J.14 Lebanon Tourism Assessment.pdf

Lebanon Opportunities for Rapid Economic Growth Through Tourism

Ibrahim Osta November 16, 2018

International Tourism

Continues to Grow

World International Tourism 2017 1.33 billion tourists Growth 2018 – 6.1% (first half) Middle East Region +5%

Largest industry worldwide 11% of world economy

UNWTO

Strengths of the tourism industry GDP growth @ 2x+ revenue Multi-sectoral, high multiplier Spurs investment Spreads development across regions Earns foreign exchange Labor intensive Builds country image Fosters cross-cultural understanding and peace

Lebanon’s Tourism Sector Setting the Scene

Declining Exports

Current Account Deficit

-9.5 Billion

Declining

In Services

Services

Additionally, Trade deficit persists

Foreign deposit inflows eased

Pressure on currency continues

Lebanon’s Tourism Sector Strengths and Opportunities

Key Findings

2011, 2016 Landmark

Years for Arrivals

Growth Continuing

Average 10% growth in 2017,

1.857 million arrivals

2018 (Jan-Aug)

1.5 million arrivals

2010 2015 2016 2017

Lebanon's International Tourism Receipts Million USDDownturn

Ravaged International

Receipts

Receipts lag arrivals rebound

Visitor spend is lower

And Hotel Occupancy

Remains Low

2017 Lost Potential Revenue $595 million

Year Occupancy Rate

2015 37.4% 2016 36.7% 2017 40.9%

Jan - Sep 2018 39.9%

Source: Ministry of Tourism

Hotel Room Supply

21,810 Rooms

408 Hotels

Most under 80 rooms

3 & 4 stars predominant

@75% Occupancy = 2.8 M RmN $100/night Average Daily Rate $120/day Average Daily Spend

> $1.2 billion GDP

10% annual increase past two years

2017 1.857 Million

2018 1.5 Million Jan-Sep

Arrivals By Continent

Changing markets trend (2011-2017)

• Arab declined from 35% to 30% o Iraq, Jordan, Egypt, Saudi

• Europe increased from 29% to 34%

• Americas increased from 14% to 18%

Year Africa America Arab countries

Asia Europe All others Total Arrivals Millions

2015 85,187 264,041 480,723 122,400 505,284 60,292 1.518

6% 17% 32% 8% 33% 4% 2016 103,193 296,831 522,922 125,418 564,499 75,494 1.688

6% 18% 31% 7% 33% 4% 2017 109,230 327,536 561,273 136,600 639,624 82,532 1.857

6% 18% 30% 7% 34% 4% Jan-Sep 2018 87,630 287,887 419,142 103,705 537,846 69,535 1.506

General Trends

Changing Markets

Changed profiles

France Germany England Sweden Italy Turkey 2015 134181 74823 56608 28376 29143 21027 2016 145656 87567 61994 34622 29574 25487 2017 164924 96711 68360 38958 33642 29839

Jan-Sep 2018 139620 82876 56415 35021 27295 23389

Top 6 European Markets

Top Source Regions: Europe, Arab, Americas

Overall Implications

• Declining Arab arrivals reduced retail shopping, 5-Star demand

• Increasing European arrivals present opportunity for rural & cultural tourism

• Increasing demand from Latin America an opportunity for long stay and high spend

TOTAL VISITORS PER SITE

2014 2015 2016 2017

JEITA 182,521 221,782 186,737 222,849

JBEIL 72,007 89,259 90,730 93,439

BEITEDINE 48,353 62,430 72,967 85,334

BAALBECK 33,900 36,870 51,665 78,448

SAIDA 24,069 27,250 45,227 52,960

National Museum 23,476 32,045 39,117 38,157

TYR 8,383 11,867 14,217 18,546

FAKRA 10,532 9,916 10,537 12,012

NIHA 496 603 549 1,040

TRIPOLI 1,465 2,129 2,315 2,880

General Trends

Changing Markets

Changing profiles

WEF Tourism Competitiveness

Index

96th out of 136

94th in 2015

Global Markets Interest in Lebanon

Global Interest in Lebanon Content

• The number of the international sessions viewing Lebanon content on TripAdvisor has grown significantly in 2017 vs.

• Overall global views to Lebanon in 2018 has grown by 26% since 2017

Source: TripAdvisor Internal User Data – Confidential For Internal Use Only

Annual Growth in Lebanon Views by Market

• Out of the top 20 countries viewing Lebanon, Italy, Sweden and Spain showed especially strong increased views of Lebanon destinations in 2018/17 versus 2017/16

Source: TripAdvisor Internal User Data – Confidential For Internal Use Only. Date range: May 2016 – April 2018

Top Countries Viewing Lebanon International IPs

• The US leads the international viewing of Lebanon content on TripAdvisor, followed fairly closed by France and the

UK

Top Destinations Viewed After Lebanon

Source: TripAdvisor Internal User Data – Confidential For Internal Use Only. Date range: May 2016 – April 2018

US UK UAE

Top Lebanon Cities Viewed on TripAdvisor International IPs

• Beirut is the top Lebanon city viewed by international IPs, followed by Jounieh and Byblos

Key Findings

Strengths

Ecotourism potential distinctly strong

• Varied geography: sea, mountain, inland

Rich community-based tourism experiences

• Charming villages

• Culinary experiences

• Wine tourism experiences

• Charming guesthouses in various regions

• Rural experiences available and ready for promotion

• Diversity of cultures and orientations

Nightlife major potential draw

• City Breaks; Millennials; Image building

Religious tourism an opportunity to draw new markets

Adventure Tourism

• From soft to extreme

Sustainable Tourism Potential

Strengths

Momentum underway

Vibrant municipalities

• Many with clear vision, active leaders and engaged communities Numerous innovative initiatives

