Coastal op­por­tu­ni­ties

With 220 km of coast, Le­banon is a nat­u­ral sea­side des­ti­na­tion. Although some iconic beach clubs, such as ATCL and Sport­ing, ex­isted be­fore the civil war be­gan in 1975, most beach con­cepts emerged af­ter­wards, from 1990 on­wards, and be­gan boom­ing in the 20

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To­day, the sea­side has be­come al­most sat­u­rated, with about 170 beach projects in ex­is­tence. De­vel­op­ers have dif­fi­culty find­ing avail­able plots of land with ac­cess to the sea on which to build new con­cepts. All along the coast, most of the land is al­ready ex­ploited. De­spite the re­cent tourism cri­sis, com­pe­ti­tion re­mains fierce for those who wish to se­cure a spot by the wa­ter.

‘Beaches’ cover a huge range of con­cepts, from small snack shops with plas­tic chairs to re­sorts worth half a bil­lion dol­lars in in­vest­ment. The one thing they have in com­mon is their ac­cess to the sea, whether sandy or rocky. Usu­ally, ‘beaches’ are di­vided into three cat­e­gories: pri­vate beaches, where vis­i­tors pay a daily en­trance fee; re­sorts, where clients book rooms; and gated com­mu­ni­ties that sell or rent bun­ga­lows or flats.

Pri­vate day beaches

Pri­vate day beaches can take the form of a sim­ple beach with pri­vate ac­cess or can in­clude some fa­cil­i­ties such as sunbeds, pri­vate jacuzzis, swim­ming pools or restau­rants. They usu­ally re­quire min­i­mal in­vest­ment com­pared to re­sorts or gated com­mu­ni­ties, with the client pay­ing a daily en­trance fee be­tween USD 3-50, which is the main source of rev­enue for the own­ers.

Beaches are, by def­i­ni­tion, sea­sonal and op­er­ate for an av­er­age of 20 weeks per year. Own­ers there­fore try to di­ver­sify their sources of rev­enue and of­ten rent out their space at night for pri­vate events, such as the­matic re­cep­tions or wed­dings. These can rep­re­sent up to 20 per­cent of yearly rev­enues.

The vast ma­jor­ity of pri­vate day beaches are lo­cated be­tween Ba­troun and Saïda, although new projects have re­cently emerged to the north in En­feh and to the south around Tyre. So far, all of these pri­vate day beaches are homegrown and lo­cally man­aged con­cepts.

In the cur­rent con­text, the ad­van­tage of pri­vate day beaches is that they rely on a lo­cal clien­tele made up of Le­banese and ex­pa­tri­ates who are very loyal, as ev­i­denced by the fact that over the last five years, there have been no clo­sures of sig­nif­i­cance in this seg­ment. On the con­trary, beaches keep open­ing, as wit­nessed with the re­launch of La Siesta in Khaldé.

To sur­vive in a highly-com­pet­i­tive en­vi­ron­ment, pri­vate day beaches aim to spe­cial­ize and tar­get spe­cific cus­tomers. Some bet on luxury, like Orchid, which in­vested USD 2 mil­lion in a new lo­ca­tion in Ba­troun in 2015. Oth­ers, like Lazy B in Jiyeh, set out to iden­tify it­self as a re­lax­ation des­ti­na­tion, with large gar­dens, well­be­ing ac­tiv­i­ties and no mu­sic. An­other grow­ing trend is the ‘beach party’ con­cept, with places such as Iris beach in Damour or Loco Beach in Ba­troun, which host DJS day and night.

Beach re­sorts: heav­ily de­pen­dent on tourism

With tourist num­bers re­main­ing low due to the chronic in­sta­bil­ity that con­tin­ues to plague Le­banon, the num­ber of large beach re­sorts is also small, to­tal­ing just 10. In ad­di­tion, land prices on the seafront are ex­tremely high, prompt­ing most in­vestors to de­velop ho­tels else­where. Ac­cord­ing to the Syn­di­cate of Beach Own­ers, the cost of a square me­ter of land on the seafront near the cap­i­tal city can reach USD 5000.

For this rea­son, some in­vestors opt to play safe and part­ner with in­ter­na­tional or re­gional op­er­a­tors to boost their chances of at­tract­ing a wider clien­tele. Both Möven­pick Ho­tel in Beirut and Golden Tulip in Jiyeh have adopted this strat­egy.

Given that the sea is only ac­ces­si­ble from May to Oc­to­ber, such ho­tels of­fer much more than just a room and a beach, with other ser­vices al­low­ing prop­er­ties to op­er­ate out of sea­son and be sus­tain­able long term. These in­clude a wide range of fa­cil­i­ties, such as restau­rants, ban­quet halls, meet­ing rooms and spas to at­tract both cor­po­rate and leisure clien­tele.

