The number of Arab visitors, mostly from oil-rich Gulf countries who make up the bulk of tourists to the country, fell by more than 26% in the first six months of 2005 compared to the same period in 2004, Tourism Ministry figures show.
 
Gulf visitors spend an average of $6000-$8000 per stay, excluding the cost of plane tickets and hotels, and also invest in real estate and banking.

"There has not been a rush in cancellations, just as there has not been a rush in bookings also. But one or two more such [security] incidents and it will be over. For now, we are not giving up," said Pierre Achkar, president of the Lebanese Hotel Owners Association.

Lebanon has been gripped by several deadly bomb attacks since the assassination of former prime minister Rafiq al-Hariri in a huge car bomb along Beirut's seafront in February.

The killing plunged Lebanon into its worst crisis since the end of the 1975-1990 civil war and led to the withdrawal of Syria's troops under popular and international pressure.

Key revenue source

Tourism is a key source of revenue for tiny Lebanon, which is grappling with a $36-billion public debt almost twice the size of the country's gross domestic product.

Lebanon has been gripped by
blasts since al-Hariri's (R) killing

The formation of a new government by Prime Minister-designate Fouad Siniora, member of an anti-Syria coalition which swept the country's first elections without Syrian troop presence, has been marred by political bickering.

Achkar, who is also the chairman of the top-end Monroe hotel in Beirut, said the new government must quickly establish security to rescue what is left of the summer tourist season.

"The most important thing is to have a government that establishes the political stability needed to help revive the sector," he said.

He said that although recent deadly attacks - Defence Minister Elias al-Murr survived a car bomb last week - had cut hotel occupancy rates, the sector could still pull off a comeback in high-season August.

Dwindling numbers

In Beirut's posh downtown, which has undergone a multibillion dollar renovation since the civil war ended, tourists dine and shop at fancy restaurants and boutiques.
 
But their numbers have dwindled dramatically since last year, when crowded restaurants stayed open until well past midnight and hotels were fully booked.

In 2004, the sector boasted a record nearly 1.3 million foreign tourists for a country with a population of four million.

"This year it's much different. Business is slow. We had expected the tourists to show up by May. It's now July and almost 80% of them haven't showed up," said Shawkat, an Egyptian waiter who works at a popular downtown restaurant.