• Religious tourism initiative with Prime Ministry

• National tourism strategy with Prime Ministry Economic

& Social Council

• International tourism promotion first steps (Visit

Lebanon)

• Social media platforms (Live Love Lebanon)

• Lebanon’s Most Beautiful Villages

Recognized and successful USAID investments

• Need to sustain and continue LIVCD and others

Artistic capability: Weddings, Events, Music

Availability/underutilized hotel room supply

Key Findings Weaknesses

CUSTOMER

PERCEPTION

IS LEBANON’S

REALITY

Security perception improved, but remains grossly poor

WEF Score 125/136

Weaknesses

Fragmentation across the board Weak ministry

No agreed national tourism strategy

Absence of a tourism board

No coherent international promotion strategy

Airlift – routes and prices

Weak business associations, yet there is potential

Mediocre quality of service in the regions

Limited room supply for the future (also an opportunity) Need for integration

Weaknesses

Need for integration

Brain drain Limited skilled labor pool

Frozen capital investment past few years

Lack of sufficient meeting/convention facilities

Airport service and capacity

Reliable public transportation (also an opportunity)

Opportunities

Convergence of global trends with Lebanon’s strengths

Global tourism rising Risk tolerance rising

Resilient market segments exist & ready to grab

Millions of Lebanese want to reconnect with their roots

More responsible travelers fit Lebanon’s offer

Rise of the Millennials

Faith travel is rising and resilient (under achieving in

Lebanon)

Rapid expansion of destination weddings globally

MICE seeking new destinations (different market, different value chain)

Regional market opportunities

Considerations for

USAID

To Support Tourism-Driven Economic Growth

Tourism Strategy Opportunities

Pillar 4 Enabling Environment for Sustainable Growth Sustainability, Governance, Quality Assurance, Planning, Enterprise Development and Investment

Pillar1 Destination Marketing

Present Lebanon to the World

Pillar2 Visitor Experience

Development

Build on authentic & distinctive experiences

Pillar 3 World Class Human

Capital

Provide world class services

Overriding Marketing Approach

Solidify growth

Build destination resilience

Diversify markets

Target high-yield marketable segments

Based on:

Segments

Profiles

Motivations

Psychographics

Digital Personnas

Pillar 1

Destination Marketing

Identify

Intrepid Travelers

• Improve Lebanon’s image as a safe and stable destination

• Improve Lebanon’s visibility across all digital channels as a key take-to-market approach

• Increase high yield visitors from key target markets

• Position Lebanon as a distinguished culinary and wine destination

• Build tour operators capacity in sales and promotion

• Expand the source market travel agent network selling Lebanon and equip them with sales tools

• Improve capacity of ATTAL and other promotional players in the market (Live Love Lebanon, etc)

• Anchor international events: Destination Resilience (ITCMS), Digital Marketing with TripAdvisor, Wine Conference with UNWTO

Pillar 2

Visitor Experiences

Capitalize on existing rich experiences

• Identify, compile and integrate available experiences

• Create new themed itineraries

• Culinary tours

• Wine route

• Crafts route

• Biblical route

• Galleries & museums route

• Prophets and miracles

• City tours: Taste of Beirut, pub crawl, Phoenician discovery, extreme adrenaline, etc

• Build tour operators’ awareness of non-traditional tourism options

• Build SMEs capacity package, present, promote and manage

• Better product-market alignment

• Better MICE packaging and targeting

Pillar 3

Visitor Experiences

Provide world class services

• Create on-the-job training programs within industry

• Promote standardized training for hospitality workers

• Upgrade one or more tourism/hospitality university program(s)

• Conduct training in regions for guesthouses and restaurants on health hygiene, presentation and visitor servicing

• Improve local tour guiding skills

• Build/improve tourism information office staff skills

• Support specialized skill improvement in selected areas

Pillar 4

Enabling Environment

Toward a competitive tourism economy

Support adoption of a national tourism strategy/plan Promote international sustainable/green certifications to guide sustainable development & conservation

Enhance municipal tourism planning based on international models (community engagement, experience design, branding)

Improve research and analysis to inform strategy & investment

Advise on essential regulatory improvements

• Tour operators classification at Ministry

• Guesthouse regulations at municipalities

• Policy reform priority consultations

• Policy advocacy support Concept and governance advice for creating a tourism board

(if support is sought)

Expected Results of USAID Investment

Help Lebanon achieve

• $595 million annually in increased FOREX via tourism revenue

• Around $1.2 billion annually in GDP growth

• Thousands of jobs across sectors, education and skill levels

• Secure & build resilience to protect from shocks

• Stem rural-capital migration

• Diffuse economic activity across Lebanon’s regions

• Spur growth of new investments worth hundreds of millions (hotels, restaurants, conferencing facilities, transport, etc)

What is possible under

LED?

Integrated Tourism Industry

Development

Current LED Scope & Contract

• Respond to firms that can demonstrate job growth in tourism under the current contract parameters without LED active involvement in tourism

• Support formation of Lebanon Inbound Tour Operators (or Tourism)

Association

Contract impact: no change, few companies picked, focused BEE investment in a single sector -- tourism)

Additional to LED – High-Impact Tourism Industry Development

Per the above four pillars, identify high impact initiatives that will have sector-wide impacts. Because of the broad, multi-sectoral growth results.

Contract impact: USAID may consider active support for the tourism sector additional to the current contract scope and resources of LED (additional funded activity/component)