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The suicide bombing in Eilat last week passed without much being made of it. Everyone had an interest in downplaying the incident. Ehud Olmert does not want to damage his relations with Hosni Mubarak, and people in the tourism business in Eilat were anxious to dampen the memory of the attack as quickly as possible. After all, next week, they are traveling to Europe in order to convince the charter operators to renew their flights to Eilat, those same tourism brokers who canceled flights last July as a result of the war in Lebanon. The citizens of Israel also want to bury their head in the sand for a bit, because Eilat is after all like "a short hop abroad," and we cannot allow that pleasure to be taken from us.

But the brutal truth is that the attack reconnected Eilat to the State of Israel. If in the past it was still possible to market it as a peaceful city on the shores of the Red Sea, avoiding any mention of the fact that it was part of Israel, now that has become more difficult to do.

Alas, a number of tour groups canceled their winter holiday plans for Eilat last week, a development that only worsens the situation. February will be the worst month in Eilat in many years.

The drop in tourism from Europe began six years ago following the outbreak of the second intifada, and it has never really recovered. Eilat is still frequented by French Jews. The hope is that they will once more fill the city by mid-March, as Pesach approaches.

But Eilat has a few other problems. It lacks what in marketing is called positioning. When a European thinks about traveling to Morocco on holiday, he envisions a bustling marketplace, exotic foods and a snake charmer. When they say Eilat - nothing in particular comes to mind. There is no positioning. No branding.

Eilat also suffers from competition from Jordan and Egypt. There are much cheaper hotels in Aqaba, and the beaches between Taba and Sharm el-Sheikh are full of hotels, where rooms go for a third of the price in Eilat - because wages there are 20 percent of those paid in Eilat. Also, the sea is clean, the corals are amazing and there are casinos everywhere.

Eilat is actually saved by the Israelis who do visit. A significant portion of them would probably opt for Sinai, but they are worried about Al-Qaida attacks.

Once, the hoteliers in Eilat believed that they should build glamorous five-star hotels to draw tourists from Europe. But it now turns out that it is very difficult to make profit out of fancy hotels, where the required investment is about $200,000 per room. Therefore, the new approach is to set up "niche," or theme, hotels - one for bicyclists interested in desert tours, for example, or a hotel whose focus is the children, or a hotel-spa, or even a hostelry for travelers seeking out extreme challenges.

One of the ideas comes from Yoav Igra, the controlling partner in Herods Palace, an Eilat hotel. Igra is planning to set up a center for eco-tourism, with hundreds of hotel rooms, near Timna Park, about 30 kilometers north of Eilat. It will include conference halls, swimming pools, and a stream of running water that will run for a few kilometers. An ecological structure at the site will turn the sewage waters of the hotels there into water that can be used in the artificial stream.

And how to cut down on costs? It turns out that in a large hotel, half the employees work in food and beverage, with large dining halls and a great deal of food wasted. Igra's idea is to take the food part out of the hotel. In Timna, the hotel will not provide its guests with food. The guests will pay only for the room. They will eat, rather, in a restaurant zone that will be established at the site, offering different options at varying prices. This way it will be possible to significantly lower the price of a room, and the restaurants will operate with much greater efficiency than standard hotel dining rooms.

Revenues at the tourism center will not only come from hotel rooms, but also from various attractions that will be built. If there are nice restaurants and a good atmosphere, Eilat residents will also come, and so will the tourists in the city, for a day of fun. That is what Igra hopes will happen.

The Ministry of Tourism recently commissioned a report from the international consulting agency Ernst and Young, regarding the future of tourism in Israel. The report stated that the areas with the greatest potential for tourism in Israel are Jerusalem, Tiberias, the Galilee, Tel Aviv and Acre. Eilat? The report concludes that there is no economic benefit from investing in tourism in Eilat.