How Israel Sabotages Tourism

With taxi drivers who overcharge visitors upon arrival, a shortage of information centers, high prices and fears of political instability, tourism in Israel needs an upgrade if it is to keep up with the rest of the world.

A few weeks ago, two French tourists got onto a monit sherut, a public taxi van that runs a pre-determined route through Tel Aviv. When they asked the driver how much the fare would be, he told them twenty shekels each.

The price should have been six shekels per person. Thanks to an alert passenger who overheard the conversation and corrected the driver, the visitors paid the proper fare – but the damage had been done.

Israel should be one of the most heavily touristed countries in the world. Yet the full potential is far from being exploited, and it isn't only because of missile threats. Israel, from its institutions to its taxi drivers, do all too much to discourage visitors.

Yossi Fattal, the head of the Israel Tourist and Travel Agents Association, wrote a letter to the Transportation Minister, expressing his concern for Israel’s reputation. In his letter, Fattal points to a tourist’s first introduction to Israel – usually at Ben-Gurion International Airport and the subsequent taxi ride to town.

“We view with concern the prevailing trend of overcharging tourists at Ben-Gurion Airport upon their arrival in Israel,” he wrote. “The tourists pay extremely, if not exorbitantly, high prices for the first things they do here.” He points to fares that are 30-50 percent higher for coming into Tel Aviv than those heading in the opposite direction as well as another tactic used by taxi drivers who tell tourists to put their carryon bags in the trunk of the car so they can charge an extra fee.

“It is very well known that first impressions have a great deal of influence on how people relate to their environment,” wrote Fattal. “It’s very unfortunate and annoying to discover that upon the tourists’ first meeting with Israel, they encounter extremely high prices and exploitative customer service.”

Fattal’s accusations are backed up by data.

A survey taken by the Geocartography Group in cooperation with Esther Sultan, director of the Database and Statistics Division at the Tourism Ministry, shows that tourists are less satisfied these days than in the past.

For example, the reviews of tour guides and organized tours received a grade of 4.0 on the survey as compared with 4.4 in 2010 and 4.5 in 2009.

The lodgings category received a mark of 3.6 as compared with 4.2 in 2010. Taxis got 3.4 as compared with 3.8 in 2010, while public transportation received a grade of 3.5 (there were no grades in previous years).

Other items that were surveyed – beaches, restaurants, the highway system and facilities at the airport – also received low marks compared to previous years.

All about the security

Over the past two years, Israel's incoming-tourism trend has been stable: 2.8 million tourists in 2010 and 2.8 million in 2011. The forecast for 2012 is for similar numbers.

Comparison with countries in the region shows that our situation could be a lot better: in 2011, 16.5 million tourists visited Greece, 9.8 million visited Egypt, and 31 million visited Turkey.

Though a small country, Israel has everything it needs to become a leading worldwide tourist destination. We have the Dead Sea, the lowest place on earth, which is also a place of healing. We have Jerusalem with its holy sites and the Sea of Galilee, where Jesus walked on water. We have the resort city of Eilat with its Red Sea beaches, and Tel Aviv, which gets good reviews time and again in international tourism rankings. We have plenty of archaeological, religious and historical sites in addition.

So how can it be that the goal set by Tourism Minister Stas Misezhnikov – 5 million tourists per year by 2015 – still seems so far off?

First, with all its good points, Israel suffers from uncertainty from a security perspective, and the Second Intifada between 2000 and 2005 led to an almost total cessation of tourism. “When travel agents abroad have to decide in the summer about which destinations they will be publicizing in their tourist booklets over the winter, they look at Israel with suspicion,” said a high-ranking official in the tourism industry. “They can’t know whether there’s going to be a war here by that time. Why should they give Israel a place in the booklet when they can market a different destination that’s safer?”

