Go for broke: Lebanon's lively summer hides a bleaker truth

Lebanon's lively summer hides a bleaker economic truth
6 min read
05 October, 2023

After enduring years of economic collapse and heightened security tensions, Lebanon seems to have rekindled its vibrant summer spirit this year.

Beirut International Airport has witnessed daily traffic of more than 21,000 arrivals, while hotels and guesthouses have been consistently fully booked throughout the season.

A true breath of fresh air for the Cedar nation, especially considering that its GDP has dived by two-thirds since 2019, with an alarming 80% of its residents now dwelling below the poverty line.

"Lebanon's economic reliance on the dynamism of its diaspora and the inherently precarious, seasonal income generated by tourism is by no means novel"

According to the Union of Travel Agency Owners, from June to early September, two million passengers arrived at Beirut Airport's terminals, with 38% of them being non-Lebanese.

Hotels, meanwhile, reported an average occupancy rate of 70%. This economic achievement has been widely celebrated by the political establishment and mainstream media, which attributed this success to the enduring "resilience” of the Lebanese as well as to the country’s attractivity, in spite of instability and infrastructure challenges.

Several Lebanese officials, including Tourism Minister Walid Nassar, even hailed this as a "return to normalcy" and a "way out of the crisis”.

Lebanon's economic reliance on the dynamism of its diaspora and the inherently precarious, seasonal income generated by tourism is by no means novel.

In 2022, tourism accounted for a significant 24.7% of Lebanon's GDP, with a substantial 37.8% of this figure originating from financial transfers from the diaspora. Such income constitutes nowadays the core of the Lebanese economy, grappling with an acute financial crisis and a collapsed productive sector.

The influx of cash in summer months is restricted to only a few areas [Getty Images]
The influx of summer cash is restricted to only a few areas [Getty Images]

A relative success

Pierre Ashkar, President of the Lebanese Tourist Unions, does not entirely share the prevailing enthusiasm: "This summer outperformed 2022, but it was far from being an exceptional season. We can say that it was a good season, given the security situation, the paralysis of public institutions and the financial crisis", he moderates, while the country has experienced several episodes of security tension, notably on the border with Israel, and inside the Ein el Hilwe camp near Saida.

"We must not forget that 80% of visitors are Lebanese from the diaspora who have returned to visit their relatives and that in reality, those who are registered as foreigners are often Lebanese holding foreign passports," says Ashkar.

Despite its breathtaking scenery and rich heritage, the country suffers from a reputation for being troubled and conflict-ridden, which has deprived it of its main clientele: nationals from the Gulf countries.

"For five to six decades, tourists from the Gulf countries, from Saudi Arabia notably, contributed significantly to Lebanon's tourism industry, but in recent years they have stopped coming to Lebanon altogether. This has been a major blow to tourism, as they were the ones who consumed a lot and occupied suites in luxury hotels", he explains. Last August, several Gulf countries banned their nationals from visiting Lebanon, while travel restrictions have been in place since 2021.

Nevertheless, many establishments have been able to open, while new forms of tourism have developed, reflecting the new economic climate: "Nowadays, we see a lot of small investments, particularly in guest houses, which have seen impressive growth, to the detriment of luxury hotels. People no longer want to invest in big projects," comments Ashkar.

The number of guesthouses in the country has surged from a mere 20 in 2019 to a remarkable 220 today. Meanwhile, the vibrant city of Batroun has witnessed an impressive boom, with the addition of between 3,000 and 4,000 rooms compared to 2022.

Michel el Dib, who recently founded the "Medyt Lounge Club" in Dbayeh, is an example of those Lebanese entrepreneurs who see tourism as one of the country's few remaining profitable sectors. "There are a lot of tourists, this season has been motivating for everyone," he confides.

Nevertheless, the situation is still far from returning to normal for him: "We are paying outrageous sums for private generators because there is hardly any state-provided electricity. We are paying dearly for everything that should be provided by public utilities, and there is no help from the State to help tourist establishments bear this cost," he sighs.

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The Ministry of Tourism's lavishly-posted tourism campaigns across the country fail to disguise the public authorities' inaction in this area. "Lebanon cannot be an affordable destination when there is no public transport, no electricity and no running water," concludes Pierre Ashkar.

A tourist boom that poorly conceals social distress and rising inequalities.

In one of the world's most unequal nations, where the top 10% of the population owns 70% of the national wealth, the disparities within the tourism sector mirror this stark reality.

"It's an uphill battle to secure a well-paying job, typically hovering in the range of $200 to $300 per month. The situation is even bleaker outside of Beirut. When a job offering $400 a month comes along, I must seize the opportunity, but it still scarcely covers the expenses of rent and transportation," laments Ahmad, who juggles several jobs in hotels and restaurants

"It is true that restaurants and hotels are getting more customers, but a paycheck has not gone up at all. On top of that, tips have taken a big hit," he shares with The New Arab. Although salaries are predominantly denominated in dollars, they have failed to keep pace with the relentless inflation, which has persisted for several months. During the off-season, wages can be slashed in half, and many of the seasonal workforce is left without employment.

With no effective regulatory body and a lack of social safety net, profits persistently pool in the coffers of influential establishment owners, leaving the workforce wrestling with poverty and instability. Lebanese economist Roy Badaro elaborates, "The idea of 'trickle-down economics' doesn't hold sway in Lebanon, mainly because the very same individuals who control economic power also dominate decision-making bodies. As a result, the effect on the working class is marginal, if not completely absent."

"Tourism operates in a notably cyclical market, where the vitality seen during these few months is counterbalanced by an extended period of economic sluggishness," he notes.

These socio-economic inequalities are compounded by geographical disparities: "Monte Carlo Lebanon," which includes Beirut and a handful of coastal towns, stands in stark contrast to the rest of the country, which receives minimal public and private investments for most of the year. For Roy Badaro, "the ongoing economic resurgence, centred on tourism, remains localized, with its benefits primarily concentrated in a handful of dynamic regions."

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Service sector companies are trapped in a self-perpetuating cycle: as profits are only concentrated within a few months each year, they resort to substantial price increases to compensate for losses during the rest of the year. This approach hinders Lebanon's capacity to develop a competitive tourism sector, whose growth model is qualified by Roy Badaro as “unsustainable”.

Faced with an impoverished population and widening socio-economic disparities, the political establishment promotes a deceptive economic revival to conceal its shortcomings.

This narrative also serves as a justification for the absence of an agreement with the International Monetary Fund (IMF), which conditions the disbursement of a loan on the implementation of structural reforms. If the current "business as usual" yields profits, the nation would allegedly no longer require external assistance.

As a result, Lebanese citizens, forced to seek opportunities abroad due to the lack of prospects in their homeland, are rebranded as "tourists" by the political elite, and their temporary returns are depicted as a symbol of the “resilient Lebanese spirit”.

Sami Erchoff is a freelance journalist based in Beirut