Lebanon aims to win back Gulf tourists and investors, but is it enough to save the economy?

With its sun-soaked beaches, pine-covered mountains and buzzing summer nightlife, Lebanon is hoping to once again become the playground of wealthy Gulf tourists. After years of strained relations, Beirut is making concerted efforts to reset its ties with the Gulf – a region long seen as both a political ally and economic lifeline.

Since taking office in January, President Joseph Aoun has placed rebuilding Lebanon’s relationship with the Gulf countries at the centre of his foreign policy agenda. The former army chief, elected after more than two years of presidential vacuum, wasted no time in launching a diplomatic charm offensive. Mr Aoun has so far visited the UAE, Saudi Arabia, Qatar and Kuwait, in an effort to re-establish Lebanon as an open destination for tourists and investors.

Gulf states have historically played a major role in rebuilding Lebanon, including after the 1975–1990 civil war and the 2006 Israel-Hezbollah conflict. Gulf tourists and investors − particularly from Saudi Arabia, Kuwait and the UAE − significantly boosted Lebanon’s economy for decades by driving its tourism, real estate and hospitality sectors, especially in Beirut and mountain resort areas.

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However, in recent years, Lebanon’s relations with its Gulf neighbours began to sour due to Iran’s growing influence over Lebanese affairs. This was primarily through its backing of the Lebanese armed group Hezbollah, which held significant sway over the country’s political and military landscape.

This dynamic has shifted following a year-long war between Hezbollah and Israel that ended last November. Israel’s military campaign destroyed much of Hezbollah’s infrastructure, eliminated the group’s leader and top commanders and infiltrated its security network.

Now, Lebanon seeks to revive its economy, which has been mired in crisis since 2019. The national currency has collapsed, the banking sector is in disarray and basic public services have all but crumbled. The war between Israel and Hezbollah only worsened conditions, leaving much of southern Lebanon and Beirut’s southern suburbs in ruins. The World Bank estimated recovery and reconstruction needs at $11 billion.

Lifting travel bans

The UAE and Kuwait have lifted years-long travel bans on Lebanon after President Aoun’s recent visits, opening the door for their citizens to return to the country.

“Lebanon is moving in the right direction, getting back to the Arab fold – and that’s a Lebanese demand before anything else,” Fouad Dandan, Lebanon’s ambassador to the UAE, told The National.

“Emiratis love Lebanon. They don’t go there just for tourism. Many have properties in the country, and some may even invest in it – which would create a boost that is not only seasonal and would help the economy,” he said.

Lebanon is also seeking to benefit from the UAE’s expertise in key sectors, including security and renewable energy, added Mr Dandan. Emirati technical teams have already visited Beirut to explore co-operation and knowledge transfer. “We have a golden opportunity,” he said.

All eyes are now on Saudi Arabia to see whether it will follow suit. But Riyadh remains cautious, and a key sticking point is security, according to sources.

Saudi Arabia has banned its citizens from travelling to Lebanon since 2021 because of security concerns. The kingdom was Lebanon’s top destination for agricultural exports in 2019, accounting for 22.1 per cent of total shipments, according to a Lebanese government report published in 2020. However, Riyadh suspended imports of Lebanese fruits and vegetables in April 2021, citing drug-smuggling concerns and accusing Beirut of failing to take action.

Lebanon’s security forces say they are stepping up efforts to protect key sites, especially Beirut’s international airport and tourist hotspots.

“Preparations are under way to welcome tourists, though the state is working with a limited budget. Efforts have been made to improve visitors' experience: the road from the airport to Beirut has been repaired, and political banners and posters were removed months ago,” a senior security official involved in the operations told The National.

“What’s new is the increased police presence near airport routes, especially at night. Police staffing has recently expanded to accommodate these new duties, and additional checkpoints are now active, with clear instructions to search suspicious vehicles and fine violators,” the source added.

“Overall, the security situation is stable. The main concern remains the potential for Israel to disrupt the atmosphere, but internally, the focus is firmly on ensuring safety for both residents and visitors.”

Despite a ceasefire agreed in November between Israel and Hezbollah, the Israeli military continues to carry out strikes in Lebanon. Last week, just before Eid Al Adha, at least 10 strikes hit Beirut's southern suburbs – a sprawling area known as Dahiyeh. It was the fourth time that Dahiyeh has been bombed since the November truce.

Israel also continues to bomb southern Lebanon almost daily and maintains control over five military posts along the southern border.

The ceasefire says Hezbollah must pull all military equipment and fighters out of southern Lebanon and says all non-state militant groups must be disarmed across the country. Lebanon remains under international pressure to reassert full state sovereignty. President Aoun has repeatedly said the decision to centralise arms under state authority has been taken, but says this can only be achieved through dialogue rather than force.

Promising summer amid challenges

Many in Lebanon are hopeful for a booming summer season.

“Eid Al Adha holiday gives a glimpse of how this summer will look,” Jean Abboud, president of the Association of Travel and Tourist Agents in Lebanon, told The National. “We’re seeing new nationalities this year: Emiratis, Kuwaitis and Qataris. Gulf tourists tend to spend more time and money in the country.”

“In May, airport traffic rose 11 per cent compared to the same period last year. The momentum is encouraging,” said Mr Abboud.

But analysts caution that this is not enough to lift the country out of its deep economic crisis.

“Tourism accounts for 20 per cent of GDP, and Gulf tourists generate 50 per cent of tourism revenue. While the rebound in Gulf tourism and renewed investment are essential catalysts, they alone cannot secure Lebanon’s full recovery,” said Lebanese economist Walid Abousleiman.

“The scale of Lebanon’s financial crisis and the depth of required reforms mean that international assistance potentially including an IMF programme remains necessary to restore fiscal and monetary stability, restructure debt and rebuild confidence in the banking sector.”

Since the 2019 crisis, which saw the Lebanese currency lose over 90 per cent of its value and bank deposits decimated, with losses estimated at more than $70 billion, Lebanon has failed to implement most of the IMF’s demanded reforms.

Economy Minister Amer Bisat told The National last month that the country faces deep-rooted challenges across multiple sectors − including banking, electricity, production costs, infrastructure and governance. “I don’t think that small and quick steps will bring back the confidence of investors. What will bring it back is when investors see we are addressing these core issues,” said the minister.

Mr Abousleiman noted that "Gulf tourists bring vital foreign currency and support key sectors but cannot alone restore Lebanon’s economy to pre-crisis levels".

“Lebanon’s path to recovery is a marathon, not a sprint. Gulf tourism and investment are promising first steps, but real, lasting change requires comprehensive reforms and international support,” he added.

Mohamad Ali Harisi and Jamie Prentis contributed to this report from Abu Dhabi and Beirut, respectively