Two weeks ago, after Israel’s hoteliers put heavy pressure on the Health Ministry, they were permitted to open while adhering to coronavirus prevention regulations. The challenging months they endured while the country was on lockdown pushed them to offer discounts of up to 20% off last year’s prices in a bid to entice customers.
TheMarker investigated just how much the price of a vacation has dropped in Israel, and compared the data to the price of a vacation abroad. TheMarker and tourism website Gulliver found that as of June 4, the price of a vacation in Israel had indeed dropped, but not always as much as promised. In August, which usually brings high demand, hotel prices are only 12% lower than they were in 2019.
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Even in the wake of the coronavirus crisis, hotels abroad are a more attractive deal. TheMarker also checked the prices of comparable locations abroad, some of which have already reopened to business, such as Greece and Cyprus. There, prices are 16% to 31% lower than last year.
For Israelis traveling abroad, it’s hard to offer a precise side-by-side comparison, as vacations abroad entail a flight, transportation to the hotel and often a longer stay.
TheMarker’s comparison is primarily of hotel prices. For instance, a two-night weekend stay at the Dan Panorama in Eilat, in late August, costs a couple with two children 2,944 shekels ($857), 7% less than in August 2019. A similar stay at Isrotel Dead Sea costs 2,962 shekels, 15% less than last year.
But in Cyprus, the discounts are steeper. A three-night stay for a couple with two children at a five-star hotel is now $598, a 31% discount from last year. And the cost of a flight to Cyprus is currently 28% less – $267 per person.
In Greece, the cost of an August stay at a five-star hotel is 16% cheaper at $546. Flights now cost 20% less, averaging $302 per person.
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A comparison of hotel prices alone shows that the price per night in Israel is some three to six times more than in nearby Cyprus.
Israel’s hoteliers say that hotel stays in Israel are more expensive because the cost of living here is higher, and because they also bear added costs such as kashrut and security. In addition, the coronavirus regulations create new costs due to the need to maintain distance between people and increased hygiene and disinfection.
Hotels abroad also face new coronavirus-related regulations, although they aren’t precisely the same as those in Israel.
Ronen Nissenbaum, CEO of Dan Hotels, says that fixed costs are higher for Israeli hotels than any hotels in Europe. “Every hotel has at least one or two kashrut supervisors and armed guards, while European hotels face no such demands,” he says. Minimum wage is also higher in Israel than in Greece, Cyprus and Turkey, not to mention the additional burden of Israeli regulation, he adds.
Israel’s hoteliers take home net profit of 8-11% while hotels abroad have net profits of 20-30%, he claims. This gives them more freedom to lower prices, he says, adding that the discounts in August are not that high because it’s a month with high demand. However, he says that in June, July and after the Jewish holidays in the fall, consumers can find discounts of up to 30% off last year’s prices.
TheMarker did find that when the demand is lower, Israeli hotels are offering discounts of up to 20% compared to last year’s prices.
It’s all a matter of supply and demand, says Gulliver CEO Ziv Rozen. “Israel’s hotels are recovering better, primarily those in Eilat and Tiberias. They’re getting more reservations, so they don’t need to reduce prices as much in order to attract customers,” he says. On the other hand, Greece and Cyprus aren’t getting great reservation numbers yet. Israeli tourists aren’t going back because the Health Ministry hasn’t dropped the requirement for a two-week quarantine for all incoming air travelers, he notes.
Israel’s Health Ministry and Tourism Ministry are still debating when and how to relax this demand. Under discussion is a proposal to allow travelers arriving from specific countries with low coronavirus rates to skip quarantine. These countries include Greece, Cyprus, Montenegro, Georgia, the Seychelles and Austria.
Tourism Ministry officials fear that opening borders with Greece and Cyprus will bring one-way traffic – Israelis heading abroad for vacation – and will harm Israel’s own tourism industry.
Political issues regarding coronavirus prevention measures and tourists falling sick abroad also haven’t been settled.
Meanwhile, Greek and Cypriot hoteliers are hoping to see Israeli tourists return. Radu Stefan Mitroi, CEO of the Almyra Hotel, part of the Thanos Hotel Group in Paphos, Cyprus, says that with a 15% discount, Cypriot hotels are some 20-30% less than comparable hotels in Israel.
While British tourists also account for a considerable portion of Cyprus’ tourism industry, the coronavirus isn’t under control there yet, so it’s not clear when they’ll be returning to Cyprus, he says. Israelis are the second-largest group of incoming tourists, followed by Germans, Austrians, Dutch and Russians, he says.