Tourism Industry’s Woes Turning Into Boon for Israeli Travelers

Entry of low-cost carriers into market, drop in tourist arrivals have upset supply-demand balance .

Rina Rozenberg
Rina Rozenberg Kandel
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An El Al jet at Ben-Gurion Airport.
An El Al jet at Ben-Gurion Airport. Credit: AP
Rina Rozenberg
Rina Rozenberg Kandel

The Israeli tourism industry’s woes are turning into a boon for Israelis who want to fly to European destinations this winter, as airlines lower prices to fill seats.

People who want to spend five nights in Europe at the start of December, for example, can relatively easily find tickets for less than $300. Flights to Berlin on EasyJet or Air Berlin are priced at $270 and those to Budapest on Wizzair and EL Al’s low cost carrier Up are about $240. EasyJet is flying to Rome for $300.

The winter season traditionally sees airfares drop, but this year the declines are even sharper due to an overabundance of empty seats and the growing presence of low-cost carriers flying the routes between Ben-Gurion Airport and Europe after the bilateral Open Skies agreement went into force, say travel executives.

“Airfares at the start of December to European destinations are lower this year ... because of the entry of El Al with its low-cost Up brand to cities like Berlin, Prague and Budapest," said Ronen Ze’evi, manager for scheduled flights at the online travel site Gulliver. "In addition, flights are relatively empty and airlines don’t want to raise prices because there isn’t enough demand.”

Figures from the Israel Airport Authority show that the number of flights between Israel and Europe is growing. For example, some 25 flights between Tel Aviv and Berlin are scheduled in November-December, compared with 15 in the same months last year.

To Rome, there are 42 weekly flights, up from 36 the same time in 2013, while to Paris there are 46 versus 43 last year. Prague has 14 weekly flights in the two months, up from 10 a year ago, according to IAA figures.

Meantime, the decline in tourist arrivals from overseas prompted by last summer’s Gaza war has yet to fully reverse itself. Tourist arrivals for July-September are down 15% to 20% from the same time in 2013, and in the industry the assumption is that the downtrend will continue at least to the end of the year.

Before Operation Protective Edge, the airlines serving Israel had built their schedules on the assumption that tourism arrivals would be up about 10% this year. Their businesses are built more on incoming tourism than Israelis traveling overseas, so they are doing their best to fill seats with bargain airfares.

“We’re seeing drops of 15% and 20% from prices in 2013, depending on the destination. For certain dates, the drops are even bigger” said Dana Lavie, vice president for marketing at the website Daka 90. “There are more flights than there were last year and the supply [of seats] is outstripping demand.”

The one factor mitigating against low fares is the strength of the U.S. dollar, in which airfares are usually set. The dollar is about 7% stronger on the shekel than it was this time in 2013. As a result, the drop in prices in shekel terms is closer to 10%.

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