That is also the reason why tourism operators from Europe are asking the Tourism Ministry to provide a guarantee for charter flights coming to Israel during the winter to lower the risk to the operator. In 2011, 16 agreements were signed for flights to Israel – most of them from Europe, directly to Eilat, and more than half of them from Russia, Ukraine and Poland. In 2012 and 2013, about 30 charter flights per week will be arriving in Israel, bringing more than 100,000 tourists in all.

Although the Tourism Ministry has budgeted NIS 16 million for this purpose, it has used only 15 percent of that amount because of a drop in demand in light of the terror attack that took place in Eilat last summer. These flights are critically important for Eilat because that city was wiped off the world tourism map due to the Second Intifada and tour operators have stopped marketing it.

“Over the past several years, we’ve had a pretty hard job to do – to bring Eilat back as a product for potential tourism,” says Oren Drori, the director of marketing at the Tourism Ministry. “We still haven’t gotten back up to 40 flights per week, like we had before the Intifada, but it is an improvement compared with 2003, when there were only three flights per week. Besides the matter of security, there is a problem with the product: it’s less attractive and more expensive than vacation spots in neighboring countries.”

But the attempt to put Eilat back on the tourism map by providing direct flights is not enough. Further measures are necessary. “It’s a drop in the ocean,” Shmuel Zurel, the secretary general of the Israel Hotel Association says of the ministry’s efforts, noting that the city needs to take better advantage of its pleasant year-round climate. “We also need to attract international conferences,” he says. “How can it be that Eilat is a leader in internal tourism, but isn’t a leader when it comes to conferences from abroad?” He proposes a guarantee for international conferences as well.

“That way, conference organizers will know that they can hold a conference in Eilat in three years and the Tourism Ministry will provide a safety net in case of a change in the region’s security situation. There are almost 20,000 hotel rooms in Eilat and at the Dead Sea, and only 10 percent of them are used for tourism. This means that there’s room for growth.”

Good in the off-season

Another problem that looms over foreign tourist is the price of a vacation. Over the next several weeks, the Tourism Minister will present the conclusions of the committee established to probe the costs of a vacation in Israel. One of the major issues examined was hotel prices in Israel compared to those in Egypt, Turkey and Jordan, as well as elsewhere in the world. The gap in price leads tourist to choose other destinations, particularly if they have no religious attraction to Israel.

“The prices are high, but the reasons for that are built into the economy,” says Ami Federmann, the president of the Israel Hotel Association. “Operating costs for hotels in Israel are 14 percent higher than in Western European countries because of the high cost of living, and some costs, such as those of security, kashrut supervision and additional positions such as pool supervisor and gym supervisor, don’t exist in other countries.”

Federmann doesn’t see that as an obstacle, though.  He points to the two factors that will increase tourism, regardless of costs in Israel: a stable security situation in the entire region, and a “reasonable” economic situation in the tourists’ countries of origin.

Even if the advertised hotel prices are high, the prices that tourists actually pay are often lower. For example, Zurel says, religious pilgrims traveling in groups pay an average of $37 per night. If that’s the case, why does the Tourism Ministry direct so much of its efforts to those tourists? For one thing, it is easier to reach them than to reach independent tourists because the marketing effort is directed toward group leaders such as priests and community officials.

“These tourists spend long vacations in Israel and are on the road from morning till night,” Zurel says. “Theoretically, hotel owners ought to hate the pilgrims because they spend the lowest amount of money in the hotels. But they are the best tourists for our economy because they consume many tourism services outside hotels – transportation, tour guides, tourist sites all over the country. Independent tourists may stay in luxury hotels, but they consume very few other services. When the Tourism Ministry decides what to invest in, it should base its calculation on this formula: maximum profit for the most components in the economy.”

But the hotel owners also profit from groups of pilgrims. “The pilgrims arrive at weaker times because of the low prices of the hotel and the flight,” Zurel says. “They are good for us during the off-season. The value of a tourist who stays in Eilat during the winter is inestimably greater than that of a tourist who comes to Jerusalem during the summer.”

