The tourism sector in Lebanon accounted for 30% of the gross domestic product (GDP) in 2023, with revenues reaching $6 billion. These figures will most likely be difficult to achieve this year, if the ongoing war in Gaza and its repercussions in southern Lebanon persist.
In 2023, revenues generated by the tourism sector – $6 billion – contributed to 30% of the GDP. However, the war in Gaza, which has been going on for over seven months, and the opening of the Lebanese southern front on October 8, have severely impacted the industry. As summer nears, the projections for the tourist season are relatively gloomy, especially for the hospitality sector.
While expatriates will still visit Lebanon for the summer vacation as usual, their visits will not, however, remedy the challenges facing the hotel sector, the car rental market, or guided tourist activities.
A harsh blow to the hotels
The regional situation is severely impacting the hotel industry, which finds itself at the forefront of the fallout from the Gaza war spreading into southern Lebanon. Despite Lebanese expatriates returning home amidst border tensions, foreign tourists are notably absent.
"The hotel sector is being severely affected," notes Pierre Ashkar, the President of the Federation of Tourism Syndicates and the Hoteliers Syndicate, in an interview with This is Beirut. Ashkar stresses that most expatriates who come home for the summer own residences. He highlights the dire situation of hotels, stating, "I am in close contact with Beirut's top ten international hotel chains. So far, summer bookings are hovering between 20% and 22% at best." Ashkar explains that to cover operational expenses, hotels need an occupancy rate of 30% to 50%. As a brief reminder, the same time last year, hotel summer bookings ranged between 60% and 70%.
According to Ernst & Young's report on the performance of four and five-star hotels in the Middle East, hotel occupancy rates in Beirut dropped by 17.1 percentage points year-on-year, hitting 19.7% in January 2024. This represents the lowest rate recorded for the month of January since 2014. Moreover, there was a staggering 42.5 percentage point decrease in occupancy rates in September 2023, before the beginning of the Gaza war. However, the average room rate increased by 187.8% compared to the previous year, reaching $145 in January 2024.
Regionally, among the nine capitals covered in the report, in January 2024, Beirut recorded the lowest hotel occupancy rate. Topping the list of capital cities in the region for four and five-star hotel occupancy rates is Doha (88.2%), followed by Abu Dhabi (87.7%) and Cairo (75.5%).
Meanwhile, guesthouses are faring somewhat better, mainly due to locals heading to weekend getaways or short stays in these establishments. Ramzi Salman, President of the Guesthouse Owners Syndicate, further clarifies, "People are on their toes due to the regional situation and developments in southern Lebanon." He stresses this sector's heavy reliance on the diaspora and predicts, "We will probably have a half-season, meaning it won’t be as good as summer 2023, but it won’t be disastrous either. Expatriates will come, but their number will be half that of last year’s."
Fully booked planes
Flights bound for Lebanon are almost fully booked. Jean Abboud, President of the Travel Agencies Owners Syndicate, informed This is Beirut that reservations are already at 85% to 90%. These numbers are expected to increase as summer draws nearer. Abboud believes that if a "permanent ceasefire is declared in Gaza, summer 2024 will be twice as good as last year’s.”
However, he notes that the majority of travelers are Lebanese or from Arab countries, especially Iraq, Egypt and Jordan. "Ever since October 7, European tourists haven’t been coming at all.”
Furthermore, caretaker Tourism Minister Walid Nassar announced that the summer 2024 campaign will kick off today, Friday, from the village of Douma, "one of the most beautiful villages in the world," promising it to be " greater than last year's."
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