The lat­est ad­di­tion to Le­banon’s beach re­sorts is the Kempin­ski Sum­mer­land Ho­tel and Re­sort, which opened in Septem­ber 2016. This iconic ho­tel, built in 1978 by the Saab fam­ily, un­der­went a com­plete re­vamp and change of own­er­ship. Lo­cated on a 75,000 sq-me­ter plot of land south of Beirut, the re­sort in­cludes a luxury ho­tel of 153 rooms, 73 pri­vate apart­ments and 583 beach huts. The com­plex also in­cludes a ma­rina, two swim­ming pools, two spas, three restau­rants and a 300-me­ter­long sandy beach for a to­tal in­vest­ment of USD 500 mil­lion.

How­ever, beach re­sorts have been hit hard by the tourism cri­sis. Just 1.6 mil­lion tourists vis­ited Le­banon in 2016, down from 2.2 mil­lion in 2010. Ar­rivals from the Gulf have

fallen sig­nif­i­cantly, weigh­ing heav­ily on the oc­cu­pancy of Le­banon’s ho­tels. This seg­ment is known for its high spend­ing lev­els, with the av­er­age pur­chas­ing power of Gulf tourists es­ti­mated to be five times higher than that of Le­banese cus­tomers. On the plus side, there is a glimpse of hope that things will pick up again in 2017.

The Ra­madan sched­ule has also had a knock-on ef­fect on busi­ness. For the past five years, the fast­ing pe­riod has fallen dur­ing sum­mer, which has slowed down tourism ac­tiv­ity. Ac­cord­ing to the Syn­di­cate of Beach Own­ers, the month of Ra­madan pro­duces a de­crease in turnover of 60 per­cent.

Beach gated com­mu­ni­ties: a safe bet

No mat­ter how hard the cri­sis hits, buy­ing or rent­ing a bun­ga­low or a flat on the seafront re­mains a must for Le­banese and ex­pa­tri­ate in­vestors. Gated com­mu­ni­ties are res­i­den­tial or mixe­duse real es­tate projects, char­ac­ter­ized by a closed perime­ter of walls, fences and con­trolled en­trances that only ten­ants and their in­vi­tees can ac­cess. The added value of such projects lies in the sense of se­cu­rity and ex­clu­siv­ity that ten­ants feel. In the case of gated com­mu­ni­ties lo­cated at the sea­side, the project also in­cludes pri­vate beach ac­cess, pools and some­times a ma­rina.

Beach gated com­mu­ni­ties were mostly de­vel­oped dur­ing the Le­banese Civil War. The ma­jor­ity of them are lo­cated on the north­ern coast of Beirut around Jounieh, an area that re­mained rel­a­tively calm when the rest of the coun­try was caught up in chronic, episodic vi­o­lence. The north of Le­banon has al­ways been an ex­cep­tion, with beach gated com­mu­ni­ties that date back to the 1980s, such as Las Sali­nas in En­feh, Miramar Re­sort Ho­tel & Spa and Palma Beach Re­sort in Tripoli.

From a cur­rent real es­tate per­spec­tive, beach gated com­mu­ni­ties help own­ers to de­velop their land by di­vid­ing them into sev­eral smaller plots, which are eas­ier to sell than larger ones. Key re­cent projects, such as Kye Re­sort in Tabarja, suc­cess­fully sold a good num­ber of units be­cause they kept them small and of­fered them at ‘af­ford­able’ prices.

Beach con­cepts also suc­cess­ful in the Gulf

Beach con­cepts are also a fast-grow­ing trend in Gulf coun­tries. How­ever, the ma­jor­ity of these beaches are found within ho­tels across these des­ti­na­tions, since the tar­get clien­tele is mostly for­eign tourists. The UAE and Dubai, in par­tic­u­lar, is the re­gional cham­pion, show­cas­ing plenty of beach re­sorts, in­clud­ing At­lantis the Palm, The Ritz Carl­ton, the Four Sea­sons and the Westin.

To the south, Oman is also carv­ing a niche as a des­ti­na­tion for beach tourism, with high-end re­sorts like Six Senses in Zighy Bay, Shangri La and Chedi Ho­tel & Spa in Muscat.

In some other Gulf coun­tries, beach con­cepts ex­ist, but are kept se­cluded due to cul­tural re­stric­tions. Saudi Ara­bia, for ex­am­ple, is home to a num­ber of pri­vate beaches, like Sal­hiyeh in Ob­hur to the north of Jed­dah. How­ever, these fa­cil­i­ties tar­get mainly ex­pa­tri­ates.

Kempin­ski Sum­mer­land Ho­tel & Re­sort - Le­banon

At­lantis, The Palm - UAE

Iris Beach Club - Le­banon

Six Senses in Zighy Bay - Oman

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