LEBANON – As Israeli strikes on Lebanon enter their second month, the national economy is facing a severe shock, particularly in the tourism sector, which remains one of the key pillars of the economy.
Holidays and the summer season typically provide an opportunity to attract tourists and expatriates. However, recent events have dramatically shifted the balance, leading to a sharp decline in tourist activity and highlighting the broader impact of the crisis on the economy and employment.
Workers in the tourism sector are experiencing a severe drop in activity, with travel agency bookings declining by up to 80% since the outbreak of the conflict. Air travel has also been heavily affected, with thousands of flights canceled and airspace restrictions imposed in several countries due to regional tensions, effectively placing Lebanon outside the global tourism map.
Severe Losses for Hotels and Restaurants
Pierre Achkar, President of the Union of Tourism Syndicates and the Hotel Syndicate, revealed the severe losses faced by the Lebanese tourism sector amid the current economic and security conditions. In a special interview with Enmaeya, Achkar explained that most areas are currently operating at just 5–10% of normal activity.
Moreover, hotels in some safer areas are functioning at 90–95% below their usual capacity, resulting in massive losses estimated at hundreds of millions of dollars.
He noted that most hotels in South Lebanon have closed, while some establishments have collapsed, with no precise data available on the total number. Achkar emphasized that a minimum of around 40% activity is required for hotels to achieve profitability, meaning that the majority are currently operating at a significant loss.
"Restaurants have been less affected as Lebanese customers continue to dine out and rely on delivery services. However, they still face significant challenges due to rising prices. Despite this, they remain in a comparatively better position than hotels," he explained.
Rising Costs Exacerbate the Crisis
Achkar highlighted that the largest burdens come from electricity and water bills, with the cost of a kilowatt in Lebanon reaching 30 cents, triple what it was before. This surge places a heavy strain on hotel owners, forcing some to consider closing their establishments.
He also pointed to rising fuel, vegetable, and food prices, as well as transportation and local production challenges due to security conditions. These factors have increased the cost of goods, including imported items from Europe, with shipping and insurance expenses further compounding the crisis.
Urgent Measures Needed to Reduce Losses
Regarding immediate measures to mitigate losses, Achkar stressed the need for state support through reductions in electricity and water bills and the value-added tax (VAT) for at least three months, with deferred payment to reassess the situation. He emphasized that these funds would be better spent on paying employees’ salaries under the current difficult circumstances.
“The state faces additional burdens due to waves of displacement and soaring oil and gas prices, and it continues to grapple with financial crises and economic disorder. Therefore, we demand bill deferrals to support the resilience of the sector and preserve jobs,” Achkar said.
Amid these challenges, Lebanon’s tourism sector stands at a crossroads between survival and collapse, with its future dependent on the rapid restoration of security and immediate government support to sustain establishments and jobs, allowing the sector to regain its vital role as a key engine of the national economy.
