Lebanon Tourism Season Revives Economic Outlook

People are seen at the arrival lounge at Beirut International Airport, Lebanon. (Asharq Al-Awsat)
People are seen at the arrival lounge at Beirut International Airport, Lebanon. (Asharq Al-Awsat)
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Lebanon Tourism Season Revives Economic Outlook

People are seen at the arrival lounge at Beirut International Airport, Lebanon. (Asharq Al-Awsat)
People are seen at the arrival lounge at Beirut International Airport, Lebanon. (Asharq Al-Awsat)

The surge in visitors to Lebanon during Eid al-Adha and high demand for summer concert bookings are boosting hopes for a revival in tourism.

This sector is crucial for reigniting positive economic growth after about nine months of challenging conditions due to the Gaza war and subsequent border clashes between Hezbollah and Israel in southern Lebanon.

Contrary to earlier fears this month of possible Israeli strikes inside Lebanon, Ali Hamieh, caretaker Minister of Public Works and Transport, reported a daily average of 14,000 arrivals at Beirut’s Rafic Hariri International Airport, with numbers on the rise.

Jean Abboud, President of the Association of Travel and Tourism Agents, confirmed that despite initial concerns, booking rates have bounced back to 90-95% after Israeli threats of a mid-month strike. Most arrivals are Lebanese expatriates and foreign workers.

Before the summer season’s anticipated surge, Lebanon saw a 5.37% decrease in arrivals, with air traffic down by 9.34% and passenger numbers at Beirut International Airport dropping by 6.84% in the first five months of this year, totaling 2.29 million travelers compared to 2.46 million last year.

These declines were linked to the border clashes.

Lebanon’s tourism sector, generating over $5 billion annually in recent years, ranks as the country’s second most vital revenue stream after expatriate remittances, which officially approach $7 billion.

Together, they contribute more than half of Lebanon’s national income, which has dropped sharply from about $55 billion to under $22 billion due to the ongoing financial and currency crises that erupted five years ago.

Despite significant losses during peak tourism seasons like Christmas, Easter, and Eid al-Fitr, a report by Bank Audi indicated that Lebanon’s tourism revenues lost over $1 billion in the first six months of the Gaza conflict, driven by a 24% drop in tourist arrivals.

On average, tourists spend around $3,000 during their stay in Lebanon.



Gold Hits over 2-week Low as Higher US Dollar, Yields Dent Appeal

Marked ingots of 99.99 percent pure gold are placed in a cart at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia March 10, 2022. REUTERS/Alexander Manzyuk/File Photo
Marked ingots of 99.99 percent pure gold are placed in a cart at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia March 10, 2022. REUTERS/Alexander Manzyuk/File Photo
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Gold Hits over 2-week Low as Higher US Dollar, Yields Dent Appeal

Marked ingots of 99.99 percent pure gold are placed in a cart at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia March 10, 2022. REUTERS/Alexander Manzyuk/File Photo
Marked ingots of 99.99 percent pure gold are placed in a cart at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia March 10, 2022. REUTERS/Alexander Manzyuk/File Photo

Gold prices slipped 1% to their lowest level in more than two weeks, weighed down by a stronger dollar and higher bond yields, while traders looked forward to US inflation data due later this week.

Spot gold fell 0.9% to $2,299.40 per ounce by 10:03 a.m. ET (1403 GMT), hitting its lowest since June 10. US gold futures also fell 0.8% to $2,311.30, Reuters reported.

"At this point, market may very well be responding to the firmer US dollar and we continue to price in the possibility that the US Federal Reserve is unlikely to move (interest rates) earlier in the summer," said Bart Melek, head of commodity strategies at TD Securities.

The dollar rose 0.4% to a near two-month peak against its rivals, making gold more expensive for other currency holders, while benchmark US 10-year yields hit a near two-week high.

Focus this week will be on the US personal consumption expenditures (PCE) price index, Fed's preferred inflation gauge, that could shed more light on the US interest rate path.

Also on the radar, US first-quarter gross domestic product estimates and a crucial debate between US President Joe Biden and Republican rival Donald Trump on Thursday.

Data out on Tuesday showed US consumer confidence eased in June amid worries about the economic outlook, but households remained upbeat about the labor market and expected inflation to moderate over the next year.

Fed Governor Michelle Bowman on Tuesday reiterated her view that holding the policy rate steady "for some time" will probably be enough to bring inflation under control, but also repeated her willingness to raise borrowing costs if needed.

Higher interest rates increase the opportunity cost of holding non-yielding bullion.

Spot silver fell 0.5% to $28.79, palladium lost 2.8% to $921.75, while platinum climbed 1.7% to $998.75.