In the wake of Lebanon’s economic crisis, many Lebanese homeowners have turned to short-term vacation rentals as a lifeline.

Lebanon’s economic woes began in late 2019, triggered by decades of corruption, political instability, and mismanagement of public funds. The situation deteriorated rapidly, leading to a financial meltdown that saw the Lebanese pound progressively lose over 98 percent of its value against the US dollar.

The devaluation decimated the purchasing power of citizens, plunging many into poverty. Banks imposed strict withdrawal limits, trapping people’s life savings, while the cost of basic goods and services skyrocketed due to hyperinflation.

The crisis was further compounded by a series of catastrophic events. In August 2020, a massive explosion at the port of Beirut killed at least 218 people and caused widespread destruction, further straining the country’s fragile economy. The COVID-19 pandemic exacerbated the situation, as lockdowns and restrictions crippled businesses and led to soaring unemployment rates.

The ongoing political deadlock has prevented the formation of a stable government capable of implementing necessary reforms and securing international aid. The tiny Mediterranean country has been without a president since the term of former head of state Michel Aoun ended in October 2022. It has a caretaker cabinet led by Prime Minister Najib Mikati but with limited powers.

For several Lebanese, the economic downturn has been relentless, leaving them desperate for new income streams to offset financial losses. Facing these realities, homeowners like Issam Noujeim, 50, found themselves at a crossroads.

“I had two options: either leave the country or stay and find ways to sustain ourselves,” Noujeim, a school teacher and father of two said. “I never imagined turning our summer family house into a rental property, but the country’s circumstances left us with few alternatives.”

Noujeim built the house, complete with a garden, in 2017 in Beit Chabab, a mountain village located 24 km north of Beirut in Mount Lebanon. By 2021, he had transformed it into a short-term tourist accommodation, welcoming guests through Airbnb and other rental platforms.

“The business started growing, and with the money earned, I began improving the place—from the interior furnishings to the garden setup, including lighting,” he said. “Less than two years later, the property evolved from hosting guests seeking getaways to accommodating private events and parties in the garden, such as birthdays and bachelorette celebrations, generating additional revenue.”

Noujeim’s story is not unique. Across Lebanon, many apartments have appeared on short-term rental platforms in recent years.

In Beirut alone, there are over 2,200 short-term rental listings on platforms like Airbnb and Vrbo, according to rental analytics firm AirDNA. In the northern district of Batroun, AirDNA indicates around 900 active vacation rental listings. These listings include entire homes, private rooms, and shared spaces.

Pierre Achkar, president of the Federation for Tourism and Hotel Associations in Lebanon, highlighted the evolution of the Airbnb market over the past eight years, noting its rapid growth in contrast to the gradual development of Lebanon’s traditional hospitality industry over 150 years. He added that the Airbnb business has experienced significant expansion in the past four years.

Elie, a 32-year-old banker whose name was changed for anonymity, purchased an apartment in 2018 as an investment, intending to prepare it for his residence. However, before he could move in, the crisis severely impacted the industry where he works.

“When things started going downhill, I decided to stay at my parents’ house and rented out my apartment on Airbnb to earn extra income,” he said.

Affordability and convenience

Short-term rental homes appeal to travelers, particularly families and groups, because of their affordability and convenience. Many find that staying at these properties can be cheaper than booking a hotel room. They also often offer more amenities, such as kitchens and private gardens.

Whenever Dima Habbouchi, a 45-year-old Lebanese resident of the United Arab Emirates and mother of three, visits her homeland, she prefers to stay in an Airbnb.

“We’re a family of five, so staying in a tourist apartment is more convenient and affordable for us, especially since it allows us to control our spending,” Habbouchi told Al Arabiya English. “Airbnb provides a home-like environment. We particularly appreciate the extra space, the ability to cook our meals, and the privacy that comes with staying in a standalone apartment.”

This sentiment is echoed by Jalal Fares, a 38-year-old Lebanese living in Baku. “Staying in an Airbnb is not just about saving money, it’s also about the experience,” Fares said. “You get the comfort of a home and the flexibility to stay longer. Airbnb also offers unique accommodations in areas where traditional hotels may not be available.”

Beit Chabab is one of those areas lacking hotels. Noujeim was the pioneer in introducing Airbnb to the village. Over time, more guesthouses were established, revitalizing tourism in the area.

Hotel occupancy decline

The surge in alternative lodging options has created ripples across the traditional hospitality sector, leaving hotels grappling with new challenges.

Hotels, already struggling with low occupancy rates due to the escalating hostilities between Israel and Hezbollah, now face the added pressure of competing with a growing number of Airbnb listings.

“Hotel occupancy rates have certainly dropped compared to last year,” Achkar told Al Arabiya English. “The popularity of Airbnb, combined with the fallout from the Israel-Hezbollah conflict, has created a challenging environment for us.”

Lebanon finds itself teetering on the brink, enduring near-daily bombardments from Israel that target border villages and extend deeper into the country, persisting for more than eight months now.

The cycle of violence began on October 8, one day after Hamas’ surprise attack on Israel, which prompted Israeli retaliation against Gaza. Since then, with Lebanon’s Hezbollah joining the fray, both Israel and the Iran-backed militant group have been engaged in ongoing exchanges of fire.

Recent developments have heightened fears of a full-fledged war, with cross-border attacks intensifying and both parties preparing for possible large-scale military engagements.

“We’re living day by day through this ordeal. Some guests are postponing their bookings whenever tensions escalate,” Achkar noted. Habbouchi, for instance, is carefully reconsidering her plans to visit Lebanon this summer.

Hotel occupancy decline has catalyzed a push for regulatory intervention. Hotel owners argue that the Airbnb market is neither controlled nor regulated and that achieving a balanced and fair market can only be accomplished through supportive measures from the government.

“We’re not opposed to Airbnb; it represents an innovative addition to global tourism. What we’re asking for are policies that address the needs of both hotel owners and Airbnb hosts,” Achkar highlighted. “This includes fair taxation and clear regulations to ensure healthy competition.”