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Hotel business tumbles 90 percent over last three months.

Summary: Lebanon's hotels and hospitality sector has incurred heavy losses since the outbreak of a popular uprising on Oct. 17.

BEIRUT: Lebanon's hotels and hospitality sector has incurred heavy losses since the outbreak of a popular uprising on Oct. 17. The sharp drop in the number of tourists and visitors over the past three months has prompted most hotels in the country to close 90 percent of their rooms and pay half salaries to their staff.

"It is one of the worst situations we have passed through in many years. Room occupancy has dropped by at least 90 percent in most hotels in Beirut and other parts of Lebanon," Pierre Ashkar, the president of the Association of Hotel Owners, told The Daily Star.

The reasons behind the poor performance of the hotels include political paralysis and failure to form a new Cabinet, as well as the anti-government protests that exacerbated an already brewing economic crisis that is now crippling banks and businesses.

Ashkar said that most hotels have decided to operate 10 percent of their available rooms and paid 50 percent of the salaries of their staff.

"Of course it is difficult to cope with this situation. Many hotels have opened 10 percent of their available rooms and cut the salaries of the staff by 50 percent. We have asked our staff to spend less hours in work because we kept most of our rooms closed," he added.

Ashkar believes the situation may be worse outside the capital. "If business in the hotel sector [in Beirut] has dropped by 90 percent then I am sure that hotels in other regions have fallen by 99 percent," he said.

The latest data from the Ministry of Tourism revealed the number of tourists in October 2019 was 142,624 travelers, down by 14.2 percent compared to October 2018.

Nonetheless, the cumulative number of tourists rose by 5 percent year-on-year to 1.75 million tourists in the first 10 months of the 2019.

However, in October 2019 compared to the same month last year, the number of tourists from Europe and the Arab countries fell by 11.1 percent and 21.5 respectively to 55,433 and 40,325 travelers. The 2019 October figures for tourists from the Americas fell by 3.5 percent to 20,934 compared to October 2018.

Ashkar stressed that most hotels prefer to scale down their operations and cut their expenses rather than declare bankruptcy, saying: "If we close our hotels permanently then it would be difficult if not impossible to open a new hotel again. Opening a new hotel is much more expensive than incurring losses." "We prefer to stay in business until the situation improves," he added. Ashkar said that many hotels have stopped some of the free services they used to provide for their customers, such as a taxi transfer for from the airport to the hotel.

He also said that many hotels have delayed for the time being repaying loans to commercial banks.

"The banks are not asking us now to pay the loans nor are we able to meet these installments," he said.

"We prefer to cut our expenses as much as possible," the president of the Association of Hotel Owners reiterated.

Ashkar emphasized that the only way out of this crisis is formation of a new cabinet that gains the confidence of the people in the street, the majority of the lawmakers and the international community.

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Author:Osama Habib
Publication:The Daily Star (Beirut, Lebanon)
Geographic Code:7LEBA
Date:Dec 19, 2019
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