SKYBAR Lebanon
Chafic El Khazen shares the story of SKYBAR – one of the most famous music clubs in the world which is located directly in Beirut. Mr. El Khazen is currently finishing another project which should complement SKYBAR in the winter time. If you are crazy about SKYBAR, you will feel the same about The One.
Interview with Chafic El Khazen, CEO and Founder of SKYBAR
People are now more hesitant to come to Lebanon. What in your opinion is the outlook for tourism in Lebanon in 2012?
What we are witnessing today is definitely very much linked to the local political scene, the regional turmoil and the global economy. Add to that the global recession, the instability of the Arab countries, and the political tensions between Lebanese parties, and you get a pretty difficult situation. So it is going to be tough for us. But we are combining our strengths, us private companies with the government, who is sparing no effort in promoting Lebanon as much as possible in this unstable and uncertain environment.
But it is in these hard times when you have to believe. I definitely believe. If you lose your beliefs when you are in the middle of a bad situation, it becomes catastrophic for you and your surroundings.
Talking about the government, do you feel that they have been supportive of your efforts recently? 
We know that in the past the government hasn´t been that successful in positioning Lebanon on the international scene be it because of the budget, the complications and the government, political instability. Do you feel that this is changing, that you are working hand in hand with the Lebanese government?
In the past, the government of Lebanon was probably busier doing other things than promoting tourism in Lebanon and they had greater problems and greater challenges. However, after witnessing what we in the private sector have been doing for the country – the money we have been spending and the faith we have been showing in our country – gave a new perspective to the government.
They probably want to help us, echoing throughout the world what we are doing and they have definitely been more cooperative recently. In the past 3 years, they have been helping us on many different levels whether locally in our operations or even trying to get us in the international press and putting us on international platforms.
What are the remaining greatest challenges for the tourism sector in Lebanon? We mentioned regional instability. Yet leaving instability aside, what are the internal challenges and struggles within Lebanon?
In a very rational and theoretical mindset, the main challenge would be long-term stability, but we have not had this for centuries, not for years. But probably if we had stability we would lose all our charm and everything that Lebanon is about. Then it would not be as attractive as it is today, because part of what makes Lebanon attractive is this instability and this chaos, this organized chaos as we call it.
This makes people love life more than anywhere in the world, because you never know what is going to happen the next day. You live in a very lavish way and there are no limits whatsoever. So when you visit from abroad and you experience this kind of behavior and you meet the people, you feel attached to it and it gives you a kind of feeling that you do not feel anywhere else.
In a way SKYBAR put Lebanon back on the international map and it was the Lebanese people who put SKYBAR on the map.
So this instability and this uncertainty make Lebanon a very special place. It is a double-edged sword as on one hand, it pushes away certain people but on the other hand, it brings people who like to experience such things.
Another thing you should know about tourism in Lebanon is that the majority of tourists are expatriates, or first or second generation Lebanese who live abroad. These people will come to Lebanon regardless of what is happening on the local or regional political scene. I am confident that no matter what, unless God forbid, another war erupts, we will attract tourists.
Let´s look closely at the SKYBAR. In the last two years you have been able to attract 250,000 people, this year you are hoping to increase the number by 25% and also the SKYBAR has become sort of an enigma, a success story; an enigma for nightlife in Lebanon – a very stylish, rooftop, entertainment oriented business. So can you speak about SKYBAR, your strategy and the initial idea you had?
The SKYBAR story is a very old story; I will not go through it entirely. First, let us start with the 25% increase. With all what is going on in the region today, attracting 250,000 people this season will be an achievement in itself.
You constantly need hard work, add new ingredients and innovate in order to remain at a certain level. Success is not something that is static, it is very dynamic and the day you are satisfied with your level of success, it will go backwards. The secret of SKYBAR is quite simple: hard work, a lot of dedication and a great initial vision. It was something that was non-existent on the market, to have a big open-air club, and from there it became constant innovation. Every year we add new features, new equipment and new sorts of entertainment.
SKYBAR has some unique features that can’t be found anywhere else, I think you’re in the Guinness Book of World Records for the biggest LED screen.
Not the Guinness Book of records, but definitely the biggest screens in a club.
SKYBAR has live DJs, you don’t just have playbacks.
Yes, we have live DJs. We have many features. SKYBAR was originally more a lounge and a restaurant than a club. It evolved with time and today it is definitely a club. The main distinction between SKYBAR and other clubs is not what you see, it is what you do not see which is the architecture.
We as professionals in this business know what makes a place work or not. The architecture represents 60% of it, because if you are able to channel all the energies of people in a focal point then this is what you call an aura. When you know how to create an aura then you have a place with a spirit. People do not see this, they just feel it.
What people see are definitely the LED screens, which are approximately 300 to 350 square meters. We probably have 12 of the best regional DJs performing on a daily basis at SKYBAR, and we work on getting the best entertainers. We have had so many in the past, from singers to other performers, dancers… So it is many different ingredients put together to have such an outcome.
Let’s talk about finances here a little bit. You had 250,000 people, let’s say the average person spends 30 Euros and you have seven and a half million Euros per year, and you have 200 employees, you’re attracting events, big DJs, big names in the industry, how do you make this work?
Of course you have to spend a lot of resources on advertising, does it take care of itself or are you constantly striving to make this SKYBAR concept work?
We definitely generate good revenues. But then when you break them down and you go to the end results you realize we spend a lot of money on all the features that I talked about: technology, DJs, special entertainment, fireworks and all different kinds of shows.
