LEBANON: TOURISM IS BUSTLING IN BEIRUT, BUT ONLY

UNCLAS SECTION 01 OF 02 BEIRUT 000837

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TAGS: ECON EFIN EIND ENRG PGOV LE
SUBJECT: LEBANON: TOURISM IS BUSTLING IN BEIRUT, BUT ONLY
BEIRUT

REF: BEIRUT 00808

SUMMARY
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1. (U) Beirut's record-setting summer tourism has bolstered
business and crowded the capital city, but the benefits have
not extended far past the city limits. Lebanese expatriates
frequent dining establishments in some peripheral cities, but
the historical GOL focus on infrastructure development in
Beirut, at the expense of development in other districts, has
limited tourism's expansion as well. The Ministry of Tourism
(MOT) has played an insignificant role in the current boom
and contacts note that lack of MOT foresight and GOL support
of the industry is crippling its potential. Given Lebanon's
huge expatriate base, small steps to improve the sector would
yield major impact. End summary.

TOURISM BOOMING
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2. (SBU) Tourism is booming in Lebanon, with the Ministry of
Tourism (MOT) estimating two million tourists will visit
Lebanon by the end of the year. (Note: Tourism in 2008
reached 1.4 million. End note.) MOT Director General Nada
Sardouk said 760,000 travelers had already entered Lebanon by
end-June 2009. Although it has received much attention in
the summer months, Lebanon's current tourism boom started
after May 2008, when participants at the Doha Conference
appointed President Michel Sleiman and relative security
ensued in the country.


3. (U) Feature stories on Lebanon in the world press,
including USA Today, the Wall Street Journal, the Guardian,
in addition to the New York Times' citation of Beirut as a
top destination for 2009 have raised the city's image as a
tourist hotspot. Lebanon's Jeita Grotto was named as a
finalist for a Swiss ranking of seven new natural wonders of
the world, drawing more international attention. New
companies in Beirut catering to tourists are thriving; local
press has highlighted the popularity of walking tours and
events are held nightly throughout the city.

RESTAURANTS
THRIVE REGARDLESS
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4. (SBU) As discussed reftel, security is the most important
indicator for the performance of tourism in Lebanon. The
country's restaurant sector, however, adapted during the
several political and security upheavals of recent years and
has thrived since mid-2005. With no available official
figures, the head of the syndicate of restaurants, cafes and
nightclubs, Paul Ariss estimates that about 400 new
restaurants/cafes opened in Lebanon since 2006, raising the
total number of establishments to 5000 (2000 of which are
seasonal),and employing up to 50,000 people. Following the
assassination of Prime Minister Rafiq Hariri in February
2005, activity in downtown Beirut and its immediate
surroundings came to a halt, but restaurants expanded to
different areas in Greater Beirut, in Lebanon, and abroad;
approximately 40 Lebanese establishments sold more than 200
franchises across the Middle East.

HOTEL BUSINESS
CENTERED IN BEIRUT
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5. (SBU) Despite this summer's boom in tourism, a closer look
into the industry reveals several flaws that currently limit
its potential. The focus of infrastructure development since
the 1990's on downtown Beirut has led to the establishment of
restaurants, hotels, and shopping centers in main districts,
thus catering to the demands of tourists, but it has
negatively affected the hotel industry in the Greater Beirut
area and throughout the rest of the country. Only when
Beirut hotels are full do tourists start looking for hotels
outside Beirut, head of the syndicate of hotel owners Pierre

BEIRUT 00000837 002 OF 002


Achkar told us. Those attending the many summer music and
art festivals in Lebanon, including in Baalbeck and
Beiteddine, patronize restaurants and cafes along the way,
but rarely stay in hotels overnight.

GOL TAKING TOURISM
FOR GRANTED
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6. (SBU) Since the tourism sector has managed to recover
quickly and without government assistance as Lebanon has
surmounted crisis after crisis, contacts say there is no
political will from the GOL to take extra measures to support
the sector. Tourism is taken for granted, with the sector
perceived as a "cow to be milked," Ariss said. The GOL
indirectly provides some subsidized loans to the tourism
sector, but other benefits, such as the reduced rate on
electricity enjoyed by industrial operations, do not apply.


7. (SBU) The MOT has promoted Lebanon as a tourist
destination through participation in international tourism
fairs in Europe and the Middle East but has made little
effort to seek other promotional avenues. Contacts note that
the MOT lacks a vision and strategy for the development of
the sector, as well as a qualified staff and an adequate
budget to do its job. According to DG Sardouk, the MOT
continues to work closely with the private sector and is
focusing increasingly on rural and agro-tourism, but much
work remains to be done.

SMALL STEPS,
LARGE IMPACT
--------------


8. (SBU) Given Lebanon's huge expatriate base, small steps,
such as MOT coordination with embassies abroad to encourage
visits home, could have a major impact. Achkar noted that
the simple creation of a unified country logo would
facilitate tourism promotion. Draft laws and amendments for
the modernization of the sector have been waiting in
parliament for years, and parliament has no committee
exclusively for tourism to review them.


9. (SBU) With many qualified staff having left for the Gulf,
the sector lacks the necessary resources to train new
recruits and improve the quality of service, without
government help. Revival of the National Council for
Tourism, which played a crucial role for tourism promotion
through its offices in Europe and the Middle East until its
mandate expired in the 1990's, would also help develop the
sector.

COMMENT
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10. (SBU) Lebanon's economy has always been service-based,
with the tourism sector one of its most important
contributors and the private sector its most important
driver. However, the MOT remains a small ministry, with an
inadequate budget relative to the importance of the sector to
the economy. Basic infrastructure, such as roads,
electricity, and water, that are vital for the development of
tourism outside of Beirut are in desperate need of attention.
The incoming tourism minister must harness political will to
increase awareness of the importance of tourism for the
Lebanese economy -- and thus for security and political
stability in general -- or the tourism sector will remain
below its true potential.

SISON