The power of tourism

Le­banon’s im­ported lux­ury brand agents dis­cuss the im­pact of vis­i­tors on their busi­ness

Executive Magazine - - Front Page - Words by Na­bila Rah­hal

prior to 2012, it was a com­mon sight to see wealthy tourists — mainly from the Gulf — and even some Le­banese shop­ping in Beirut’s lux­ury brand stores that dot the ex­pan­sive streets of Down­town Beirut and the high-end sec­tions of Le­banon’s malls.

Dur­ing the past ve years how­ever foot­fall in many of th­ese in­ter­na­tional lux­ury brand stores has been lan­guish­ing due to the po­lit­i­cal in­sta­bil­ity and re­gional inse­cu­rity that have a ected Le­banon. he de­crease in tourists from the Gulf, as well as the dwin­dling pur­chas­ing power among lo­cal Le­banese, has had a large neg­a­tive im­pact on th­ese agents.

With Le­banon en­joy­ing more sta­bil­ity now — fol­low­ing the elec­tion of Pres­i­dent Aoun in late 2016 — it is hoped that the lux­ury re­tail mar­ket will also pick up. Ex­ec­u­tive Life spoke to im­porters of lux­ury brands to get their per­spec­tive on the mar­ket in sum­mer 2017 and their ex­pec­ta­tions for the up­com­ing few years.

TOUR­ING LUX­URY

Although no ex­act gures were pro­vided, the im­porters of lux­ury brands that Ex­ec­u­tive Life spoke to say that tourism has al­ways been a key driver for lux­ury re­tail in Le­banon. his is es­pe­cially true dur­ing the sum­mer or win­ter hol­i­days sea­sons, ac­cord­ing to Ziad An­nan, owner of A&S Chronora, the ex­clu­sive re­tailer of olex and udor watches in Le­banon.

Khalil Nou­jaim, the chair­man of Level 5 Hold­ing, which is the ex­clu­sive agent of French lux­ury brand Eden Park in Le­banon, also be­lieves tourism im­pacts re­tail. here has al­ways been a pos­i­tive cor­re­la­tion be­tween tourism and busi­nesses in gen­eral, and this year is no di er­ent. How­ever, the si e of the im­pact di ers from one in­dus­try to another. For in­stance, nor­mally tourism a ects the hos­pi­tal­ity sec­tor most, with re­tail com­ing in se­cond place,” he ex­plains.

Si­mone amer, chief com­mer­cial o icer of amer Fr­eres sal, be­lieves that tourists fa­vor shop­ping in the lux­ury brand stores owned by the group be­cause of the cus­tomer ser­vice pro­vided. ourists com­pare our rst class ser­vice with all the ag­ship stores they visit around the world. We fol­low the guide­lines and o er a mod­ern East­ern touch to our sell­ing ap­proach, as our cul­ture is known for high stan­dards of ser­vice and hos­pi­tal­ity,” she ex­plains, but adds that a missed op­por­tu­nity as­so­ci­ated with Beirut as a lux­ury shop­ping des­ti­na­tion is that Chi­nese and other Asian tourists are still not in­ter­ested in vis­it­ing Le­banon.

BRIGHTER HORI­ZONS?

With tourism hav­ing such a strong im­pact on the lux­ury mar­ket, it was no won­der the lux­ury re­tail in­dus­try in Le­banon gen­er­ally su ered over the past six years when the num­ber of vis­i­tors to the coun­try was low.

oday, tourism is on the rise again in Le­banon, with Beirut’s ve star ho­tels re­port­ing up to 0 per­cent oc­cu­pancy, the best it has been in the past six years, although not up to the level of 2010. How­ever, it seems that this has not yet trans­lated into more tourists from the Gulf com­ing to shop in Le­banon as they used to in the past.

he lux­ury brands Ex­ec­u­tive Life spoke to say Le­banese, whether ex­pats or re­sid­ing in Le­banon, con­tinue to be their main clien­tele. “Our per­for­mance is mainly driven by lo­cal Le­banese res­i­dents who highly ap­pre­ci­ate our de­signs and their French qual­ity, es­pe­cially since the brand has been in the mar­ket for al­most 16 years now. Le­banese ex­pats and Arab tourists started ap­pre­ci­at­ing our brand more a few years back fol­low­ing the in­ter­na­tional ex­pan­sion of Eden Park, mainly across the GCC mar­kets,” ex­plains Nou­jaim.

