club, are representative of Lebanese society in that we are very multicultural."