Lebanon: GDP in free fall as Gulf Arabs pull out

Luxury homes, hotels on sale on fears of Syria spillover

18 January, 16:51

(ANSAmed) - ROME, JANUARY 18 - Fearing spillover from the Syrian civil war, Gulf millionaires are putting their luxury Lebanese real estate up for sale, further deepening a two-year economic crisis there, which some are now openly calling a recession. Lebanese GDP was 1.7% in 2012, down from 3% in 2011 and a far cry from the 8% average yearly growth between 2007-2010, according to the International Monetary Fund. The main factor has been the drop in tourism, on which the Country of Cedars depends: over a year, hotel occupancy plunged -47% to 35% in November, the lowest level since 2008, L'Orient Le Jour newspaper wrote. Clashes between loyalists and opponents of Syrian President Bashar al-Assad in northern Lebanon and Tripoli, the spillover of fighting from Syria into Lebanese territory, and the recent kidnappings of various foreigners induced the six-member Gulf Cooperation Council to issue Lebanon travel advisories for its citizens, which made up Lebanon's most prestigious and affluent clientele. ''If Arab tourists no longer come and the Europeans decide to do the same, what market can we work in?'' asked tourism trade union federation secretary general Jean Beyrouthi.

To make matters worse, the wealthiest Arabs are also pulling out of the real estate market. Many Gulf elite homeowners are putting their Lebanese residences on the block, while Saudi emir Walid Ben Talal recently sold his share of the five-star Movenpick Hotel in Beirut for 138 million dollars, and Dubai-based construction mogul Khalafat al-Habtoor mentioned plans to sell two luxury hotels and a shopping center, also in Beirut. ''The tendency began a year ago, and it accelerated in the past six months after the Gulf monarchies issued travel advisories against our country,'' said Joe Kanaan, who heads the Sodeco Gestion real estate agency, adding that luxury housing prices have already dropped 15-20% as a result. (ANSAmed).

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