06 October 2011

BEIRUT: Spending by Arab tourists in Lebanon declined in the first eight months of 2011 compared to the same period last year, according to a report released earlier this week.

According to Global Blue, the company that administers Value Added Tax refunds in Lebanon, Saudi Arabia spent 9 percent less in Lebanon during the first eight months of 2011 compared to the same period in 2010. Despite the 9 percent drop, Saudi tourists remained the top spenders in Lebanon.

Spending by Kuwait and Qatar was also down by 12 and 10 percent respectively in 2011 through August, in line with lower spending by tourists from Egypt and Jordan at 19 percent and 7 percent respectively.

But lower VAT refunds do not necessarily reflect a more economical group of tourists.

In fact, the number of tourists visiting Lebanon declined 25 percent year-onr-year to 1.26 million through August, with the share of Saudi guests dropping from nearly 9 percent of total tourists in 2010 to 5.6 percent in 2011, dealing a heavy blow to Saudi spending.

However, tourists from Saudi Arabia continued to outspend their peers in Lebanon, constituting 20 percent of total purchases while Kuwaitis were in third place with 9 percent.

Economists and politicians have attributed the decline in tourist revenues to the country’s often precarious security situation as well as unrest in the region in general, but particularly in neighboring Syria.

Pierre Ashkar, president of Lebanon’s Hotel Owners Union, said the decline could be mainly attributed Lebanon’s fragile stability.

“People usually book their summer vacation in advance, so the delay in forming a government [until the end of June] discouraged many people and they ended up not considering Lebanon as their tourist destination,” Ashkar said, adding that political instability resulted in the overall lack of stability.

He also said that the unrest in various Arab countries coupled with the EU financial crisis have significantly impacted Arab countries and forced many to be more economical.

“When the Arab and international stock markets were making gains, people were spending, but nowadays with the financial crises in Greece, Spain, Arab countries and the U.S., people think twice before spending,” he added.

The report also said that Saudi tourists, like their neighboring Kuwaitis and Qataris, often drive through Jordan and Syria to Lebanon by car, a daunting journey after the Syrian turmoil.

“There is a big segment of Gulf families who used to travel to Lebanon by land but with the recent unrest in Syria and their experience of the 2006 war with Israel, they have reconsidered visiting,” Ashkar said, referring the July-August war between Lebanon and the Jewish state.

Although Lebanon was stood up by guests from top Arab spending countries, total tourist spending rose 4 percent year-on-year during the first eight months of 2011, driven by a 13 percent pick up in Emirati spending and by high single-digit sales growth of Syrian and French visitors.

Fashion and clothing retained the top spot on tourists’ buying habits list, constituting 74 percent of total spending, and rising 9 percent over 2010, while watches were 14 percent less popular in 2011 and made up 10 percent of total purchases.

The first eight months of the year also saw tourists directing more funds to the country’s capital. All districts fell out of spending favor for Lebanon’s tourists except Beirut, where spending rose 6 percent and reached 84 percent of total purchases compared to massive drops in Baabda and Kessrwan –north of Beirut – of 19 percent and 13 percent respectively.

Many economists have been calling for an equal development plan that would see districts in the country, other than Beirut, take advantage of a year-round tourism season. They contend that the decentralization would automatically help other districts flourish in fields of tourism and business.

“For Lebanon to become ultimately an international destination, the country needs at least four years of continued stability and equal development for all areas,” Ashkar said.

That stability is key to the country’s tourism sector improving was echoed by Tourism Minister Fadi Abboud.

Abboud, who inaugurated the “1st Forum for Sustainable National Tourism” organized by Beyond Beirut, said according to forecasts, stability in the region would propel the tourism sector of states.

“The expectations are that political stability and security could propel growth in the tourism sector in countries in the Middle East to around an average of 4.5 percent,” Abboud said.

Beyond Beirut is a non-governmental agency that aims to encourage the development of experiential tourism beyond the city limits of Beirut as a means for sustainable economic development in rural Lebanon.

Copyright The Daily Star 2011.