Lebanon News

Mar Mikhael's pubs struggle under lockdown

(The Daily Star/Mohammed Azakir)

BEIRUT: For several years, Mar Mikhael has been a shining star in Beirut’s nightlife scene with crowds of patrons streaming out onto the sidewalks of Armenia Street on any given weekend.

Today the area is uncharacteristically empty with the cries of patrons and the clinks of glasses all but a distant memory, a consequence of the lockdown measures imposed to prevent the spread of coronavirus.

As expected, with the closures come the financial pressures and the venues that relied on their customers’ business are forced to juggle compromised revenues with high rents and obligations to their staff.

One example is Bar 35, which on March 7 was having a typically busy Saturday night with over a hundred people eating and drinking. But at a little after midnight officials from the Tourism Ministry arrived and told the bar’s owner Samer Nakhoul that he had just 15 minutes to close the venue.

For Nakhoul and other bar owners in Mar Mikhael, that day was the start of a difficult period, with venues facing a partial reduction or complete halt in revenue while trying to manage high rents and the wages of staff and families that rely on their incomes from working in Mar Mikhael.

For others like Nareg Bedoyan, co-owner of Grayscale, a cocktail bar in the area, it proved the killing stroke. The venue had already been struggling as Lebanon’s economic crisis brought about both a decline in the number of customers and how much they were able to spend.

Moreover, the steady devaluation of the Lebanese pound in recent months made imports more prohibitive, exacerbating Grayscale’s troubles. Coupled with the coronavirus measures, it all proved too much and Bedoyan was forced to close the bar at the end of March.

In fact, of the five bar owners who spoke to The Daily Star, three reported a 30-40 percent decline in customer spending in the months preceding the lockdown, while two claimed a minimal change in customer spending.

Yet, despite the pressures, three of the four bar owners still planning on re-opening claimed they had retained the majority or all of their staff, albeit on reduced salaries of 60 percent of their normal wages.

“I’m responsible for 15 families,” Nakhoul told The Daily Star.

To help cover the cost of employees, one strategy adopted by a number of bars to sustain their businesses has been the takeaway food.

For example, Karine Khoury, co-owner of holding company Partner in Disruptive Entertainment which owns two bars and three restaurants in Mar Mikhael, the restaurants delivering food are helping her keep the majority of her staff on, and while the company’s suffering financially it won’t be fatal and she’s confident that they will be able to re-open all of their bars and restaurants once the lockdown ends.

But while paying staff with reduced or zero income during the lockdown presents a major challenge for bar owners, rent is also a central issue.

Bar owners told The Daily Star that rent in Mar Mikhael is very high, with smaller bars off Armenia street generally paying $2,500 a month and prices sharply rising for larger premises and locations on Armenia Street, with one owner’s medium-sized bar paying as much as $6,000 a month.

Furthermore, with bar owners having paid up to six months in advance, many have already taken significant losses during the lockdown.

“I don’t know what the right solution is,” Tro Djerejian, the owner of London Bar, told The Daily Star. “Technically at the moment he [the landlord] is taking something for nothing,”

But Djerejian and other owners are hoping to recoup some of their losses by negotiating reductions in their upcoming rent payments. Despite their landlords not being legally obligated, the bar owners that spoke to The Daily Star generally felt fairly confident that deals with their respective landlords could be reached.

One factor working in London Bar’s favor is the fact that it has been around for several years. Unlike Grayscale, which opened in February 2019 and enjoyed a successful opening period before the slowdown in business in October, London Bar, which does not benefit from food takeaway sales, has been open since 2015 and over the years has managed to build a war chest with which to weather the storm with its vital savings.

But even as Mar Mikhael’s bars use every trick in the book to stay afloat amid uncertainty of the lockdown’s duration, the future of Mar Mikhael’s nightlife is dependent on whether people can afford to return to the area once restrictions are lifted.

“During these recent hardships in Lebanon, Mar Mikhael was the only area that was alive, with people from all walks of life meeting and at the end of the day, it’s been a blessing,” Khoury told The Daily Star, describing why she was hopeful that Mar Mikhael would bounce back once the lockdown ended.

But she and the other bar owners did share concerns regarding the impact of the economic situation on their regular customers. And perhaps more importantly, they feared coronavirus’ impact on social norms, with people potentially being wary of going to busy bars, which would subsequently have to reduce their capacity.

Ultimately the duration of the lockdown, the wider economic impact and the effect on social norms of coronavirus remain to be seen, but all four bars that have so far managed to survive this period remained confident that their establishments will re-open as soon as possible.

 

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