Beirut's hotel sector has been hard-hit by neighboring Syria's uprising and Ramadan, hoteliers said.
Syrian unrest cuts tourism to Beirut
The number of Middle Eastern visitors to Beirut dropped significantly this summer as unrest in Syria prompted tourists from the region to instead choose European destinations, hoteliers said.
"The season was over before it began," said Haitham Yezbek, the general manager at Etoile Suites in the Solidere district in Beirut. "We've seen a significant drop in demand for suites from last year, and the lack of tourists haven't just affected the hotels, but the entire economy," Mr Yezbek said.
Late July to the end of August is normally the peak season for Lebanon. But this year, business was harmed by the situation in Syria and the timing of Ramadan.
"The region generally does have an impact on our business because most of our business is delivered from countries in the region," says Mark Timbrell, the general manager of the Gefinor Rotana hotel in Beirut.
"People were unsure about travel because things [are] happening fast all around and nobody knew when the next country was going to have a problem."
Ramadan falling in the middle of the tourist season - from August 1 to 29 this year - did not help. It's a time when Muslims normally forgo travel, preferring to observe the strict requirements of the fast month near to home.
The shorter tenure of the summer holiday forced tourists to decide on one destination this summer. The country saw a handful of tourists visiting during Eid Al Fitr, Mr Yezbek said.
"I asked my guests, who are mostly from the Gulf, why there weren't as many visitors as before. They said they usually spend half their holiday between Europe and Lebanon, but with a shortened summer holiday this year, they had to choose one as there's not enough time," he said.
Beirut in the first half of last year was enjoying a resurgence in tourism amid greater stability in the country. A luxury Four Seasons hotel opened at the beginning of last year and room rates and occupancy levels in the city soared from depressed levels.
By contrast, occupancy levels in the first seven months of this year fell to 55 per cent compared with 74 per cent during the same period last year, figures from Ernst & Young show. Average room rates during that period are down 15.8 per cent to US$219 (Dh805) compared with $260 a year earlier.
"Lebanon has always been very difficult to handle," says Christophe Landais, the managing director of Accor, Middle East, which manages the Hotel Sofitel Beirut Le Gabriel in Beirut. "It's cold and hot water all the time."
The country's tourism industry has been affected by political turmoil in the past, including the assassination of the former Lebanese prime minister Rafiq Hariri in 2005 and the Israel-Hezbollah war in 2006. The IMF has forecast a dip in GDP growth for this year - expansion is expected to fall to 2.5 per cent from an average annual 8 per cent over the past four years, due largely to political uncertainty.
"Now we have I guess the ripple effect of Syria and Egypt," says Mr Landais.
Lebanon is also facing increasing competition from other destination, analysts say.
"Europe and Turkey are also competing with Lebanon aggressively as a tourist destination," says Yousef Wahbah, the head of transaction real estate in the Middle East and North Africa at Ernst & Young. "The fall in prices in the EU has made it increasingly attractive for tourists."
Mr Timbrell, however, says there are definite signs of improvement for the remainder of year.