Hotels in Beirut have seen a dramatic decline in performance following the renewed tensions in the Middle East. After the first attacks on Lebanon on the 12 July, hotels in the capital saw immediate declines in occupancy with rates following suit a week later.
A review of hotel performance based on Daily HotelBenchmark™ by Deloitte shows that during the first three weeks of the Lebanon crisis, Beirut hoteliers saw occupancy fall to around 33% - some 40% below the levels achieved in 2005. Rates remained fairly stable during the first week of the conflict however these subsequently fell by over 30% in the second and third weeks. The overall impact has been that revenue per available room (revPAR) has more than halved during this time, to just under US$40.
Lebanese tourism officials had originally expected tourist arrivals to increase by 20% this year to 1.6m. However, given the extent of the damage to the country’s infrastructure, the current travel advisories and the early stages of the cease-fire agreement – achieving this target seems unlikely.
Commenting on the results, Lorna Clarke, Executive Director of HotelBenchmark™, said: ‘Whilst we saw hotel performance in Beirut struggle after the assassination of the country’s former Prime Minister in February 2005, we had started to see some signs of improvement earlier this year. However, the recent events have obviously pushed this back. Given that the cease-fire is in its infancy, it’s hard to anticipate how long the hotel market will take to recover. The reality is given the extent of infrastructure damage alone that this is likely to take some time.’
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