Hotel Stays in Israel Fall Sharply

Hotel industry blames government for high room rates that deter visitors.

Tourists on the beach in Eilat.
Sassi Horesh

Overnight stays by visiting tourists in Israeli hotels showed a double-digit decline last year as slumping incoming tourism conspired with the growing use of Airbnb and similar services, the Israel Hotels Association said Tuesday.

The number of overnight stays by foreign guests dropped 11% from 2014, which itself was a poor year for tourism, to just 8.2 million. The figure was down 16% from 2013, which was Israel’s best year for tourist arrivals.

Hotels did a better business with foreign tourists over the summer and in September than the same time in 2014, when Operation Protective Edge – the 50-day war Israel fought with Hamas – led the airlines suspending flights and visitors canceling reservations. But the rest of the year, overnight stays were down from 2015.

Overnight stays by Israelis grew last year by 4% to 13.5 million, but it was enough to offset the decline by overseas tourists, so that total overnight stays last year were down 2% to about 22 million, the IHA said.

Eli Gonen, IHA president, attributed much of the decline to high Israeli room rates, which he blamed on the government. In particular he pointed to municipal taxes, which he said were among the highest in the world, and to security costs as well as tough labor laws.

“The drop in incoming tourism is increasing the pressure on hoteliers in their ridiculously high operating costs for hotels in Israel,” he said. “I point a finger at the government, which over the years has done nothing to lower the hotels’ extraordinarily high costs.”

In fact, the decline in overnight stays has been far steeper than the drop in tourism, which has been hurt by the lingering effects of the war and a wave of stabbing attacks that began last autumn. Tourist arrivals were down 4% last year to 2.8 million.

Only 56% of tourists visiting Israel opt for a hotel, with another 28% staying with friends or family and the rest using youth hostels or renting apartments. Services like Airbnb, which match apartment owners with tourists online, have made hotel alternatives much easier to arrange.