The skies have opened and Israelis are flocking overseas – yet despite the fierce competition the cost of vacationing in Eilat this summer may be more expensive than last year.
An Israeli travel website, Gulliver, surveyed the average cost of staying in the Red Sea resort’s hotels in July-August 2022 compared with the same period last year. It found that the average cost of a three-night stay at the Queen of Sheba Hotel for a couple with two children has increased by 14 percent – from 5,528 shekels ($1,600) in 2021 to 6,300 shekels ($1,820) this year. At the Dan Panorama Hotel, meanwhile, the average cost has risen by 13 percent, from 4,338 shekels to 4,915 shekels.
The average cost of a stay at the Dan Eilat and Astral Nirvana Club Hotel has slightly only increased. But this is also surprising, given the fact that Israelis who were interested in taking a vacation last summer did not have many alternatives due to the coronavirus restrictions. They were forced to remain in Israel and therefore demand for hotels in Eilat grew, as did the prices.
This year, it seems that many Israelis are preferring to fly to Western Europe, the Greek islands, the United States or Thailand. Based on Civil Aviation Authority estimates, some 4.3 million passengers are expected to pass through Ben Gurion Airport in the summer months.
The rising demand for a vacation abroad has driven up airline ticket prices – at times to levels double those of 2019. The deals are beginning to vanish and, according to aviation sector estimates, the price increases will continue and in fact only worsen.
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Tens of thousands of Israelis are also expected to cross the southern border into Sinai. That area has once again become attractive to Israelis, both due to the low cost of hotels and agreements in April to begin operating direct flights between Tel Aviv and Sharm El Sheikh.
‘The hotels aren’t underworked’
So, if there is no shortage of alternatives to vacationing in Eilat this year, why aren’t the prices coming down? According to Eilat hoteliers and travel agents, the main reason is fixed demand for vacations there. At the same time, they add, the last-minute deals have yet to be announced and once they are marketed, the actual prices should drop.
Who are these repeat visitors to Eilat? “There are the long-term aficionados who vacation in Eilat and never go abroad for all sorts of reasons – the long lines at the airport, the repeat COVID cases and the fact that many of them either cannot leave the country, are elderly or prefer not to fly with children,” says a senior executive in the tourism industry. “The population of Israel consists of 10 million people – and at the end of the day, the hotels do not lack for work.”
In the two years since the outbreak of the pandemic, the hotels have been open intermittently due to the various lockdowns and restrictions. Once it was possible to holiday again, in the summer of 2020, Israelis rushed to book vacations and the recovery of domestic tourism could be seen mainly at hotels in Eilat and the Dead Sea. Occupation rates were even higher than in the past, and prices were commensurately high.
Since then, prices have fluctuated in accordance with the reopening of hotels and variations in demand. For instance, following the omicron wave earlier this year, during Passover the cost of a family vacation for three nights at the Royal Garden in Eilat was 11,912 shekels, and 10,908 shekels at the Orchid Hotel.
At present, the prices for July-August stays are not climbing to those record highs, but they are expected to continue rising as demand increases.
“Hotel reservations for Eilat for the summer season began right after Passover,” says Itamar Elitzur, CEO of the Eilat Hotel Association. “There’s already healthy demand for late August, and hotel reservations for the Jewish holidays [in late September and early October] have already begun. It’s true there are Israelis who travel to Sinai or fly abroad, but at the end of the day a lot of people prefer a family vacation in Eilat because they’re familiar with it and know that they’re getting a good product. What’s more, numerous hotels have undergone renovations during the coronavirus period.”
According to Ziv Rosen, CEO of Gulliver Tourism, “In most Israeli hotels the prices have remained pretty similar to last summer, with a slight trend toward higher prices – especially in Eilat, which is the most in-demand Israeli vacation city. There are price differences between July and August due to Tisha B’Av and the ‘three weeks of mourning,’ during which prices are lower as a result of low demand – as opposed to the higher demand during the last three weeks of August, after Tisha B’Av and also after the children’s day camps have ended.”
Ilan Shalev, VP of marketing at Kavei Hufsha (which owns the Daka90 travel website), feels that costs will continue to rise. “The prices in Eilat won’t fall, because the hoteliers are playing poker,” Shalev charges. “The prices drop significantly only at the last minute when hotels are stuck with rooms, and only then is it possible to get a reasonable rate. Anyone who makes reservations in advance for July and August is paying full price and will not find any pricing flexibility right now. The hotels are still relying on high demand.
“Smart Israeli consumers make reservations several months in advance, in order to obtain lower prices,” Shalev says. “The prices are particularly high for those who only remember to book during peak demand or for those booking rooms at the most exclusive hotels.”
Criticism about the high cost of vacationing in Israel is nothing new. In periods of high demand, Israeli hoteliers raise the prices sharply and reap the profits. The hoteliers have often argued that the high prices stem from the general high cost of living – which itself stems from regulations and bureaucracy imposed on them – and from certain costs that are unique to Israel such as security and kashrut requirements.