Suddenly, the scene looked as though the lights had gone out in a hall once bustling with guests. No music, no applause, just a door quietly closing. That, in essence, was how the Al Habtoor Group’s exit from Lebanon looked like.
This was not a passing economic headline to be folded away among loss figures. It was closer to the final curtain on one of the longest chapters of Gulf investment in a country that was once considered the capital of tourism and business in the Middle East. Twenty-five years of luxury hotels, conference halls, and commercial complexes ended with a brief statement – and questions heavier than the numbers themselves: Why now? And what does this exit say about Lebanon?
On January 26, the Al Habtoor Group announced in a statement that its investments in Lebanon had incurred losses exceeding $1.7 billion, citing banking restrictions, the inability to access its deposited funds, and what it described as the state’s failure to provide a safe and stable environment for investment.
Just two days later, a second statement was even more decisive: operations in Lebanon would cease, the ongoing drain of expenditures would be halted, all employees would be laid off, and appropriate legal measures would be taken in accordance with international agreements and relevant legal frameworks.
The Beginning of the Story
Since the early 2000s, the Al Habtoor Group invested in hospitality, retail, entertainment, and real estate. Two hotels continued operating despite wars. Other projects withstood political and security crises, and the group’s presence never disappeared, even in the darkest times. But that confidence gradually eroded, until it finally collapsed in January with the decision to withdraw completely.
The story began in 2001 with the opening of the Metropolitan Palace Beirut hotel in Sin el-Fil. Four years later, the Habtoor Grand Beirut was launched as a massive complex including a conference center and recreational and commercial facilities. The two projects became landmarks in Lebanese tourism and a symbol of long-term Emirati investment.
According to political researcher Nidal Al-Sabaa, the Al Habtoor Group’s entry into Lebanon dates back even earlier, coinciding with the end of the civil war and the start of the reconstruction drive under the late Prime Minister Rafik Hariri. Speaking to Alhurra, Al-Sabaa said the group’s investments at the time amounted to hundreds of millions of dollars and were driven by a personal motivation on the part of founder and chairman Khalaf Al Habtoor—stemming from his affection for Lebanon and a desire to support its people.
The Irony of Return: Before Withdrawal
Ironically, the withdrawal decision came only months after a scene that appeared to be its complete opposite. In September, plans were announced to reopen the Metropolitan Beirut hotel, following the reopening of the Habtoor Grand, after Khalaf Al Habtoor made his first visit to Beirut in 16 years. During that visit, he met with the president and prime minister and spoke of business leaders’ readiness to return to investing in Lebanon following government measures.
Yet this was not the first time such a withdrawal had been contemplated. In January 2025, Al Habtoor announced his intention to sell all his properties and investments in Lebanon, before later revealing in April plans to dismantle the Metropolitan Beirut hotel and relocate it outside the country.
Al-Sabaa notes that despite the losses, Al Habtoor “continued investing and did not leave, taking into account the political and security conditions and out of concern for the hundreds of Lebanese families who depend on his group’s institutions.” He adds that Al Habtoor’s recent visit gave the impression that Gulf investments might return – until that hope collided with state procrastination, failure to address the issue of frozen funds, and media and political campaigns targeting him and his group without any official or judicial protection.
Al-Sabaa argues that “the state and judiciary’s failure to protect an investor of this scale sent an extremely negative message, especially given the dismissal of around 500 employees who could have been protected through official intervention.”
Frozen Funds and Broken Trust
What was built on hope collapsed under the weight of financial meltdown, lack of reforms, security tensions, and the absence of guarantees. The 2019 crisis and the freezing of investors’ funds in banks, according to Al-Sabaa, represented “a major shock for Al Habtoor and a wide segment of Arab business leaders.”
Since then, Lebanon has been living through one of its harshest banking crises: frozen deposits, restricted withdrawals, and an almost complete collapse of trust in the financial sector – a reality that spared neither small depositors nor major investors.
In February 2023, Al Habtoor launched a scathing attack on Lebanese banks, describing the continued freezing of depositors’ funds as “open piracy against people’s livelihoods,” and announcing the start of a legal battle to recover the money. Despite this, two months later he declared his intention to reopen retail space in his tourism project in Sin el-Fil, Greater Beirut, which includes the two hotels.
In April 2024, he announced plans for a television channel and a studio city in Beirut, promising more than 300 jobs. But just two months later, the project was shelved before seeing the light of day. He attributed the decision to systematic campaigns launched against the group after the announcement, including accusations, defamation, betrayal campaigns, and threats. As a result, the Al Habtoor Group filed criminal and civil complaints in Lebanon and abroad against some of those involved.
Al-Sabaa also points to a grievance with Prime Minister Nawaf Salam, who came to office with a background as an international judge, asking: “How can a prime minister accept the continued theft of Lebanese and Gulf depositors’ funds?” He questions how the targeting of Gulf investment in Lebanon can be tolerated, arguing that it “directly undermines the country’s economic security.”
Economy and Politics in One Track
Al Habtoor has never separated economics from politics in his reading of Lebanon’s situation. He has repeatedly blamed Hezbollah for the country’s deterioration, arguing that it isolates Lebanon from its Arab and international surroundings and that the only solution is its departure.
Al-Sabaa believes the domestic reality – including Hezbollah’s role – “constitutes a key deterrent for investors,” whether due to the recent war with Israel, repeated targeting of Lebanon resulting from the party’s refusal to relinquish its weapons, or the broader political climate and hostile rhetoric toward Gulf investors, all of which push capital to seek safer, more stable environments.
Al Habtoor’s position previously aligned with a wider regional climate, particularly after the UAE’s 2021 decision to withdraw its diplomats from Lebanon and ban its citizens from traveling there, following comments by former Lebanese information minister George Kordahi regarding the war in Yemen.
Although the ban was lifted in May 2025 and the UAE embassy reopened in Lebanon, security concerns persisted. Al Habtoor asked at the time: “How can visitors feel reassured, and families plan vacations, amid repeated scenes of instability?”
“The Barometer of Confidence”
Between 2003 and 2016, the UAE topped Arab direct investments into Lebanon, totaling $7.8 billion – equivalent to 64.8% of all projects. On the eve of the 2019 financial collapse, it accounted for around 11% of total foreign direct investment inflows, concentrated in real estate and commercial sectors, with efforts underway to expand into areas such as energy and free zones.
In this context, Al-Sabaa says Al Habtoor served as a “barometer of confidence for Gulf investors, as one of the most prominent Arab and Gulf economic figures,” stressing that this move “is likely to shut the door on any new Gulf investments in the foreseeable future.”
For his part, Khaled Abu Shakra, a researcher at the Lebanese Institute for Market Studies, goes further, arguing that Lebanon remains “a repellent destination for foreign investment” due to the accumulation of political, security, and economic crises – from the ongoing conflict with Israel to the unresolved Hezbollah issue – undermining stability and driving investors away.
Speaking to Alhurra, Abu Shakra adds that “the absence of a sound banking sector, the complexity of external transfers, and Lebanon’s continued placement on the Financial Action Task Force gray list constitute major obstacles to any economic growth.”
In his view, these factors explain why foreign investment has declined to just one project annually in 2025, compared with hundreds of projects in Gulf countries. He argues that restoring confidence is still possible, but conditional upon “serious banking reform, the passage of the financial gap law, combating the illicit economy, and opening productive sectors and infrastructure to competition and the private sector – as the primary gateway to restoring trust and attracting investment.”
