BEIRUT: The smoking ban, weak tourism season and the tense situation in the country are prompting some restaurants to either close down or lay off most of their staff to cut growing losses, owners of eateries and hotels said Thursday.

“The situation is really terrible. The volume of business has dropped by more than 50 percent and the profit margins are quickly diminishing,” Tony al-Rami, an owner of a chain of restaurants, told The Daily Star.

Rami was one of several restaurant owners who said they were hard hit by the ban on smoking in public places as well as the deteriorating conditions in the country.

Most restaurants in Beirut and Mount Lebanon face difficulties in paying their staff as well as covering their electricity bills, forcing some of them to reduce working hours or dismiss employees.

“In 2010, the gross revenues from the tourism sector were close to $7 billion,” Rami said. “But the proceeds of all tourism sectors up to July of this year did not even exceed $4 billion. This is a very bad sign and if things continue like this many restaurants will be out of business in five months at the most.”

A source told The Daily Star that the glamorous Buddha Bar is shutting permanently and will lay off 200 staff members due to the weak tourism season and poor turnover.

Paul Aryss, the president of Restaurant Owners Association, said that the future of the restaurant business is bleak if the situation continues.

“We haven’t seen such a low volume of business in the restaurant industry for more than 30 years. We did not experience such case even during the wars,” Aryss said.

Some restaurants, as is the case for Outar restaurant in Monroe Hotel, decided to shut down their business as a result of the weak tourism season and the ban on smoking in public places.

A source speaking on condition of anonymity said the management of Outwar restaurant informed Monroe hotel that they were no longer able to pay the rent and for this reason the restaurant will be closed soon.

He added that in the first quarter of this year the Outar restaurant sent the Finance Ministry value added tax receipts of LL75 million, the second quarter these receipts fell to less than LL40 million, and in the third quarter these receipts reached only LL1 million.

“A restaurant which has only LL1 million of VAT receipts in three months ... means that this outlet had an extremely low season. They hardly had any customers in the third quarter,” the source said.

All of the restaurant staff interviewed by The Daily Star said they would soon be forced to take drastic measures.

They added that some banks had agreed to give them a grace period to settle their debts, but no one can guarantee if these lenders will continue to show more flexibility in the future.

Lebanon’s super nightclubs, especially those located in the Maamelten area north of Beirut, have also seen their business fall by more than 50 percent this summer.

“It is very rare to find a customer who will spend lavishly in the nightclubs. The owners will also be compelled to reduce the size of their operations,” one restaurant owner said.