TEL AVIV ― Annual results for 2014 for Israeli tourism companies, hotels and airlines are not good, though few are surprised. Every sector linked to the travel and tourist industry is losing money due to the consequences of last summer’s conflict in Gaza.
Prime Minister Benjamin Netanyahu’s government had approved a measure that promised that tourism companies would be compensated for the losses linked to the war, though funds have yet to be transferred.
The tourism sector needs help urgently, and the government has done nothing, with the Ministry of Tourism barely managing to hang on to last year’s budget levels.
The problems extend well beyond Gaza, including the considerable depreciation of the ruble, which has limited the number of Russians visitors, who in recent years have been second to the Americans. Overall, Israel is now one of the world’s most expensive countries to visit, according to a poll made by HPI (Hotel Price Index).
If you travel around to different hotels in Israel’s main cities, the lack of foreign tourists is notable, with fewer and fewer sounds of people speaking French or Russian in the lobbies and restaurants. In Eilat’s resorts during spring holidays this year, it will be only Hebrew on the beaches.
Israel has become a country of internal tourism. Hotels have to fill the void by turning to Israelis. Though not a catastrophe, it will be hard to bring back foreigners to hotels intended for the locals.
Successful neighbors
With this situation in mind, Israel should learn from Turkey, where tourism also has long represented one of the most important pillars of the country’s economy. Hotels and tour companies have dropped their prices by 35% in order to not lose Russian tourists. The Turkish government is subsidizing some 6,000 euros per flight for Russian airline companies to land in Antalya, so the flow of tourists to the Mediterranean coast will not stop.
Israel loses out in such a race, because Israel’s domestic tourism is very strong compared to Turkish local tourism.
Last week it was reported that the number of hotels under construction in Turkey stands at 53 projects, totalling some 9,400 high standard hotel rooms. These are not projects just in a planning phase, they are soon to be finished and booked hotels.
Even the Egyptians are investing massively in tourism. The published numbers suggest that Cairo invested almost $1 billion to develop new tourism channels and rebuild tourist areas following the Arab spring uprising and aftermath.
Many hotel branches are leaving Israel or at least cutting any new investments. Even Israelis have understood that if you want to work in this sector, this country is not the place.
The problem is not the product, but its management by the state. The situation is disappointing, as Israel continues to be a country with countless world-class holy sites, unique natural phenomena, incredible weather, diverse food, great wine and an amazing diversity of cultures. Even while being so close to the travel-hungry people of Europe, Israel has failed over the years to truly make tourism a central pillar for the economy.
