It has been a tough year for Lebanon. The local tourism industry is lamenting what it sees as another lost year, with regional and local instability combining with the economic slowdown in some of its key markets to push down visitor numbers and impact earnings.
Tourism is one of the mainstays of the Lebanese economy, directly contributing just under 10 per cent of GDP in 2011, according to data from the World Travel & Tourism Council (WTTC). However, its total contribution to the economy is much higher, coming in at 35 per cent when factors such as purchases of supplies, the impact on the construction and services industries and ancillary services are taken into account. Tourism is also one of Lebanon’s largest employers, providing jobs for around 32 per cent of the national workforce.
This strong reliance on the sector means that in troubled times the wider economy will feel the impact of a tourism downturn. The WTTC has predicted Lebanon arrival numbers to fall by over 12 per cent in 2012 and with no end in sight for the long-running conflict in neighbouring Syria, prospects for 2013 are also glum.
It is not just the fighting across the border that is keeping tourists away. Conflicts within the country receive extensive media coverage worldwide, prompting countries, particularly in the Middle East – Lebanon’s main tourist market – to beef up existing travel warnings.
While speaking with The Daily Star, Pierre Achkar, the head of Lebanon’s Hotel Owners’ Association, said many hotels had already cut their room prices in a bid to boost visitor numbers, with reductions of 50 per cent not uncommon. Even with these cuts, occupancy rates were no better than 40 per cent, he said.
Lebanon also has to contend with the economic slowdown in Europe, one of the leading sources of tourists after the Gulf region, accounting for almost 30 per cent of arrivals. With Europe’s economy struggling, and with tour operators wary of the regional instability, it is likely few visitors from the EU will heed the message of the Lebanese government’s recent tourism promotion campaigns targeting the European market.
The uncertainty in the region has also drained the flow of capital into Lebanon, with a report by Ernst and Young in mid-October saying that foreign direct investment was down 84 per cent year-on-year for the first half of 2012, totalling just $95 million compared to the $609 million recorded in 2011.
Earlier this year, the Lebanese tourism ministry has announced a new initiative in a bid to revive the country’s tourism sector after months of stagnation. The initiative called ‘50 days of discounts’ involved discounts on airline tickets, at hotels and shopping centres for a period of 50 days.
Report from Oxford Business Group