A year on from the war, Lebanon's beach resorts are reopening in the hope they can recoup their losses.
Bright waters break on the white sand. A soft breeze sets palm trees swaying in a sleepy silence broken only by the cries of children at play. It is easy to forget that, less than a year ago, this strip of coastline was in the grip of total war.
Though never directly bombed, the beaches and resorts of the south coast felt the first shock of war, when Israeli planes started bombing nearby roads and bridges. "Knowing what had happened in Gaza a few weeks before, I left immediately, taking everything I could with me when I heard that Hezbollah had kidnapped two Israeli soldiers," says Georges Boustany, the owner and manager of Lazy B, a beach resort that had opened just six days before the war started on July 12. The days that followed proved him right: only 200 meters away, two bridges were soon destroyed, rendering the region inaccessible except via a five-hour mountain trip.
Hundreds of workers employed for the summer were instantly out of a job. Power was down, so two to three weeks worth of food stocks were left to rot inside refrigerators, no one daring to come and collect it. The bungalows were abandoned and outdoor furniture left where it stood. Some of the resorts were burgled; others kept security guards on duty to prevent looting.
But what the bombs couldn't do - bring the industry to a complete stop - an oil slick could. And it did after the bombing of the Jiyeh power plant, releasing an oil slick into the Mediterranean that spread up much of the northern coastline, a final blow to beaches that might otherwise have reopened in mid-October.
After the war ended, those resorts that were centered around swimming pools gamely tried to reopen: "We opened on September 1, mostly to boost our staff morale," says Gilbert Khoury, the manager of Orchid, a luxury resort that doesn't take anyone younger than 21. "And customers came, despite the three-hour-long trip and the ravaged roads." But Orchid caters to a market that expects to be well looked after.
Most of the other resorts, not as upscale as Orchid and dependent on packing in more people to earn a profit, stayed closed. "The smell was atrocious; clients couldn't bear it," says Boustany. Even those resorts lying south of the plant, which were untouched by the oil slick, gave up. "Fumes and greasy dust rained down all over the place, staining everything," says Fadi LeSidon, the manager of Laguava, a large estate planted with guava trees. "Cleaning wasn't worth the expense since roads were still impassable anyway."
Poor timing. In fact, the timing of the war, which started in mid-July and lasted for 33 days, was the real killer. "The main beach season starts on June 1 and finishes on August 31. July 12 is exactly in the middle, as if on purpose," says Boustany. Lebanese expatriates, who spend more than residents and who usually stay for a week rather than a weekend, had just started arriving when the war began.
Since then they haven't been back. "We've lost our core target," says Fadi LeSidon. "It's a shame. We had 1,600-2,000 visitors on the Sunday before the war started. Things were going so well that we were considering opening a restaurant in Beirut in order to keep our core staff active all year long."
The future had never looked better: at Orchid, the income from the day immediately preceding the outbreak of war equaled typical weekend sales. And Khoury's other beach venture, Bamboo Bay, had made more money in one month than during the entire 2005 summer.
When the dust of the war settled, it emerged that only a few of the operators had been able to protect their investment at least to some degree. "I had invested more than $100,000 in plants and grass," says Boustany. Everything would have been lost if I hadn't had two employees, neither of them Lebanese, who stayed to water them. All in all, considering that fresh paint is needed every year anyway, repairs cost me about $40,000." Khoury and his partners had to dig deep in order to find the $60,000 needed to restore Orchid and the $50,000 that Bamboo Bay's cleanup demanded.
And those resorts that had fixed events such as weddings and parties lined up had to reimburse their guests. "Reimbursements amounted to perhaps $100,000," says LeSidon. LeSidon estimates Laguava's direct losses at $500,000; Khoury believes Orchid's losses amount to $70,000 and Bamboo Bay's $600,000, including $90,000 of stolen material. And, of course, loss of profit must be taken in consideration: about $2 million for Laguava, $400,000 for Lazy B, $300,000 for Bamboo Bay and $400,000 for Orchid.
Breathing easier. Still, some managers can breathe a little more easily than others. "We were able to bear these losses thanks to the profit we had made in 2004 and 2005," says LeSidon. Not so Boustany, who had taken a state loan and invested $350,000 of his own money in his little piece of paradise.
