Regional crisis cripples tourism
Lebanon experienced two unique years in terms of number of arrivals in 2009 and 2010. It seemed the country was back to its heyday, with more than two million visitors in 2010 and global media praising the outstanding offerings of this tourism destination. Then, Syria, Lebanon’s neighbour, with very strong ties to its internal politics, fell into a civil war, which affected Lebanon’s own security, and left tourists fearful. Arrivals fell dramatically in 2011 and 2012, with slightly better prospects for 2013 though, although the looming threat of conflict may cause renewed uncertainty prospects for 2013.
The most notable outcome of the Syrian war is a political boycott of travel to Lebanon by GCC countries. Disapproving of Lebanon’s position towards the Syrian crisis, the UAE, Saudi Arabia, Qatar, Oman and Kuwait all introduced travel warnings preventing their residents from travelling to Lebanon. These are the highest spenders in Lebanon’s tourism, with many businesses relying on these tourists for profits and survival throughout the year. The result has been dramatic for many city centre restaurants, hotels and other hospitality operators. The Ministry of Tourism launched campaigns early in 2013 aiming to attract Arabs back to Lebanon, but the result was not satisfactory, especially as the warnings remained in place.
New emphasis on budget thanks to GCC boycott
Given the decline of Arab travellers to Lebanon, travel operators, and notably travel accommodation outlets, are attempting to attract the lower-budget Western and European markets. However, tourists from these areas are not prepared to pay the same prices as their GCC counterparts. As a result, prices were heavily discounted to cater to a different type of tourist, as well as to domestic consumers. Small boutique hotels, guesthouses and similar facilities with a small number of rooms and affordable prices seem to have survived well, and offer opportunities to maintain a healthy growth rate. Their success is based on online marketing and minimal costs and they have been able to fill their rooms. This may all signal it is time for Lebanon to think budget, and how to survive without the big GCC dollars.
MEA fights to stay profitable
Middle East Airlines (MEA) is another causality of the crisis in Syria and declining tourist arrivals. The airline struggled for profits as it experienced a decline in traffic. In response, MEA ordered more aircraft, with the ambition to cater to new destinations in the hope of generating more traffic from new source geographies. According to the airline, it may even consider a low-cost carrier approach. With the increasing failures seen across the region in air travel, however, this may not be the best way forward. MEA has to deal with considerable competition from regional giants, such as Emirates Airlines and Qatar Airways, and needs to diversify in order to better compete with these companies.
Outbound helps travel retailers survive
While travel retail witnessed a decline in demand for inbound packages in 2011 and 2012, tourism flows outbound remained a good business driver as Lebanese tourists continued to travel abroad, and to an increasingly diverse number of destinations. Although tourism flows outbound declined in 2012 because of the difficult economic conditions, the number of trips was still significant, and existing players were able to introduce innovative products and services to maintain their profit margins, unlike, for example, car rental companies, which depend strongly on arrivals.
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