Lebanese hotels are bracing for a challenging Christmas season amid the continuing Israel-Gaza conflict, which has spilt into Lebanon for weeks, escalating into a border conflict.

Cross-border clashes between Iran-backed Hezbollah and Israel resumed on the Lebanese border on Friday, with at least three dead in southern Lebanon, including a Hezbollah fighter and his mother.

Despite not officially being part of the week-long truce between Hamas and Israel in Gaza, which ended on Friday morning, the Lebanese front had generally followed the pause in fighting.

Hezbollah and allied armed groups, including Hamas fighters based in Lebanon, have exchanged fire with Israel since October 8, seeking to divert attention from its assault on the Gaza Strip.

The continuing exchange of fire at the southern border, which led to the reduction of flights to Lebanon and prompted foreigners to leave, heeding government advice, has left hotels in a dire state, with occupancy rates reaching record lows.

“The occupancy rates in hospitality range from 0 to 7 per cent,” Pierre Achkar, the president of the Lebanese Federation for Tourism Industries, told The National.

“Many hotels had no other choice but to partially close their doors,” he added, saying that he expects a “disastrous” December.

“Even if the situation improves right now, it will take months for confidence to return,” he explained.

An employee at the travel agency Barakat told The National that the company had seen a 60% to 70% decrease in hotel bookings since the start of the conflict.

It has stopped all of its tours, including to the Jeita Grotto and popular wine-tasting vineyards.

The slowdown in international visitors has threatened the cash-strapped Lebanese economy, which is reeling from a devastating economic crisis now in its fifth year.

Lebanon had pinned its hopes on tourism to inject much-needed funds into its economy. Tourism contributed 26 per cent of its foreign receipts last year, according to a report from S&P Global Ratings, an international credit rating provider, at the beginning of November.

According to one possible scenarios, the agency said tourism revenue might fall by 70 per cent in Lebanon.

Diaspora 'not enough' to save the season

A hotel manager in Beirut told The National that the forecasted occupancy rate for December is 14 per cent compared to last year's 47 per cent.

So far, the hotel's strategy has involved reducing operating costs, but if the situation lingers, it may not survive without making cuts, potentially including employee layoffs.

“There are no foreign visitors; the few bookings we have all come from the Lebanese diaspora,” said the manager, who asked to remain anonymous.

He added that the influx from Lebanese diaspora this Christmas, however big, would “not be enough to cover the hotel's losses.”

Lebanon relies on a resilient and massive diaspora, which has helped keep the economy afloat through crises over the years.

However, many hotel bookings in the country are tied to corporate events rather than “local tourists” returning for holidays.

Events and conferences have all been cancelled or postponed amid fears of a broader conflagration.

Hotels traditionally relying on “local tourists” seem, therefore, less impacted. An employee at the InterContinental Mzaar, an upmarket hotel in the snowy mountains, said rentals of its chalets were at the same level as last year.

They added that it would be easier to assess occupancy levels later in the month when there is better snow.

'A snowball of cancellations'

This had been a booming tourism year, with the summer witnessing the most travellers since 2018. But this abrupt halt jeopardises the country's tourism projections of $9 billion for 2023.

A total of 1.35 million travellers visited the country this summer, 30 per cent of whom were foreigners.

Another hotel owner in Beirut said his hotel experienced “a snowball of cancellations” as soon as the conflict started. “We were responding to 15 cancellation emails per day.”

The owner said the occupancy rate dropped to 10 per cent and has not recovered, whereas it is usually around 50-60 per cent from December until Christmas.

He added that the risk is that the crisis lingers, which would be extremely difficult for a sector that has been accumulating crises, from an economic meltdown to the pandemic.

“We were only starting to recover,” he lamented.