Israel’s tourism industry is struggling under the weight of war

“2023 was supposed to be a record year for tourism in Israel; we were close to 4.5 million tourists,” said Peleg Lewi, foreign affairs adviser to Israel’s Ministry of Tourism.

The downward trend continued in the first six months of this year, with just 501,100 visitors compared to 2.1 million in the same period last year, according to data from Israel’s CBS.

The lack of visitors has been compounded by many international airlines suspending flights to Israel following the Hamas terror attacks, with some still canceling flights as recently as this week.

Samuel Scanlon, Ph.D. candidate in Sociology University of Dublin, highlighted other factors in a piece for The Conversation in May.

He said Israel’s tourism sector could suffer from student-led protests in the US, calls for boycotts and divestments, and solidarity and promotion movements on social media, which could hurt its revenues.

Up to 46,000 businesses have been forced to close since the October 7 terror attacks, according to business intelligence firm CofaceBDI, reported by The Times of Israel last month.

Relying on domestic customers, exporting abroad and reducing costs

David Tucker, general manager of the Ramada by Wyndham hotel in Jerusalem, said the hotel was facing a challenge due to the “big” drop in international visitors.

Since the October 7 Hamas terror attacks, the hotel’s tourist mix has changed, he told BI, with about 30 percent of tourists now coming from Israel and 70 percent from abroad, compared to about 10 percent Israelis and 90 percent foreigners. before the attacks. .

And, “obviously,” hotel profits “were down” last year, Tucker added.

He declined to give BI the hotel’s profit figures or the number of visitors staying there before and after the Oct. 7 terror attacks, but said he expected the hotel to “break even, plus” this year.

Yossi Navi, general manager of the Carlton Hotel in Tel Aviv, said the hotel has also withstood the war for the past 10 months.

He told BI that the hotel made a higher profit in the first quarter of this year than in the same quarter last year, but declined to give BI the hotel’s profit figures.

He said the hotel has stayed afloat by cutting back on outsourcing services, turning to cheaper suppliers of food and amenities and getting support from Jewish organizations — all while housing war evacuees for free in 60 of its 270 rooms. its.

The Israeli government paid $250 per room per night for a couple, he said, meaning it did not have to pay extra to house the evacuees.

“This is the only way to survive,” he said. In May, only 65 percent of the hotel was full, up from 45 percent in October and 55 percent between December and April, he said.

Meanwhile, Israeli tour guides told BI in May that they had to turn to “pain tourism” as their only means of making money, as the sites of the October 7 attacks are the only ones in demand.

On October 7, 2023, over a thousand people, mostly civilians, were killed in Hamas attacks on Israel, with the Nova music festival being the site of the highest number of casualties.

Israel retaliated against Hamas in Gaza, which, according to the UN, resulted in more than 35,000 Palestinian deaths.

On the brink of war

Things were not as easy in northern Israel.

Israel and Hezbollah, the Iran-backed militant group operating out of Lebanon, have exchanged fire regularly since Hamas staged the cross-border terror attack in Gaza.

While this kind of weirdness has so far been confined to the border region, it could escalate into a wider war.

Tensions rose again recently after Israel killed a Hezbollah commander in the Lebanese capital, Beirut.

The IDF said the attack came in retaliation for the armed group’s lethal rocket strike on a soccer field in the Israeli-controlled area of ​​the Golan Heights.

Yaara Alfasi, vice president of marketing and exports at Mount Odem Winery, said the family business, located in the northern part of the Golan Heights near the Israel-Lebanon border, has borne the brunt of the constant fire in the area.

He told BI that the winery was declared a closed military zone from October to November, the peak of the harvest season, and the winery’s sales fell by 70–80% in the last quarter of 2023.

Even now, he said, there is still “uncertainty about whether we will be able to get to the vineyards because the security situation warms and relaxes every time.”

“Although the market has gradually recovered, it is still far from what it was at the beginning of the war,” he said.

Gal Yaniv, CEO of Pelter Winery, a family business in the Golan Heights, is in a similar situation.

He told BI that most of the vineyards are on the Lebanese-Syrian border and some are within reach due to cross-border fires and explosions.

“Because of fires caused by Hezbollah rockets, we have already lost about 7 percent of the expected harvests,” he said, adding: “If the situation continues, we are in big trouble.”

He said his profits have fallen about 5 percent since Oct. 7.

The tourism industry was there before

Having worked in Israel’s hospitality industry for more than 40 years, Ramada by Wyndham Hotel’s Tucker said the country has been through several crises, including two intifadas and two Lebanese wars.

“And once things settle down, in a few months, the tourists come back in a big way, because people want to visit Israel and the Holy Land,” he said.

Tucker said he hoped the war would end “as soon as possible.”

However, for that to happen, the hostages must be released, he said, adding that he would not want to be in Netanyahu’s “shoes” right now.

Navi at the Carlton Hotel in Tel Aviv echoed Tucker’s comments, saying ending the war with Hamas would “absolutely” help.

Lewi, the foreign affairs adviser to Israel’s Ministry of Tourism, predicted that if the conflict ends, the industry’s recovery will take longer than in past conflicts, probably three to six months.

“In the last 20 years, there have usually been short cycles of violence – two or three weeks. We’ve been there for 10 months,” he said.

According to business intelligence company CofaceBDI, reported by The Times of Israel, up to 60,000 businesses are expected to close in 2024.

“We were making plans for the next day, the next day, and the next day never came,” Lewi said.