The good prospects of the tourism industry have benefited the investment climate in the hospitality sector and more hotel deals are expected to be announced in the coming years, HVS said.

It said that around 2,000 new hotel rooms will open starting this year and onwards; estimating that the bulk of rooms will open in 2013 when real-estate projects currently underway complete their way to fruition.

HVS said that the economic activity in Lebanon last year was relatively isolated from the global financial crisis which took its toll on most world economies. This has impacted positively on the hotel industry.

“Existing hotels reaped benefits and showed remarkable performance in consequence, and hotels still in the pipelines doubled their efforts to open their businesses. Many new hoteliers were also looking for investment opportunities,” said HVS.

The number of visitors peaked to 1.9 million tourists, and occupancy rates at the luxury hotels posted double digit growth as a result. Occupancy levels reached 70 percent in 2009, up 17 percent from 2008, and revenue per available room (RevPAR) reached $220, up 60 percent from a year earlier.

Mid-market hotels have also seen their occupancy rates growing 40 percent from 2008 to $156 in 2009, said HVS.

Still, the report listed challenges that should be tackled to stimulate further growth in the tourism and hotel industries.

It said there is a need to develop the current infrastructure available including roads, the airport and business and tourist facilities that cannot collectively cope to the growing number of tourists.

Expanding the airport is fundamental, says HVS. The Airport can handle up to six million passengers, and it hosted nearly five million persons in 2009; this number is expected to grow further. The airport can handle up to 16 million passengers when the government completes the airport expansion plan, the report said.

HVS said that the current supply of hotels is insufficient compared to the growing number of tourists. Beirut currently boast “just” 3,000 hotel rooms," it said, signaling the need to build new hotels to cater to the growing demand.

In addition to the limited supply, HVS also mentioned the land scarce factor, and stressed the need to maintain political stability which is integral for tourism.