Lebanon’s battered tourism industry is showing early signs of recovery as a ceasefire with Israel brings hope for a Christmas season rebound, though the sector faces an uphill battle after losing an estimated $1.5 billion in revenue over the past year of conflict.

Airlines report fully booked incoming flights for the holiday period, marking a potential turning point for a sector that has seen tourist arrivals plummet 24 percent in the first eight months of this year, compared to a 25 percent rise in the same period of 2023.

“Lebanese expatriates have been postponing their trips to Lebanon for a while because of the war,” said Marwan Barakat, Group Chief Economist at Bank Audi, noting that the average tourist spends around $3,000 during their stay in Lebanon.

For many Lebanese expatriates, the ceasefire has sparked a mixture of relief and caution.

“I’m relieved but still worried. The ceasefire feels like a dream come true, almost too good to be true. You never know what could happen, and I’m scared that one of the parties involved might not respect it due to the lack of trust stemming from recent events,” said Aya Melki, a Dubai-based Lebanese PR professional.

Melki, who hopes to return for Christmas, faces practical challenges. “Middle East Airlines is the only airline operating, and its flights are already full with high prices. I’m waiting for other airlines to resume operations so I can book my ticket. It’s a risk, but what can we do? Lebanon is a love story for me, and I can’t imagine not being there for the holidays.”

The tentative recovery comes as Lebanon implements a ceasefire agreement that took effect on Wednesday, ending more than a year of violence that began when Hezbollah launched strikes at Israel on October 8, last year, in solidarity with Hamas following its attack on Israel.

The conflict has taken a severe toll on Lebanon’s economy, with the World Bank estimating total economic losses at $8.5 billion, including $1 billion in direct losses to the tourism and hospitality sector. The violence has displaced approximately 1.2 million Lebanese, many fleeing from southern Lebanon, Beirut’s southern suburbs, and the Bekaa Valley.

Tourism’s potential recovery could provide a crucial lifeline for Lebanon’s economy, which the World Bank had already designated as suffering one of the worst financial crises globally since the mid-19th century before the current conflict began.

Looking ahead, Bank Audi outlines three potential scenarios for 2025, with the most optimistic case predicting GDP growth above 8 percent if the ceasefire holds and political reforms are implemented. Even under a middle scenario, where the ceasefire persists but political deadlock continues, the economy could achieve modest growth of around 2 percent.

Other expatriates express more optimism about the ceasefire.

“I am relieved about the ceasefire but not worried about it not holding up, knowing how things are in Lebanon we would expect small complications,” said UAE-based psychomotor therapist and expat Mabelle El Koreh.

“Despite the complications, we are going to go back to Lebanon and celebrate with our families and our friends, and hopefully everyone is going to be safe.”

Economic recovery hinges on political stability

However, the sector’s recovery remains vulnerable to broader political and security developments. The current ceasefire agreement requires Israeli troops to withdraw from southern Lebanon and Hezbollah to pull back north of the Litani River within 60 days, with the Lebanese army set to deploy in the south supported by an international task force.

The conflict has particularly impacted important tourist destinations. Cities like Tyre and Nabatiyeh in south Lebanon, and Baalbek in the east, which serve as significant tourist hubs, have been heavily affected by Israeli strikes. Lebanese officials estimate reconstruction in some areas could take three to five years.

The tourism sector’s challenges are compounded by Lebanon’s ongoing political instability. The country continues to operate under a caretaker cabinet with limited powers and has yet to elect a president since October 2022. It has also failed to implement critical reforms required to unlock $3 billion in International Monetary Fund assistance.

“Only such a confidence revival can make the Lebanese get out of their political woes, frustrations and distress and bet on a promising economic future,” Barakat noted, highlighting the need for political stability to support economic recovery.

Despite the challenges, the emotional pull of Lebanon remains strong for its diaspora.

“What we’ve lived through these past couple of months has been monstrous, but it truly warms your heart to see how, as soon as the ceasefire was announced, people rushed to book their tickets. It shows just how deeply Lebanon is loved and how special it is to all of us Lebanese,” Melki said.

The Christmas tourism boost, if sustained, could provide much-needed foreign currency inflows for a country whose currency has lost more than 90 percent of its value against the dollar on the black market since the government defaulted on about $31 billion of Eurobonds in March 2020.