Falling foreign tourism hit hotel industry in late 2008

Hotel occupancy by foreign tourists was down 13% in the last three months of 2008, even though overall occupancy continued to increase in 2008, rising to 11 million rooms annually in the last quarter of 2008 compared to 9.9 million in the previous quarter. Nevertheless, sinking tourist occupancy left its mark, and the brisk market of 2008 had cooled somewhat by the fourth quarter of the year. Occupancies, which had increased by 3.7% in the third quarter, were up by only 2.9% in the last three months of the year.

Israeli hotels saw 21.6 million occupancies in 2008, the highest level since 2000, with tourists accounting for 10.2 million of these, according to the Central Bureau of Statistics report published on Sunday. Room occupancy reached 67% in 2008, up from 62% the year before.

All areas of the country saw occupancy of more than 60%, except the north, which enjoyed only 58.6%. Tel Aviv-area hotels, on the other hand, reached 74% occupancy on the average - up just 2.1% from the year before. But the biggest increase compared with 2007 was seen in Jerusalem hotels, which were up 13.9%.

Half of all hotel rooms occupied by Israelis rather than foreign tourists, were in Eilat, and another 15% were in the Dead Sea area. In fact, three quarters of all rooms occupied by Israeli tourists in 2008 were in the southern area.

Most areas saw an increase in the number of hotel rooms occupied by foreign tourists and fewer Israelis compared with 2007. This was especially true of the Jerusalem area, where the number of Israelis occupying hotel rooms was down 16% from the year before. The number of foreign tourists rose most dramatically in the north of the country, up 39%. Tiberias saw an increase of 46% in the number of foreign guests.

December 2008 alone saw 1.5 million hotel beds occupied, 41% (623,000) of which were occupied by foreign tourists. The rate of occupancy in December reached 55%.