Empty outdoor terrace of typical local street food restaurant bar at Dizengoff Street Image Credit: Shutterstock

At this time of year, hotels are usually pre-booked in Lebanon, ahead of the upcoming Christmas season. Not this year, however, as the shadow of war looms over the tiny Mediterranean country due to what now has become a daily routine of cross-border clashes between Israel and Hezbollah since the Gaza War began in mid-October.

The last thing Lebanon needed was another regional war, especially one into which it might be dragged, very unwillingly.

The country is already suffering from a crippling financial meltdown since 2019, topped with a Covid-19 lockdown and then, the terrible Beirut port explosion of August 2020 which tore down half the capital and resulted in more than 230 deaths.

The country has been with no president since October 2022. Its government is in caretaker mode with very limited authority to take major decisions. Until there is a new president and full-fledge government, talks with the International Monetary Fund (IMF), much needed to relieve Lebanon’s cash strapped economy, remain on hold.

Before leaving office last year, President Michel Aoun had put it bluntly, describing the path towards which Lebanon was heading as “Hell.” And hell indeed it has become.

Hell in Numbers

Tourism and banking were the two surviving magnets for Arabs and foreigners in Lebanon, once called, back in the 1960s, “Switzerland of the East.”

The banking sector collapsed in 2019, while the tourism sector — which accounted for 20% of Lebanon’s GDP — went dark in 2020. It was just starting to recover, albeit sluggishly, when the Gaza War broke out on 7 October 2023.

According to the Lebanese Ministry of Tourism, numbers were relatively good for the first half of this year; 1.4 million tourists, 863,374 of them during the summer months of June-September. That’s a 25.3% increase from 2022, and 113% increase compared to 2021.

Given the terrible state of the Lebanese economy, topped with its chronic dollar shortage, and nearly 100% devaluation of the Lebanese lira, tourism was the only sector that managed to remain standing, generating $7 billion in revenue last year.

Beirut City at Beirut Souks in Beirut, Lebanon. Image Credit: Shutterstock

The Gaza Spillover

All of that suddenly became history when the Gaza War started, and Hezbollah decided to support it Hamas by firing missiles across the border. The skirmishes continue, and there seems no decision has been made to take them further, but the damage has already been done.

The Lebanese Restaurant Syndicate says that business has dropped by a whopping 80% while the Hotel Syndicate claims that right before the Gaza War started, hotel occupancy stood at 25%.

It’s now down to anywhere between 0-7%. Most of these remaining reservations are not tourists, but expatriate Lebanese who find it more convenient to stay at a hotel in order to avoid electricity rationing at their family homes.

Cancellation stands at over 60% at Lebanese hotels, while major airlines like Swiss Air and Lufthansa have ceased flights to Rafik Al Hariri International Airport. Fearing the worse, many countries including France, Great Britain, and the US have warned their citizens either to avoid Lebanon or to leave the country immediately.

Israel too is suffering

The situation is equally bleak in Israel, only there, the economy was nowhere as bad as Lebanon before the war started. Historical sites in Jerusalem and Bethlehem, usually swarming with tourists ahead of Christmas, are also empty.

Like Lebanon, Israel suffered from a major Covid-19 which sent entire businesses into bankruptcy, and the country only reopened for tourists in January 2022. High hopes had been pinned on the next Christmas season, which also, have been scrapped by the violence.

During first ten months of this year Israel recorded 9 million tourists, nearly 6.5 times higher than Lebanon and very close to where numbers stood before the Covid-19 pandemic. When Hamas operation began on 7 October, there were 90,000 tourists in Israel and 56,000 hotel rooms.

More than half of those rooms were immediately evacuated as tourists scrambled to get out, while the rooms were used to accommodate Israeli families displaced by the violence. InterContinental Hotels temporarily shut down two of its branches, Six Scenes Shaharut and Hotel Indigo in Tel Aviv, while a top local chain, Isrotel, is on the verge of closing down.

In Israel, tourism accounts for 2.8% of GDP and 3.5% of total employment. Tour operators have called off their tours to Israel until the end of the year, while some have suspended them until end of March 2024.

Unanswered Questions

Much of that will be determined by how this war plays out. Will Hezbollah get dragged into a full-fledge confrontation with Israel, similar to the Lebanon War of 2006?

Will the Qatari-brokered ceasefire that was announced on 22 November hold? And if it doesn’t, how will Israel respond?

Will Netanyahu survive the war, or will he be forced out of office before it ends? There are no answers to any of these questions at present, putting the entire region — and its entire hospitality sector — on life-support for the upcoming weeks and months.

— Sami Moubayed is a historian and former Carnegie scholar. He is also author of the best-seller Under the Black Flag: At the frontier of the New Jihad.