Staying the course in Beirut

When Saab drew up plans for his hotel in the early 1970s, Beirut was a tranquil place where savvy European and American businessmen came to work out deals with oil-rich sheikhs and international jet-setters came to bask in the brilliant Mediterranean sun. Saab had amassed a large fortune during 30 years in real estate, construction, and finance in Saudi Arabia—and he was willing to sink $25 million into a luxurious seaside resort catering to the well-heeled visitors who then flocked to the city.

The outbreak of the Lebanese civil war in 1975 put an end to much of the tourist trade—and presented Raja Saab and his brother Khalid, 39, with a tough business decision. They had already sunk millions into the Summerland project, and so they decided to proceed with the construction and hope that wealthy Beirut residents were looking for a place to escape their city’s dreary chaos. Summerland, as the hotel is known, is set into the side of a small hill that slopes down to the sea. Once a customer has made it down the driveway to the main entrance, the Beirut of armed soldiers and shattered buildings is out of sight. The wings of the lSI-room hotel act as a pair of blinders, leaving only the open vista of Summerland’s pool and the Mediterranean beyond. Soon after its doors opened in 1978, Summerland had become the place in Beirut to escape the war. Thousands of local residents would gather for lavish poolside buffets on Sunday afternoons.

The local clientele, in fact, became a major source of capital for Summerland. Once Saab and his fellow shareholders realized that their fortunes would depend on the regular patronage of wealthy Beirut residents, they founded the “Club 500″and recouped about one-fifth of the original construction costs. The 420 members of the club each purchased preferred shares in the Societe Generale d’Entreprise Touristique, the holding company—70% owned by Raja Saab—that owns Summerland. Club members can use a changing room on Summerland’s premises and have access to the resort’s facilities at a discount.

Despite the Saab brothers’ efforts, Summerland had piled up about $2 million in losses by the end of 1981. But those financial setbacks seemed insignificant when, a few months later, the war finally intruded on the Saabs’ idylic seaside oasis. The trouble began in early July 1982 when the hotel was struck by stray shells aimed at a Syrian antiaircraft battery located nearby. Then, on a Sunday in late July, Israeli gunships pounded round after round directly into the resort. The shelling continued intermittently throughout the summer, and by the time the firing ended in late August, Summerland had been hit by over 300 projectiles.

Alain Nogues—Sygma/Getty Images

Israeli military sources contend that Summerland was used as an observation point by “terrorist organizations” of Palestinians or Syrians, who radioed information on Israeli ship movements to gun positions in the area. The Israelis also claim that their troops were fired on by machine guns from the roof. Raja Saab, who is a member of the Druse Islamic sect, denies that Summerland was used for military activity during the war, and many reporters who were on the scene at the time support his denial.

After the devastation, Saab vowed to have his hotel’s public rooms back in operation by New Year’s Eve and quickly launched a $10-million reconstruction program. He was able to collect nearly $2.8 million through a government war-risk insurance program, and he raised another $3 million by selling 100 more memberships in the Club 500. The remaining reconstruction funds came from Raja Saab’s own pocket. Not content merely to restore the hotel to its previous state, he spent $1.75 million, on top of the $10 million, to add a new swimming pool, a pizzeria, a video arcade, a room for bridge players, and a gourmet food shop.

Because Syrian workers, a major labor pool in Beirut, refused to cross Israeli lines to reach the Summerland site, manpower for the reconstruction was scarce. Saab, worried about keeping his staff intact during the shutdown, solved both problems by offering his employees cut-rate wages to work as laborers on the construction site—with a guarantee that they would get their old jobs back once Summerland reopened. Chefs, receptionists, and waiters hauled bricks and mixed cement to get the job done, and a crowd of revelers swarmed to Summerland’s grand reopening last December.

This year the Saabs were enjoying their best summer season ever—until disaster struck again one night in late July. Christian East Beirut had been hit by rockets that morning, and fighting between Christian and Druse militiamen was beginning to heat up in the hills above the city. Shortly after 11 P.M., gunmen shot and killed two security guards at the hotel entrance and then rolled a car loaded with 264 pounds of TNT down the sloping driveway toward the front door. The car smashed into the entrance of an underground parking garage—and erupted in an explosion heard miles away. Four hotel employees were killed in the blast and 16other people, most of them guests, were wounded. “We never expected Summerland to be hit,” says Khalid Saab.” It was always neutral ground, where people of all sects and ideologies could meet for pleasure.” Because the Saabs are Druse, local authorities suspect that the gunmen were Christian militiamen.

The bomb hit at the nerve center of the hotel’s electrical and water systems, causing about $2.7 million of damage. Much of the lighting and decoration of the public rooms had to be restored for a second time. Once again the Saabs launched a crash reconstruction program. Public rooms were reopened about a month after the blast. At the end of August, Summerland was hit by another shell. Though that damage was repaired in a day, Beirut’s current turmoil has kept the hotel’s doors closed—along with many other of the city’s restaurants and nightclubs. But the Saabs are still hopeful. “We are not going to give up,” says Khalid.

Not all of Beirut’s business leaders are demonstrating that kind of perseverance these days, but Raja Saab claims that a hardy new strain of capitalist has sprung up in Lebanon since the war broke out. “These people have developed strong roots through many hardships,” he says.

Right now the Saabs are too busy planning new projects to fret about past losses. They have bought land for a shopping and restaurant complex near the center of town and are trying to put together a company to finance middle-class housing in the city. “Our acts are purely acts of faith,” says Khalid. “We devoutly believe in the future of this country.”