What’s Happening With Beirut’s Hotels and Cafes?

Myriam Sweidan
Lebanese Journalist
September 8, 2020
The tourism sector is a vivid example of the country's economic decline, with enterprises partially or totally closing down, reducing employees’ salaries, or laying them off completely, particularly by forcing them to offer their resignations.

“After more than 30 years of continuous work at the hotel, I was forced to resign… I didn’t even get any compensation. This place that consumed all my energy, in which I was present under all circumstances, is throwing me out today…” says Essam (57 years old), a manager at one of Beirut’s grand hotels.

Essam, who lives today without any income for him and his family, is one of the thousands of employees who were forcibly laid off after several blows hit the tourism sector, not to mention the explosion at the port that destroyed many hotels, restaurants, and tourism institutions. Many employees were forced to take their annual leave, or in many cases even unpaid leave.

Indeed, no economic sector in Lebanon was immune to the crisis that has been going on for months, which has escalated with the decline of the Lebanese pound against the dollar, and with the recent explosion of the Beirut port. The tourism sector, which includes hotels, restaurants, and nightclubs, particularly in central Beirut, received the hardest blow. Those institutions have been especially affected, as they had been taking their last breaths since the Lebanese uprising and the “Coronavirus” epidemic, and have now arrived at a point where they’re almost absent.

The tourism sector is a vivid example of the country’s economic decline, with enterprises partially or totally closing down, reducing employees’ salaries, or laying them off, some by forcing them to resign, like what happened with Essam.

Successive Blows, Topped by the Explosion

“My fiancé and I did all we could to build our restaurant six years ago, and today our dream fell apart …” Pamela Shamali (33 years old), a partner in the “Mashawish” restaurant with her fiancé George Oun (34 years old), which was completely destroyed on Mar Mikhael Street, tells Daraj.

Pamela explains that the restaurant requires $20,000 to be repaired, and this is with no financial or even emotional support from the state or any official institution. So she and her fiancé decided to launch an online campaign to raise donations to restore their restaurant, as it was one of the most frequented destinations in Mar Mikhael. However, donations were limited to a few friends of the restaurant from abroad, and there are no signs the restaurant will be opening soon, despite the fact that it is their only source of income.

Mashaweesh was one of the enterprises that were already struggling to survive, until the explosion took place and knocked it to the ground. The most serious of their problems lies in the Lebanese nosediving economy, represented by the lack of liquidity in the banks, the decline in the purchasing power of the citizens who suffer from the instability of the exchange rate, and unemployment, in addition to the procrastination and deductions in the payment of salaries. This is apart from the fact that tourism enterprises have to buy basic materials at an exchange rate of around 7,000 lira for the dollar, while the pricing of services and final goods remains at 1,500 lira, the official exchange rate, or slightly more.

The restaurant before the explosion.

The tourism sector used to contribute to about 25 percent of the Lebanese GDP, yet its returns have decreased dramatically in the past years, specifically at the beginning of this year, in conjunction with the spread of the Coronavirus. This is especially since 40 percent of restaurants did not reopen after the quarantine period came to an end, or in some cases the owners deliberately cut employees’ salaries by up to 50 percent, according to Pierre Ashkar, the president of the Syndicate of hotel owners in Lebanon, who had prompted the tourism sectors to cry out to the state to support them and grant them tax exemptions, but this was unfortunately to no avail.

100,000 Workers Lost Their Jobs …

“I put all my energy into it, I acted like it was my home… suddenly the roof of that home shook and fell on our heads… now I am waiting for the unknown,” Rola (26 years old), an employee at a hotel that was destroyed in downtown Beirut tells Daraj.

Rola was in the hotel when the explosion occurred, and she escaped death by a miracle, according to her. She even volunteered later to clean the hotel, but stated that the reconstruction process may take a long time, and there are no signs of work looming on the horizon.

Rola is one of the 100,000 workers who lost their jobs following the explosion, out of 150,000 workers in the tourism sector, according to Tony Ramy, the president of the Syndicate of Restaurant and Café Owners in Lebanon.

In this context, Pierre Ashkar confirms, about a month after the Beirut explosion, that some of the hoteliers, led by the “Phoenicia” Hotel and “Le Gray”, have begun restoring what the explosion destroyed, but that the reconstruction process will take at least six months. This is mainly due to the shortage or even the absence of building materials and other materials from the Lebanese market, in addition to the difficulty of importing them from abroad, due to the collapse of the value of the lira against the dollar to about 80 percent.

“The tourism sector has lost 2,060 restaurants, 163 hotels, 250 rental cars, and 40 furnished apartments, based on a preliminary survey, in the Greater Beirut area,” he told Daraj. “This would require from 800 million to 1.2 billion dollars for reconstruction or restoration.”

On the other hand, there are tourism institutions that would not be repaired due to the refusal of insurance companies to pay them, until investigations show the nature of the explosion, and they will not pay for repairs and restoration unless the government report shows that the explosion was the result of an “accident” and not the result of a terrorist act. As for those who do not have insurance, they are in the process of filing a lawsuit against the state, and specifically against the port administration, with the help of 100 attorneys, accusing them of negligence and indifference.

“This would require from 800 million to 1.2 billion dollars for reconstruction or restoration.”

Ashkar pointed out that “The losses of the tourism sector from early 2012 to 2014 specifically, that is, after the Syrian revolution that led to destabilization and political division, resulting in campaigns of accusations of treason against the Gulf states. Consequently, this prompted those countries to prevent their citizens from visiting Lebanon.

“Tourists of the Gulf countries are the backbone of Lebanon. After losing them, the tourism sector lost the main source of foreign currencies. This category of tourists is the one who spends the most and has the longest stay in Lebanon. Let alone that they are the only investors in the country, as the Gulf citizens own a large share of the Greater Beirut Apartments, for example,” Ashkar said.

Lebanon, especially Beirut, witnessed several wars and crises, but the tourism sector has not received a blow like the one caused by the explosion, and perhaps overcoming that crisis will take months, or maybe years.

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