Summer 2024: A look into Lebanon's seasonal dynamics from Fattal Group

As summer arrives, Lebanon welcomes a wave of expats and visitors, bringing a shift in consumption habits, particularly in the on-trade channels.

Typically, the summer heat reduces chocolate consumption. On the other hand, summer is the peak season?for alcohol sales, influenced largely by the influx of tourists and expats. During this time, on-trade channels such as restaurants, bars, and nightclubs see increased activity and beverage consumption. Furthermore, demand for personal care products rises during the summer. Because products like soap, hand wash, shower gel, and deodorant are used more frequently, they need to be replenished more quickly within the same?month. The rise in guesthouses and Airbnbs also greatly increases our sales of cleaning tools and detergents, especially in popular destinations like Batroun and Faraya, which attract visitors with substantial purchasing power.

Despite expectations?of more than a million visitors, this summer has not yet lived up to expectations. Jean Abboud, head of the Syndicate of Travel and Tourism Office Owners, shared that despite Beirut Airport's high activity, with 85 to 90 flights daily and over 420,000 arrivals in June 2024 (almost the same levels as 2023), current conflicts in Gaza and Southern Lebanon continue to deter foreign visitors, as many of them cancel their flights out of fear due to safety concerns.

Toni Boustany (EL) , Business Manager of Food & Beverage at Fattal, further highlighted the situation with hotel occupancy rates, which are only between 25% and 30% at leading hotels this summer. He noted, "Honestly, the summer has not kicked off yet. It’s not that it kicked off slow, no, it hasn’t kicked off yet - but we can feel a slightly positive change for restaurants and nightlife venues since mid-July.”

According to Kamil Stephan, Channel Manager at Food & Beverage, there was a 20–25% drop in restaurant activity in Batroun in June compared to last year. Part of the reason for this drop is due to returning expats preferring to stay with family rather than bookin g restaurants, which limits their impact on local spending. Consequently, the anticipated peaks in consumption have not materialized as expected.

In addition, key trends from Beirut Duty Free (BDF) show significant shifts in consumer behavior this summer?with shifting?travel patterns. Although BDF has seen a change in consumer expenditure toward premium-level products, the average spending per person has dropped from $98 to $57. High rental prices for retail spaces have affected profitability, creating internal competition among products. However, continued investments in advertising and promotion for liquor, tobacco, and cosmetics, are driving growth. For instance, BDF’s sales distribution shows that tobacco and cigars lead at 32%, followed by liquor at 20%, fragrances and cosmetics at 17%, confectionery at 15%, electronics at 11%, and watches at 4%. “Chateau Kefraya’s strategic activations have also enhanced visibility at departure areas, despite high rental costs,” explains George George , Travel Retail Manager FMCG.

To conclude, the summer season brings about a dynamic shift in Lebanon’s consumption habits, influenced by the arrival of tourists and expats. The market is to be resilient and adaptable, despite challenges like flight cancellations and regional conflicts reducing expectations.? We will keep monitoring consumption patterns and make strategic adjustments, and hope that consumption levels will gradually increase as the?summer season progresses.