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Some hotels in Beirut are operating near full capacity as guests have been unable to find flights out of the country during Israel's air strikes on Lebanon, while increased booking demand from journalists, non-governmental organisations (NGOs) and diplomats has filled additional rooms.
Hoteliers are also accommodating families of their employees and people who have fled their homes during Israel's intense air strikes over the past two weeks that have killed more than a thousand people and displaced about one million in Lebanon.
Abu Dhabi hotel operator Rotana has two properties, the Gefinor Rotana and the Raouché Arjaan, in Beirut with just under 400 rooms.
“Last week, the Gefinor was running almost full because a lot of people couldn't get out. The flights were booked. Business has been tough in Beirut for quite some time now. But there's this minor crunch right now of people trying to leave and not being able to fly out and that's creating compression in some of the hotels,” Rotana's chief executive Philip Barnes told The National on the sidelines of FHS World event in Dubai.
“The major thing right now for people in Lebanon is getting out, if they can. How long will this go on for? For the hotel industry as a whole, business will disappear to a very, very large extent in Beirut, specifically.”
The two properties during the summer recorded an occupancy rate of about “mid-50s to 60 per cent”, and are now 100 per cent full, said Eddy Tannous, Rotana's chief operating officer.
“In times of crisis, we see demand from journalists, from NGOs … and some families that have the means went early on and booked rooms in hotels, so it's a mixed bag,” Mr Tannous told The National.
He is in constant contact with the general managers of the Beirut properties to monitor the situation.
“It's a tough situation, but what brings to life the spirit of Lebanon in reality is how the teams have been dealing with this,” Mr Tannous said.
“Today our hotels are full and I'd say half of the inventory is on a complementary basis housing people that need a place to stay, starting with the families of our own colleagues who are living in areas that are critical right now.”
The general managers have taken this “two-pronged” approach to the crisis to help pay hotel workers' wages on one hand and to assist people displaced by the fighting between Israel and Hezbollah.
“These hotels have been struggling, they're being very creative on how to pay salaries. We're talking to one of the general managers … he's saying 'I want to get some business into the hotels because this will help me pay the salaries but also I want to leave some inventory for families of our own colleagues and other families that will need [shelter].”
The management has been supportive of the arrangement because “it is not the time to nickel and dime” during a crisis, Mr Tannous said, adding that the crisis is “monumental”.
'Remain open and be of help'
Hoteliers have vowed to keep their Beirut properties open for business, despite the increasingly tough situation on the ground.
Europe's biggest hotel group, Accor, has two properties employing nearly 600 in Lebanon, that are currently operating at an occupancy rate of less than 20 per cent, Accor's chief executive, Sebastien Bazin, told The National.
“At a time of conflict, the impact in terms of occupancy and RevPar [revenue per available room] is totally irrelevant. In the case of conflict, it is first about safety, family, health and security. Whether we make or lose money, it does not matter,” Mr Bazin said.
The properties continue to witness demand from journalists, NGOs and diplomats. “This is why we always remain open, because if you want to cover the world and a destination, you need witnesses. And the witnesses are media, diplomats and politicians coming to help and rescue. This is why we remain open,” he said.
“At a time of conflict, everything is upside down. So we're no longer talking about occupancy or fares. We're looking at whether we can welcome people in need and try to be an actor, not a spectator. At the end, I'm not a politician … what I do is really looking after the people.”
The executive, who has been with Accor for 10 years, said the industry is accustomed to operating in times of “muddy waters” and uncertain conditions.
“The only thing we're consistent with is never leave a country in case of conflict, always stay, remain open and be a help, as opposed to actually exiting … this is when they need us the most,” Mr Bazin said.
Tourism hit hard
Tourism is one of Lebanon's major growth drivers, with the country increasingly dependent on foreign visitors for hard currency. Direct tourism receipts totalled $5.4 billion last year, equivalent to about 25 per cent of the country's gross domestic product.
However, the intensified fighting between Israel and Hezbollah is having a significant impact on the sector, industry chiefs and analysts said. The cross-border clashes have already caused foreign and expatriate arrivals to fall by 310,015 in the first eight months of this year compared to the same period last year.
“We now believe that the recent escalation will not only significantly impact the numbers of arrivals over the next quarter, especially the December holiday season, it will also trigger another wave of outflows of residents who seek safety abroad,” a report by BMI, a unit of Fitch Solutions, published on September 25, noted.
“We would not be surprised if the number of arrivals drops to around 50,000 per month in Q4 2024.”
Escalation in fighting will also adversely impact the transport and aviation sector, as more than a dozen international airlines have suspended their flights to Lebanon since September 22. This has led to a reduction of 40 per cent to 50 per cent in the number of flights, according to the director of civil aviation at Beirut International Airport.
“While we do not expect a closure of Beirut airport – Israel will want to allow the exit of the citizens of its allies, such as the US, Canada and UK – airport activity could be disrupted if the fighting escalated,” the report said.
Flights affected
European Union Aviation Safety Agency (EASA) on September 28 said airlines should avoid operating within Lebanon's and Israel's airspace.
“An overall intensification of air strikes and degradation in the security situation has been noted, impacting the safety of airspace over Israel and Lebanon,” the safety regulator said.
The conflict could force airlines to change flight paths and navigate airspace closures, according to the chief of Dubai Airports.
“The aero-political, social and governmental situation throughout the region is of concern. It may mean some flight routing changes, but overall we haven't seen a huge impact on traffic thus far,” Paul Griffiths told reporters on the sidelines of FHS World.
Many international airlines have suspended flights to and from Beirut as Israel begins its ground invasion against Hezbollah in southern Lebanon.
Etihad Airways's flights to Beirut will remain suspended until October 8, flydubai flights to the Lebanese capital will remain cancelled until October 7, while Emirates said its suspension will remain until October 8.
Lufthansa Group, which includes Lufthansa, Swiss, Austrian Airlines, Brussels Airlines and Eurowings, on Tuesday said flights to Tel Aviv will be suspended until October 31. Flights to Beirut will be suspended until November 30 and flights to Tehran for the group will remain cancelled until October 14. Lufthansa airline has already decided to suspend flights to Tehran until October 26.
Lebanon's Middle East Airlines flights from Beirut to Istanbul were sold out on Monday, according to the company's website. Lebanon's MEA is among the few still operating from Beirut's Rafic Hariri International Airport.