The Tourism Ministry is investing NIS 235 million in marketing this year compared to $260 million in 2011. As a result, marketing efforts need to become even more targeted.  “I don’t advertise in Oklahoma,” says Drori, “but rather in places where there are critical concentrations of relevant population groups, people who travel abroad and who have demographic characteristics that are appropriate for Israel. Israel is an unusual destination, and people choose it for emotional reasons connected with religion, history and the search for their roots.”

The United States is the number one source of foreign tourism to Israel. Accordingly, the budget for marketing to the U.S. is higher than elsewhere – NIS 60 million per year. Drori says that although the investment is four times greater than what has been invested in the United States in the past, tourism from the United States fell by four percent in 2011.

“The number of tourists from the United States did not increase as anticipated,” says Drori. “The investment has not yet resulted in the goals that we set for ourselves. But there is no American marketer who does not have Israel as a destination, and that is a success.”

Officials of the Tourism Ministry seek to look at the matter in a global context. They say that the amount of incoming tourism to Israel should be compared with tourist traffic worldwide, which decreases during times of economic crisis, such as the one in Europe, or an unstable geopolitical situation, which includes the rioting and upheavals that took place in Middle Eastern countries last year.

Comfort in numbers, but profit in going solo

Within the tourism industry, some of the big players have priorities that aren’t always in line with the goals of the Tourism Ministry.  “The hotel lobby is a strong lobby that wants to do business only with large tourist groups and only with the big agents,” a high-ranking official of the tourist industry says. “There is a conflict of interest between the national importance of distributing tourism all over the country throughout the year and the interests of the hotels, which want to fill rooms – and most of the rooms are in the center of the country.”

According to data from the Tourism Ministry, 60 percent of the tourists who come to Israel are in organized groups. The rest are independent. The book “Tourism for Development: Empowering Communities” by Regina Scheyvens examines the advantages of independent tourism in countries like Australia, Ireland and South Africa.  It reveals that independent tourists spend more money than tourists in organized groups – an average of $2,667 per trip, compared to tourists in groups who spend an average of $1,272.

But it seems that even if more independent tourists visit Israel, they will encounter problems on a structural level. Dan Aghion, the secretary-general of the Israel Tourist Guide Association, says, “There’s a feeling that that Israel doesn’t have enough infrastructure to accommodate this kind of tourist, and we’re missing out on them. The tourist bureau field, which is weak in Israel, exists at an amateur level.”

The Tourism Ministry runs only four tourist information bureaus – in Nazareth, at Ben-Gurion Airport, in Jerusalem and in Eilat. The rest of the information bureaus are run by local authorities in major cities such as Tel Aviv, Haifa and Tiberias. “The key to a trip by independent tourists is the quality of available information, accessibility of information and the manner in which the information is conveyed. In these fields, Israel is ten years behind the rest of the world,” says Yoni Shapira, the deputy chairman of the Israel Tourist Guide Association. “There’s a tourist information bureau in Jerusalem, but tourists who arrive at the Central Bus Station don’t know how to get to Jaffa Gate, where the bureau is located. Information bureaus operate in an archaic manner. The booklets that they distribute show sites that have no relevance for independent tourists. One example of this is the archaeological site at Sussia, which gets as much emphasis as Caesarea in the booklet even though there’s no way to get there.”

Shapira says that a public agency needs to be established that will tailor the information to the independent tourist.

“All the information is available on the Internet. But searching for it is complicated, and the accessibility of the information is a problem because tourists don’t know that it exists. Public transportation in Israel reaches just about every urban location, but independent tourists will have a hard time getting to places such as nature reserves, national parks, heritage sites and so on unless they join an organized tour or rent a car.”

“We feel that Israel is like New York or London,” says Fattal, “but the fact is that tourists feel a need to crowd together in groups, and most tourism that arrives here is group tourism. This shows how unfriendly Israel is for tourists.”

Defense Ministry
Emil Salman