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The economy recovered quickly from the war. Growth returned, exports are flourishing, employment is recovering and the stock market is sky high. But there is one industry, a major one, that has not recovered at all: the tourism industry.

In September there was a decline of 37 percent (compared to September 2005) in the number of tourists entering Israel, and an even sharper decline, of 53 percent, in hotel occupancy. The gap between the two numbers is explained by the sharp decline in "hotel tourism," which brings money and employment to the industry, as opposed to a rise in "family tourism," which is carried out free of charge among relatives.

The situation is even more frustrating when we recall that during the first half of 2006, there were high hopes. Before the outbreak of the Lebanon war, hoteliers held a festive convention in Jerusalem where they spoke of an excellent year and an excellent chance of hosting a record 2.6 million tourists this year. But then the war broke out, and all the hopes went up in the smoke of the bombs and the missiles.

But is only the war to blame? Nobody questions the fact that war harms tourism: Who wants to come to a country where missiles are landing on the residents? But that is only part of the answer. The rest is man-made: failures of the Israeli government.

Eight months ago, then minister of tourism Abraham Hirchson succeeded in reaching an agreement with one of the largest tourism companies in the world, the German company TUI, to fly to Israel often and cheaply. The company began to fly to Israel eight times a week, with four regular flights and four charter flights. The parties even agreed that the number of flights would increase when the "open skies" policy came into effect.

In the wake of TUI's entry into the market, El Al and Lufthansa were forced to lower prices, and this gave rise to a sharp increase in the number of tourists from Germany. TUI, which owns 140,000 hotel rooms the world over, even announced that in the wake of this success, "it would be a natural step to invest in Israel to build hotels for young people who are looking for reasonable prices."

Then Ehud Olmert's government came into being, and Hirchson was appointed finance minister. Hirchson made sure to pass a well-publicized cabinet decision about instituting an "open skies" policy with the countries of the European Union, but a decision is one thing, and the sad reality is another. The new transportation minister, Shaul Mofaz, did not dream for a moment of implementing the cabinet's decision. Instead, he established a committee to "look into the matter": in other words, to bury it.

Nor did Tourism Minister Isaac Herzog do much. He did not fight Mofaz and did not promote the implementation of "open skies." On such an issue, one cannot rest for a minute, because the other side is manned by strong forces such as the El Al workers' committee and the owner of the airline, the Borovich family.

Thus Israel today finds itself lagging seriously behind the rest of the Western world. Then U.S. president Ronald Reagan instituted an "open skies" policy in the United States back in the early 1980s. The EU recently introduced this policy, and low-cost airlines fly all over Europe at amazingly low prices. Morocco opened its skies a little over a year ago, and since then, the number of arriving tourists has risen sharply, to about 10 million a year. TUI alone flies three million (!) tourists to Morocco every year.

That is the same TUI that tried its luck in Israel. But here, it encountered the hostility of Mofaz and a lack of understanding on the part of the entire government. The company did not receive permission to fly to Israel from France and Great Britain, and therefore reduced the number of its flights. And when competition shrank, the prices of flights rose once again, and the number of tourists plummeted, as indicated by the sad statistics of September.

Herzog has a proposal for solving the crisis, a classical Mapai (old-time Labor Party) solution: a higher budget. Herzog proposes that an additional $150 million be given him for a marketing campaign abroad, and the tourists will begin to stream in. For that purpose, he even recruited supermodel Bar Rafaeli, who will show the world the other side of Israel.

But Israeli tourism is competing with Turkey, Greece, Cyprus and Egypt, and both flights and hotels are more expensive here. Therefore, even if Rafaeli recruits Leonardo DiCaprio to help her, they will not succeed in repairing what the government is destroying.