When the representative of a Swedish insurance company told Eshet Incoming Tours last week that it was backing out of a plan to organize a trip for employees to Israel, the reason was clear. “They said they felt it wasn’t a safe enough destination,” said Amon Bar-David, Eshet’s CEO.
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If it were the only instance, Eshet could absorb the loss of the $200,000 reservation, but the travel company also lost a $1 million reservation the same week from a large U.S. food company owned by American Jews, which was supposed to arrange a corporate visit later this year. “They said that right now it would be hard to sell their top sales people on [a trip to] Israel,” said Bar-David.
Israel’s Export Institute said that in the first quarter, tourism receipts, which include all travel spending apart from airfare, dropped 15% from a year ago to just $1.2 billion, the lowest level in five years. Turnover at Israel’s hotels was down 12% to $700 million.
More up-to-date figures from the Central Bureau of Statistics shows a 17% decline in tourist arrivals in the first five months of the year, which includes the Passover-Easter holiday season. Ben-David doubts arrivals will exceed 2.5 million this year and that the problem threatens to extend into 2016.
Operation Protective Edge, the war Israel fought with Hamas last summer, ended nearly 10 months ago, but the effects of the fighting still bedevil the travel industry in Israel. But other factors are contributing to the slack tourism season.
“Every day that there’s a new declaration on Iran or from Hezbollah about wanting to cover Israel with missiles and articles about Islamic State, it’s for certain not encouraging travel to Israel, said Ben-David.
Israel’s deteriorating image is taking a tol, tool. “If someone thinks that the boycott of the British students union doesn’t affect tourism, then he’s living in the clouds,” Bar-David added.
Oni Amiel, CEO of Amiel Tours, said the impact of Protective Edge on tourism to Israel has been proportional to the length of the conflict itself, which, compared to previous bouts with Hamas, lasted an unusually long 50 days.
“The operation got more TV screen time and the idea that it’s not safe here is now fixed,” he said. “But what’s going on around us – Islamic State and the war in Syria – hurts us even more.”
Meanwhile, Russia’s economic woes are hurting, too. Russia had been the second-largest source of incoming tourism, but in the first five months of this year Russian tourist arrival plunged 30% from a year ago to just 75,000.
“Any thought of recovery from the Russian side is a matter of hope rather than realistic expectations. We don’t see any change for the better in the months ahead,” said one tourism official who asked not to be identified.
Yossi Fischer, a tourism expert, said the solution is for Israel to look for new reserves of tourists.
“We built the industry on travel from Russia and North America and didn’t look to develop new markets. In Europe there are a lot of countries where we haven’t exploited their tourism potential, like Poland, which is a Catholic country and whose citizens have a lot of interest in Christian sites, and Hungary and the Czech Republic, which aren’t anti-Israel by definition. Their people are always looking for new destinations,” said Fischer.
Israel Hotels Association president Eli Gonen wants to launch a giant marketing campaign proclaiming that the war is over and make other efforts to raise Israel’s tourism profile. He concedes it will take time and that nothing can be done to save the summer peak season about to start.
“If we embark on a massive campaign now, we might be able to save the final quarter of 2015 and at least take care of 2016,” he said.
Gonen discounted the idea of lowering hotel rates to draw tourists. “For overseas tourism there’s no playing with prices – that’s not what’s preventing people from coming,” he said. “Our main problem is our image.”
Tourism Minister Yariv Levin has still not approved a budget for stepped-up marketing. He said the solution is improving Israel’s branding. “In any case, I think the difficult period is behind us,” he said.