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Pierre Ashkar,  Head of the Hotel Owners Association in Lebanon,
Reveals that Forty-two New Hotels Worth $2.4 billion are in Pipeline -
Successful Implementation Dependent on Security Issues

By Dana Halawi, The Daily Star, Beirut, LebanonMcClatchy-Tribune Regional News

Nov. 12, 2010--BEIRUT -- Head of the hotel owners association Pierre Ashkar disclosed Thursday that 42 new hotels valued at $2.4 billion have received permits but warned that any security setback would cancel or postpone their construction.

"These new investments will offer the Lebanese hotel industry 5,000 additional rooms that will be mainly constructed in Greater Beirut, but the operation of these new facilities depends mainly on the security situation in the country," Ashkar told The Daily Star in an exclusive interview.

Ashkar emphasized the need for security as a main driver for the prosperity of the hotel industry in Lebanon.

"A lot of potential investors bought lands to execute major projects in this sector during the year 2005, but the security problems that took place that year and in 2006 put an end to these investments," he said.

Lebanon's hotel industry incurred heavy losses following the assassination of former Prime Minister Rafik Hariri and the Israeli war against Lebanon in 2006.

According to statistics issued by the Tourism Ministry, losses in the tourism sector amounted to $2.2 billion in 2006.

Ashkar expressed fear that any security deterioration this year or next would deliver another blow to tourism in general and the hotel industry in particular.

"This will take back hotels' occupancy rates to the humble records registered in the years 2007 and 2008," he said.

The occupancy rate in Beirut hotels was 35 percent in 2007, down from 50 percent in 2006, said the benchmark annual survey of the Middle East hotel sector by Ernst & Young.

The occupancy rate in Beirut was the lowest among 19 markets in the region in 2007, as it was in the previous year, and Beirut posted the steepest annual drop in the region, the report said.

Ashkar said that the occupancy rates recorded during this year's summer were better than the rates reached during previous years but did not reach desired figures.

"The occupancy rate in Beirut ranged between 80 percent and 100 percent, while occupancy in other areas recorded between 70 percent and 80 percent," he said.

"We did not reach our desired goal because of the UNIFIL accident that took place in the south at the beginning of the summer 2010."

While political stability has generally been improving over the last few years, the attacks against UNIFIL by southern residents at the beginning of July and the deadly clashes between the Lebanese and Israeli armies at the beginning of August have certainly discouraged more fearful tourists from venturing to Lebanon.

The head of the hotels syndicate said that city occupancy today is 70 percent only, as a result of the slow demand on rooms in Beirut.

"Demand for rooms in Beirut used to reach 150 percent during the years of stability with the additional number of tourists going outside the city for accommodation," he said.

Ashkar said that hotels in Brummana, Bhamdoun, Jounieh and other areas outside Beirut were fully booked during November 2009. "Today, we do not have many reservations in areas outside Beirut," he said adding that the city used to be overbooked but it is not the case this year.

"How can we be overbooked if all they talk about in newspapers is the possibility of the eruption of a new war in the country?" he asked.

According to Bank Audi's Lebanon Weekly Monitor, hotel occupancy declined by a yearly 3 percent to reach 68 percent in the first nine months of 2010, mainly due to lower occupancy levels in the months of August and September 2010, at 43 percent and 53 percent respectively, compared to occupancy levels of 75 percent and 62 percent in August and September 2009.

Moreover, Ashkar criticized the Tourism Ministry for not being able to achieve satisfactory results in this sector.

"When the new minister came to office we asked him to reactivate the national council of tourism but until now he was unable to achieve this," he said. "I think that he was not able to re-launch the council because of political interventions."

The National Tourism Council is a private organization that used to promote tourism in Lebanon.

"We asked for the activation of this council because it is more professional to be working with the private sector," added Ashkar.

He noted that the minister also increased airport tax by LL5,000 in order to generate $15 million a year to fund worldwide promotion of tourism in Lebanon. "This was a very good step but the problem is that the ministry does not really have a good marketing team to do a proper job," he argued.


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Copyright (c) 2010, The Daily Star, Beirut, Lebanon

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