The total absence of official support makes him furious. "Like everyone else, I presented a request to receive the compensation promised by the government, but nothing came," he says. "I wasn't even granted a loan restructuring. I only obtained a one-year payment period. I also asked Hezbollah for help, many of my employees being Shi'ites, but I was rejected again on the basis that Hezbollah doesn't help companies. So I was forced to take another bank loan, for $50,000 with the regular 10 percent interest rate in order to start over this summer. My family helped me, but I just won't be able to pay it back if things don't work out this summer."
Actually, the government does intend to help to stricken companies. "Companies won't receive financial compensation; nothing of the kind was ever promised to them," says Roger Melki, an advisor to Finance Minister Jihad Azour. "Regarding companies, we chose an investing approach rather than an insurance one, meaning that we won't compensate them for their direct losses but instead help them put their activity back on tracks through subsidized loans with light interest rates and a 60 percent write-off on the loan amount, as well as restructurings of the loans that are already running.
"But defining this procedure is time-consuming since we have to deal with many players, including the banks that are granting the loans, and have everybody agree."
Boustany knows that his situation could be even worse: owning the land spares him the heaviest cost - rent. Khoury and his partners had to find about $300,000 to cover salaries and rent to keep their project going. And if a few real estate owners show more compassion than others, agreeing on a half-price rent deal, others are taking defaulters to court. "Everyone talks about investment in Lebanon and encouraging the private sector," says Boustany. "But in these times of need, we're completely abandoned. That's an extreme loneliness."
Against the odds. Despite the scars left by the war, resort owners and operators are doing their best to make sure that everything is ready for the coming season, and against all odds, everything is. "It's unbelievable, but Jiyeh [the location of the power plant] is even cleaner than before. Even ancient, stained rocks are now shiny, and the water is as blue and clear as ever," says Boustany. That's no wishful thinking. Seawater has been officially tested and pronounced clean.
"Things are just like they were," says LeSidon, who says he doesn't like to brood. "We have to provide the same service, the same quality product, without taking time to wait and see how things evolve in Lebanon. I wasn't so sure at first but we're starting to get positive feedback. Clients have begun to reserve bungalows and plan parties. That's very encouraging, even if it's not as good as last year at the same time. I'm certain that Lebanese expatriates will come and spend the summer here, because they just don't go elsewhere for holidays; they're not the going to Greece to discover Mykonos type."
Still, the apparent optimism is tempered by a newfound cautiousness: food stocks and staff numbers are kept to the bare minimum, and former partners such as outside caterers are not renewing contracts.
There's too much money at stake for operators to quit, even if they wanted to. $3.5 million has been invested in Laguava and $1.7 million in its neighbor O Cap; just next to Bamboo Bay, La Voile Bleue cost $3.5 million and Pangéa $9 million. Youth oriented Océana swallowed $5.4 million in investment.
"We thought about closing Bamboo Bay for good," says Khoury. "But we invested $2.5 million in it and that's just too much to simply give up. We have to minimize our losses, even if we only make $400,000 this summer. Still, it's pitiful to come to the point of opening just because of a financial commitment."
This reluctance shows most in the change in expectations. Trust in the future has all but evaporated.
Projects are on hold or cancelled. Investors like Khoury now want to try abroad. "We are currently negotiating with potential Arab investors to get involved in resorts in Jordan and Dubai. Jordan's potentials are less attractive than Lebanon's but at least there's stability over there. And after the war, we realized that it was time for us to use our know-how out of Lebanon and to make sure that our venture wouldn't suddenly be out of a job like happened last year. We've lost our trust in the future and that's as painful as a financial loss. We're fed up with Russian roulette wagers."
Things could go wrong again. Maybe not between Lebanon and its neighbors but inside the country itself, especially in September when the presidential election contest will be at its most heated.
"Lebanese don't feel comfortable going south anymore," says LeSidon. "And if murders and bombings, especially against civilians, happen again, they won't come at all."
By Nathalie Bontems, Beirut
© Arabies Trends 2007
