Al Habtoor Group exits Lebanon and lays off employees after dispute with authorities

UAE’s Al Habtoor Group Exits Lebanon Amid Economic Crisis and Government Dispute

The Dubai-based Al Habtoor Group announced Wednesday it is ceasing all operations in Lebanon and terminating its entire workforce there, escalating a bitter dispute with Lebanese authorities over alleged investment losses totaling $1.7 billion.

The decision comes just two days after the conglomerate declared its intention to pursue legal action against the Lebanese government, marking a significant withdrawal of foreign investment from a country already struggling with economic collapse and war recovery efforts.

“Al Habtoor Group finds itself compelled to make the decision to cease its operations in Lebanon and halt the ongoing financial drain,” the company stated, citing “prolonged instability, ongoing hostile campaigns, public attacks and defamatory actions” directed at its businesses. The group emphasized that the move was necessary to protect its interests and prevent further “unjustified losses.”

Lebanon’s economic crisis, which began in late 2019, has severely impacted both local and foreign businesses operating in the country. The financial meltdown effectively trapped billions of dollars in the banking sector, preventing companies and individuals from accessing their funds. Compounding these difficulties, Lebanon recently emerged from a devastating 14-month conflict between Israel and Hezbollah that ended with a ceasefire in November 2024, with reconstruction costs estimated by the World Bank at approximately $11 billion.

Al Habtoor Group maintains a significant presence in Lebanon, including the Metropolitan Palace Hotel in a Beirut suburb and Habtoor Land, a major theme park east of the capital. Last year, the company reversed plans to dismantle the Metropolitan Palace Hotel, suggesting it was still committed to maintaining its Lebanese investments despite the economic challenges.

When asked about the number of employees affected by the closure, officials at Al Habtoor Group’s Beirut offices referred questions to the company headquarters, which has not yet provided specific figures. This sudden layoff will likely further strain Lebanon’s job market, where unemployment has soared during the economic crisis.

Lebanese government officials were not immediately available to comment on Al Habtoor Group’s decision or the brewing legal dispute.

The UAE-based conglomerate’s withdrawal represents more than just a corporate decision—it signals the continuing deterioration of Lebanon’s business environment and highlights the challenges facing foreign investors in the country. Founded by Khalaf Ahmad Al Habtoor, the group has extensive investments across hospitality, automotive, real estate, education, and publishing sectors throughout the Middle East and beyond.

Foreign direct investment in Lebanon has plummeted since the onset of the economic crisis, with many international companies either scaling back operations or withdrawing entirely. The dispute between Al Habtoor Group and Lebanese authorities may further damage the country’s reputation among potential investors at a time when outside capital is desperately needed for economic recovery.

The economic crisis in Lebanon has seen the local currency lose more than 95% of its value, while inflation has skyrocketed, pushing nearly 80% of the population below the poverty line. The banking sector’s effective collapse has frozen deposits and created a multi-tiered exchange rate system that has complicated business operations.

As Lebanon attempts to rebuild after both economic collapse and war, the departure of major investors like Al Habtoor Group presents yet another obstacle to recovery efforts and highlights the urgent need for economic reforms and improved governance to restore investor confidence.