Tourism to Israel Refuses to Take Off Despite Record Investments

The Tourism Ministry has neither a marketing head nor a functioning operational arm; its 440 million-shekel budget has barely bumped up business.

The pool at the Desert Iris Hotel in Yeruham, Israel, September 7, 2015.
The pool at the Desert Iris Hotel in Yeruham, Israel, September 7, 2015. Eliyahu Hershkovitz

According to statistics of the World Tourism Organization, travel to the Middle East declined 6% during the first nine months of 2016 as the region was wracked by violence in Syria, Egypt, Iraq and Yemen.

Tourism to Israel, in contrast, rose 2% between January and November, compared to the same time in 2015, figures from the Central Bureau of Statistics show.

The Tourism Ministry was granted its biggest marketing budget ever in the past year as it tried to change Israel’s image as a travel destination and expand the range of tourism offerings. On the surface, it seems as if the ministry has used the bigger marketing budget it has enjoyed this year wisely and kept the tourists coming while the rest of the Middle East suffered.

Tourism Minister Yariv Levin and his director general, Amir Halevi, decided, with the help of consultants, to refresh Israel’s traditional image and rebrand tourism in the country in an effort to quell security fears among potential visitors.

Israel’s flagship campaign, directed at European tourists coming on their own, without a prearranged package, was dubbed “Two Cities – One Break.”

The two cities are, of course, Tel Aviv to enjoy entertainment, beaches and nightlife, and Jerusalem, to visit the holy sites. The idea was to market Israel as a destination with variety at the cost of a short, single flight.

The 90 million-shekel ($23.4 million) campaign included a big internet presence and flew celebrities to Israel in order to promote the concept. But sources said the campaign fell flat.

The new marketing drive got under way this year even though the job of deputy director general for marketing to manage its 440 million shekel budget was vacant. The tender to fill the position was issued only in October, after an extended period spent formulating the job description.

Matrix, a consulting company, is expected to release its recommendations for a structural overhaul of the ministry’s marketing apparatus shortly. The ministry retained Matrix, at an estimated cost of hundreds of thousands of shekels, over the last two years. The marketing staff, meanwhile, has been waiting for a clear, long-term policy to guide them.

Professionals in the tourism industry say Levin, a Likud politician, does not see the ministry simply as a way station to another more senior appointment. He has shown great interest in and knowledge of the field and the difficulties facing it, initiating a series of legislative moves since the beginning of the year to expand Israel’s hotel occupancy capacity, ramp up competition and reduce prices.

The committee for reducing regulatory obstacles that the ministry leads in partnership with the Prime Minister’s Office recently dealt with a number of very burdensome regulations that pertain to hoteliers and demonstrated receptiveness to the market.

The hotel industry has complained for years that such regulation has been one reason for the high cost of vacations in Israel.

Halevi, who also served as the ministry’s acting deputy director general of marketing this past year, is perceived as an innovative director, but also very centralist. He reportedly funnels many fields of operations to his office.

“Halevi asks that everything go through the director general’s office,” says a source close to the Tourism Ministry, who asked not to be identified. “At first, the old backbone of workers was almost completely neutralized, and now the people working with him are his allies and the ones he trusts.”

The source added, “The ability to deliver results in marketing became possible this year because, for a welcome change, there is a lot of money. So you can shoot in all directions. Still, turning to all fields according to caprice – culinary, fashion, urban, arts, LGBT, Catholics, Evangelicals, Chinese – without there being continuity and consistency or an organized plan for extended crisis management, will create a problematic situation in the long term.”