Lebanon business: Hope for a ‘new era’ after Saudi Arabia lifts travel warning

Lebanese businessmen say they are hopeful that Saudi tourists and investors will return after the kingdom announced on Wednesday evening that it had lifted a travel warning.

Saudi ambassador to Lebanon Walid Al Bukhari said that Saudi Arabia had dropped its warning “due to the absence of security concerns that led us to warn our citizens from travelling [to Lebanon] and the result of the assurances that we heard.” The policy change came after a meeting between Saudi royal court envoy Nizar Al Aloula and Prime Minister Saad Hariri in Beirut, the state-run Lebanese National News Agency reported.

The small Mediterranean country, reputed for its easy-going way of life, used to be a popular destination for tourists from the Gulf who enjoyed Lebanon’s breezy mountains, seaside resorts and vibrant nightlife.

With the change in policy, local businesses are hopeful that they will see a return to the old days after years struggling under a slump in tourist numbers largely due to the neighbouring Syrian conflict, its spill over and regional tensions.

“We really hope our Saudi clients will return and that other Gulf countries will follow,” said an employee of a luxury watch company in downtown Beirut who asked to remain anonymous as he didn’t have permission to speak to the press. “Now we only have mid-range sheikhs, not like before”, he says, as rain poured on the largely empty streets outside.

Jean Beyrouthi, secretary general of the federation of touristic unions in Lebanon, told The National that lifting the travel warning “is the first step towards a new positive era” between Lebanon and Saudi Arabia.

What they spent while on holiday in Lebanon in 2010 and 2011 represented nearly half of the total annual tourism expenditure, says Mr Beyrouthi.

Toni Rami, head of the syndicate of restaurant, café and club owners, told the NNA on Thursday that “Gulf and Saudi tourists, in particular, are the most important [for Lebanon] and the biggest spenders because they do not come as tourists only but as investors, partners, and employers of more than 500,000 Lebanese living in the Gulf”. With high unemployment in Lebanon, many highly-skilled Lebanese have moved to the Gulf for work.

By mid-2012, four countries, Saudi Arabia, the UAE, Qatar and Bahrein, had advised their citizens to avoid Lebanon because of an increase in kidnappings, car bombs and gunfights due to the Syrian conflict.

The number of tourists from Arab countries fell hugely between 2010 and 2014. According to data from Lebanon’s Bankmed, from over 191,000 Saudi and nearly 47,000 Emirati visitors in 2010, only around 40,000 Saudis and 7,500 Emiratis visited in 2013. This drop wasn’t just from the Gulf, from nearly 275,000 Jordanians in 2010, it dropped to 73,000 in 2014.

In February 2016, Saudi Arabia and Bahrein re-iterated their warning as tensions with Iran mounted. The UAE banned its nationals from visiting the country entirely and reduced the number of its diplomats stationed in the Lebanese capital. Tourism Ministry data from the year showed a 35 per cent drop in visitors from the kingdom in 2016 and a 72 per cent drop in UAE visitors after the announcements.

This warning came only a week after Saudi Arabia suspended aid worth $3 billion to the Lebanese army over the Beirut government’s failure to sign up to statements condemning attacks on Saudi diplomatic missions in Iran. The Lebanese government officially maintain a policy of non-interference in regional issues given that parties are broadly split on their viewpoint. But in practice, this has been criticised as a cover, given Hezbollah’s heavy military involvement in Syria on behalf of Bashar Al Assad.

The relations between Lebanon and Saudi Arabia further deteriorated after Mr Hariri’s shock resignation in November 2017 from Riyad, which he later rescinded when he returned to Beirut.

A Saudi national was briefly kidnapped in November 2017, disappearing just a day after Riyadh advised all nations to leave the country immediately. He walked up to a Lebanese army checkpoint in northern Hermel several days later.

The crisis also saw the hasty withdrawal of the Saudi Ambassador to Lebanon and his staff. Mr Al Bukari, who had previously represented his country in Beirut, returned to Lebanon several months later to take up the post of charge d’affaires and later ambassador. He is seen as a practical diplomat who has a good grasp of the Lebanese political scene and strong relations with several local parties.

But with visitor numbers down, Saudi real estate investments in Lebanon, mostly located on the Beirut seafront or holiday apartments in the mountains, were sold off or left unoccupied.

Saudi Prince Alwaleed bin Talal’s Kingdom Holding sold its stakes in the Four Seasons Hotel in Beirut for between $100-115 million (Dh 367-422 million) in December 2017, as well as his stakes in the Movenpick Hotel a year later.

“We can’t say for sure if this decline in Saudi investments in Lebanon was a direct consequence of the travel warning. Saudi Arabia was also going through major economic changes at the time”, Fouad Zmokhol, president of the Lebanese association of business people in the world, told The National.

Since becoming crown prince of Saudi Arabia in June 2017, Mohammed bin Salman has launched vast socio-economic reforms including an anti-corruption campaign which targeted several top Saudi businessmen including Alwaleed bin Talal late 2017.

But the announcement of a new cabinet on January 31 in Lebanon appears to have initiated a change in the two countries’ relations.

Less than two weeks later, Mr Al Aloula arrived in Beirut to “congratulate Lebanon for forming a government”. In addition to lifting the travel warning, Saudi Arabia has announced its intention to set up a “joint committee” between the two countries, said ambassador Bukhari on Wednesday.

“It’s a good sign for Lebanon, but it will take time to see if we can make the best of it”, says Mr Zmokhol. “We can continue fighting amongst ourselves or show the world that we can be trusted”, he added, referring to the heated debates in Parliament the past few days.

Hundreds of supporters of the Kataeb party took to the street on Wednesday night after a vicious spat between part MP Nadim Gemayel and Hezbollah MP Nawwaf Musawi. The latter accused Mr Gemayel’s father, Bashir Gemayel, of being elected president “with the help of Israeli tanks”. He was assassinated in 1982, the year Israel invaded Lebanon, just 22 days after the vote and before he could take office.

Mr Beyrouthi says he hopes that Saudis will be back in time for the skiing season that ends next month. Lebanon houses the biggest ski resort in the Middle East.

“Why go to Europe? We speak the same language as them and we have the best food, nightlife and shops,” he boasts.