Lebanon is in a deep economic crisis that is threatening its stability, yet scenes at restaurants, beach resorts, clubs, and guesthouses do not reflect this reality.
Several cafes, eateries, and pubs in many areas across the country are crowded and full of life. Both locals and expats are having a hard time finding places at their favorite venues.
“We are booked up almost every day, and the reservation phone line is ringing at all times,” Ali Haidar, manager of a high-end restaurant in the coastal city of Byblos, told Al Arabiya English. “We didn’t expect to see this high number of diners; we were even surprised,” Haidar, who has been in hospitality for 20 years, said, adding that most of his customers were either Lebanese expats or foreigners from Egypt and Iraq.
Lebanon is dealing with a nearly two-year-old economic crisis that has capsized living conditions. Last week the Lebanese pound reached a new low against the dollar. The World Bank called the country’s financial meltdown earlier this month as one of the world’s worst three depressions since the mid-19th century.
Many depositors have their life savings stuck in banks, and to add to the woes, for the past few weeks citizens have been lining up in front of gas stations to fill up their tanks due to fuel shortage. Electricity cuts - albeit common in Lebanon since the end of the 1975-1990 civil war - now last for much of the day, and private generators are turned off for several hours to ration fuel.
Recent figures by Information International, a Beirut-based research and consultancy firm, show that the poverty rate among the Lebanese is estimated at 55 percent, while a limited 5 percent are wealthy.
More than 95 percent of workers in Lebanon earn their salaries in the Lebanese pound, which has lost more than 90 percent of its value since October 2019, while others get paid in US dollars. This latter group have higher purchasing power.
Similarly, Information International revealed that around 200,000 households receive remittances from their families and relatives of about $200 to $2,000 a month.
Purchasing power helps many in the country during these difficult times, but the occupancy in the tourism sector is buoyant and pursuit of leisure activities strong.
Commenting on this, Pierre Ashkar, head of the Lebanese Hotel Association, explained to Al Arabiya English that due to the dollar crisis, the Lebanese people are now resorting to domestic tourism.
“Middle-class residents who used to spend their vacations in Turkey, Cyprus, and Greece no longer have the financial means to do the same. They, instead, go to Lebanon’s mountainous and coastal areas to escape from the dreary routine of everyday life, which is partly causing this touristic traffic,” Ashkar noted.
He added: “High occupancy rates in hotels and guesthouses are also the result of Lebanese expats from the Gulf and Africa coming to visit their families during summer. These expats bring fresh dollars with them, and therefore, can afford to stay in ‘expensive’ rooms.”
Ashkar also mentioned that the eased coronavirus restrictions and low COVID-19 daily cases contributed to the revitalization of the hospitality industry.
Stephanie Youssef, a 28-year-old Cyprus-based journalist, told Al Arabiya English that after arriving in Lebanon it took her a while to find accommodation close to the beach, in which she could stay with friends for a couple of days.
“Almost all chalets in the southern city of Tyre were reserved despite the high rental prices. I had to book the apartment around three weeks prior to my trip,” she said.
A boon to the economy?
Though the picture may seem prosperous in different parts of Lebanon, this is nothing but a short-term positive development, from which a few businesses can benefit but not the whole country, according to Mike Azar, a senior financial analyst.
“Even if fresh dollars are being fed into the market, these will not make any difference in the long term because they are not going into the banking system, and so will not be utilized to stimulate economic activities,” Azar explained. “The Lebanese people lost trust in the financial system, and for this reason, they trade their funds at money exchange houses away from the commercial banks.”
He added: “There will be no real economic growth until the roots of the problem are tackled, including among others the insolvency of the central bank and commercial banks. Otherwise, we will continue to witness a high demand for dollars and a further devaluation of the lira.”
For its part, Information International concluded that while some Lebanese live a luxurious life, the majority of residents live in destitution. This is greatly observed in the eastern and western suburbs of Beirut, as well as in Tripoli, Hermel, Akkar, and many areas in Mount Lebanon.