An­nan also says the ma­jor­ity of their clients are Le­banese. “ he ma­jor­ity of olex en­thu­si­asts in Le­banon are Le­banese liv­ing in­side and out­side the coun­try. Com­ple­ment­ing our lo­cal faith­ful clien­tele, the brand in Le­banon at­tracts an in­ter­est from many en­thu­si­asts liv­ing in the re­gion,” he says.

amer says ex­pats make it a point to shop in the lux­ury brands store in Le­banon when avail­able, as op­posed to the same brand in­ter­na­tion­ally, as they be­lieve they are help­ing the econ­omy that way. “Ex­pat vis­its are in­creas­ing, thanks to the air­line pack­ages and ser­vices pro­vided to them. Our loyal ex­pat clients refuse to buy from abroad, men­tion­ing to us that they want to pur­chase from the Beirut stores as they be­lieve that they are help­ing the econ­omy of their coun­try,” she says.

Mean­while Ma­her Atamian, man­ag­ing di­rec­tor at Est. Hagop Atamian (a dis­trib­u­tor of lux­ury and medium-end watches in Le­banon) says their im­ported lux­ury watch brands con­tinue to rely on lo­cal Le­banese and ex­pats, and have not yet felt an im­pact from the in­crease in Gulf tourists to Le­banon. “We are still re­ly­ing on the Le­banese ex­pats who visit Le­banon dur­ing the sum­mer and hol­i­day pe­ri­ods,” he says.

DOWN­TOWN LUX­URY

Down­town Beirut has all the mak­ings of a lux­ury re­tail area and in­deed it was al­most over ow­ing with vis­i­tors prior to 2012. “Down­town Beirut is the des­ti­na­tion in Le­banon that o ers the big­gest choice of mono­brand lux­ury bou­tiques, a wide ar­ray of high-end restau­rants, and a marina to com­plete the shop­ping ex­pe­ri­ence. he pres­ence of ve star ho­tels also helps in the po­si­tion­ing of the city as the lux­ury re­tail des­ti­na­tion in Le­banon and cre­ates or­ganic tra ic to lux­ury shops based in Down­town,” ex­plains An­nan.

n agree­ment, amer says, “ ourists are in­ter­ested in vis­it­ing this area as a lux­ury shop­ping des­ti­na­tion in Le­banon. All ser­vices are eas­ily pro­vided to them, and the ac­cess to the city is con­ve­nient, valet park­ing ser­vice is avail­able at every cor­ner, streets are equipped with park­me­ters for those who rent cars, cab ser­vices are all over the city, and most of the shops pro­vide them with tax free re­fund slips upon pur­chase or free de­liv­ery to ho­tels for heavy or ex­pen­sive items. Other ar­eas, such as Dbayeh with ABC and Le Mall, also ex­pe­ri­ence tourist foot­fall, but the only is­sue is that big brand names are not avail­able in th­ese des­ti­na­tions for high-end lux­ury clients, so as a brand mix to­day, Down­town re­mains the only des­ti­na­tion in Le­banon pro­vid­ing the best ser­vice for high-end lux­ury brands.”

But most say the ac­tiv­ity in the Down­town area has de­creased with the drop in num­ber of tourists, and this has a ected the lux­ury re­tail sec­tor in the area. “Down­town is the only true lux­ury des­ti­na­tion in Beirut. All ma­jor cities have their lux­ury in their ‘down­town’ ar­eas, and Le­banon is no ex­cep­tion. It’s very im­por­tant to have it, since tourists tar­get the cen­ter of the city when they visit. How­ever, again, Down­town to­day is su er­ing be­cause of lack of tourists,” ex­plains Atamian.

Nou­jaim also speaks of the de­creased ac­tiv­ity in Down­town Beirut, say­ing that this is be­cause the area at­tracts mainly tourists when it comes to shop­ping, while the Le­banese seek out lux­ury brands in malls. “ oday tourist num­bers are not enough alone to sus­tain a busi­ness in Down­town Beirut. his area should be re­vived to at­tract more lo­cals and be­come the main des­ti­na­tion for shop­ping in Le­banon,” says Nou­jaim.