Usually the cycle of a nightclub in Lebanon would be 3 years. We have been in this specific location for 7 years and in the previous location for 3 years, so it is a 10 year-old brand. To be able to stay at this level for 10 years you need to spend a lot of money. You can spend half a million dollars on one night, or two hundred and fifty thousand or three hundred thousand dollars on other nights, especially when you bring artists like 50 Cent or Snoop Dogg. You need to spend a lot of money when you bring someone of that caliber.
So when you break down the entire thing, yes we generate a lot of revenue but we have to spend a lot of money to keep the place at this level and to be able to attract as many people as we did in the past. If you want to know about the net margin I would tell you we are doing more than healthy.
No, you are a private company so I won’t ask that. So you’d admit that it’s a challenge?
It is very tough; it is probably one of the toughest industries because trends change so fast. You tend to think that people are loyal in this industry but they are not. Whenever they find a better product they switch directly. So in order to sustain a certain level and to retain your clientele you constantly need to be working very hard on your product.
Was it a unique concept originally or did you have some other…?
When I opened the old SKYBAR, it was definitely the first open-air rooftop in the Middle East. When other places started popping up, I moved from the 250 square meter venue to this 1,012 square meter space. I was definitely the only one daring to open something that big and only operate for four months during the year. But like everywhere else in the world when you do something innovative that becomes so successful and there is such hype around it other people start to copy it or try to do the same.
Today we have many open-air clubs. But I feel that there is definitely something different at SKYBAR that you will not find anywhere else which is our understanding of this business, which is more artistic than purely economic.
You founded SKYBAR, it’s your child. What sort of other concepts are you constantly working on in your head, in your brain? What sort of visionary concept are you going to launch in the next 2 -3 years?
Along with SKYBAR we have been producing lots of events. We produce mega-events in Lebanon and outside Lebanon. We have done the Abu Dhabi Formula One after party events for three years in a row. Now what is going to happen for the coming two years: first we are going to be launching the revolution club that is going to be called The One. It is a concept that we have been working on for the past four years, a venue that includes art, since the twenty-five hundred square meter exterior is painted graffiti that we are getting from all around the world. We are using specially customized technologies for the interior. You are going to have around one thousand seven hundred square meters of projection inside when you have three hundred at SKYBAR. So it is really putting nightlife on a different level. The One is going to be gigantic.
We are working on other projects in Lebanon in the food business. And in Abu Dhabi we are opening another club. So we are diversifying a bit, we are not only focusing on nightlife but on the food business as well. But if you want to know where most of my brain goes; to The One, which is a huge challenge. We are hoping to open The One on a nice date that is 12/12/12.
This club is going to operational only during the winter, it is going to be a complement for SKYBAR, and this is something I am really excited about.
Because SKYBAR is nice, but it is seasonal, you have to admit there are 3 months that generate revenue but then how are you going to employ your team? So you do venues, events that you organize and The One is going to be something else?
Definitely. Initially this is how it started. The thought of doing something during winter was to find a way of employing our people during that time. But then over time it evolved and it became a real masterpiece that we are creating. We are working with six international companies from different fields to be able to come out with this project.
We are creating new technologies as I said, we are tweaking conventional speakers and projectors to adapt them to this location, it is something that is going to be quite spectacular.
What kind of clientele are you aiming for? SKYBAR is of course high end, a very sophisticated audience, who are you going to try to attract to The One?
It is exactly the same clientele, the people you see at SKYBAR are the same kind of people you are going to see at The One.
But at the same time people tend to be consistent, they like the same proven concepts and they don’t like change so there is a certain risk you’re taking with The One that it might not after all work that well?
Yes, definitely there is a risk, when there is no risk there is no reward and I am a very big risk taker. That is my nature, that is who I am, and all drive is based on this, it is such a challenge.
I love what you are saying, this is what makes me become better. The thought that people might not like this new thing, so we keep working on it and adding more things to make it the magical thing that I do not think will disappoint any of our clients.
Being a reference in Lebanon helped me a lot because any international team whether television or magazine or press coming to Lebanon would directly end up here when they wanted to talk about nightlife. So it gave me a very big edge and it helped me promoting SKYBAR. But as I told you, the Lebanese people are the ones who really promoted Lebanon worldwide. And in a way SKYBAR put Lebanon back on the international map and it was the Lebanese people who put SKYBAR on the map.
Of course not everything is nice and rosy, everyone has challenges so in terms of your international presence what things remain, you are such a person that you can’t stop striving for the best, so where do you feel that you still have a little bit of the margin that you have to catch up?
Definitely I need to catch up on all the trends whether in music, all kinds of imagery, this new visual world. We try to be as up to date as possible but there is definitely a gap. Geographically we are not part of the occidental world so any trend takes a bit of time to reach us. We try to travel abroad as much as we can to explore new trends, new directions, new technologies. For Lebanon we are definitely leaders, but if we had to compare ourselves to international brands, we are not too far behind, we make sure we are on the same level and sometimes even better.
Exactly this was my point, there are definitely reviews that list the five or ten most important clubs around the world and you definitely need to become one of them…
First of all we were number one in 2009 in one of those rankings, but I do not know how accurate these rankings are and who are the people that can rank clubs. Is it the clubbers or people in the industry? So usually these rankings are not very accurate, but we are in the top 100 of most of them. We do exist, we are there.
But personally you don’t pay much attention to this?
Not really, I mainly focus on keeping SKYBAR at the same level or even better than it is from year to year, and keep on satisfying the people who come to experience a good time at SKYBAR.