TAK­ING AC­TION

2017 is not over yet. Sum­mer is still on full blast mode, and the po­ten­tial pro ts from the end of year hol­i­day pe­riod are still un­known, so a lot might change for lux­ury re­tail in Le­banon be­fore the year ends.

In the mean­time, lux­ury brand im­porters, such as Atamian are ask­ing for con­tin­ued po­lit­i­cal sta­bil­ity so things can get back on track and lux­ury brands can en­joy growth in Le­banon.

Nou­jaim asks for a re­con­sid­er­a­tion of rental fees, which would help re­tail­ers over­come this tough pe­riod. “ he main sup­port should be in ad­just­ing the rents in line with the over­all eco­nomic sit­u­a­tion the coun­try and the re­gion is go­ing through. his will bene t both the real es­tate sec­tor, as well as the re­tail in­dus­try, and will pro­vide a boost un­til the sit­u­a­tion nor­mali es,” says Nou­jaim.

ham­pagne, or sparkling wine, was ini­tially an ac­ci­dent — a nui­sance even. In post-Me­dieval France, bub­bles in wine were the un­wanted byprod­uct of al­co­holic fer­men­ta­tion un­der cer­tain con­di­tions, and they were dan­ger­ous. Some called it “devil’s wine” be­cause its pres­sure o en caused bot­tles to ex­plode, some­times start­ing chain re­ac­tions that de­stroyed much of the cel­lar’s stock. Though he’s falsely cred­ited for “in­vent­ing” cham­pagne, Benedictine monk Dom Perignon helped de­velop the re­gion’s wine in­dus­try, ini­tially re­search­ing wine bub­bles in an e ort to get rid of them. Ev­i­dently, over time peo­ple be­gan to in­ten­tion­ally pro­duce sparkling wine, with the Cham­pagne re­gion’s widely con­sid­ered the most pres­ti­gious. The old­est still ac­tive cham­pagne house, founded in 1729, is Ruinart.

To­day, cham­pagne is al­most al­ways as­so­ci­ated with good times — it’s a sta­ple on New Year’s Eve, boosts the mood at brunch, and you prob­a­bly had it at a wed­ding this sum­mer. It’s the stu of rap lyrics, Great Gatsby par­ties, and in­fa­mous Ibiza beach clubs. But cham­pagne can’t be re­duced to a pricey sparkling wine from a speci c re­gion in France or a sta­tus sym­bol — it’s an art, as well as an in­dus­try, and a lux­ury on many lev­els.

HOW IT’S MADE

In or­der to claim the ti­tle “cham­pagne” there are pro­duc­tion rules and le­gal re­quire­ments. The most ob­vi­ous is ge­o­graphic — the prod­uct must be made in France’s north­ern Cham­pagne dis­trict. A des­ig­nated trade group ercely pro­tects the name against im­posters, even brands who try us­ing the word for un­re­lated prod­ucts. In 1987, Per­rier was stopped from mar­ket­ing its wa­ter as the “cham­pagne of min­eral wa­ters.” Yves Saint Lau­rent lost a high-pro le law­suit when try­ing to name a scent a er the drink in 199 , and, more re­cently, Ap­ple was re­port­edly warned against nam­ing their 2007 iPhone color “cham­pagne” (they went with “gold”). But it’s not just the name — Cham­pagne’s cool cli­mate and unique soil give its wine char­ac­ter­is­tic avors.

The grape va­ri­eties used are pri­mar­ily com­bi­na­tions of the white grape and the black grapes and Some fruit is grown by the house, while other times it’s sourced from lo­cal grow­ers. Cham­pagne pro­duc­ers use the

where cham­pagne goes through two dis­til­la­tions, the rst usu­ally yield­ing a rather avor­less, acidic, low-al­co­hol liq­uid called This can be blended with older wines kept in re­serves, and is al­ways com­bined with yeast and sugar. Cham­pagne in the 19th cen­tury was signi cantly sweeter than that of to­day be­cause more sugar was added, but the cur­rent trend is tart. Bot­tles marked as

zero, and ex­tra con­tain al­most no sugar.

This blend is al­most al­ways bot­tled but not sealed com­pletely — us­ing glass that is thicker and

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