Israeli Tourism Industry Praying for a Russian Revival

Some see feint signs of a recovery despite the big power's economic woes.

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Russian tourists in Tel Aviv, 2010.
Russian tourists in Tel Aviv, 2010.Credit: Moti Milrod

Israel’s tourism sector is hoping against hope that Russians start returning later this year after arrivals plunged during Russia’s economic crisis.

Israeli hotels have reported a drop of 50% to 60% in overnight stays by Russian tourists for the first quarter, compared with the same time in 2014. The decline has been the sharpest in the southern resort town of Eilat and the health resorts along the Dead Sea coast. Tourist arrivals from Russia were down 37% year on year in January and February.

Hotel executives say they don’t expect any recovery before October, but some say they're seeing imminent signs of a turnaround.

“This season is already over, but we’re hoping that traffic returns in the autumn,” said Alona Kosoy, the Isrotel chain's marketing manager for Eastern Europe, who attended a tourism fair in Moscow last week. “The agents we work with were reducing their workforces, but now they’re starting to rehire staff because reservations are beginning to pick up.”

Russian travelers are the second biggest source of tourists to Israel, but their spending power has been pinched by a 50% drop in the ruble, which makes it harder to coax them into visiting Israel with its pricey hotels.

But a survey by Israel’s Tourism Ministry ahead of a marketing campaign aimed at luring back Russians found that Israel was a more popular destination than lower-cost alternatives like Egypt and Turkey.

The survey, which was conducted among Russians who have traveled abroad at least once in the last three years or plan to do so in the next three years, found that 10% plan to visit Israel in the next year, compared with 2% for Turkey and 7% for Egypt.

Although 55% said Russia’s economic woes had made them cut back on vacation plans, three quarters said they planned a trip overseas in the coming year.

One Israeli travel wholesaler who also attended the Moscow fair said she found the atmosphere better than she expected.

“A lot of Russian agents came to the Israeli pavilion. In March we saw more traffic than in February and January, although it's still a problem situation,” said the wholesaler, who asked not to be identified. “We don’t want to bring over tourists from there right now because we’re afraid the wholesalers won’t pay us in the end.”

She said that if the government provided insurance for Israeli wholesalers against nonpayment, the number of tourists would grow, but during the transition to a new government there’s no one to approve a budget.

Likewise, there’s no budget for the marketing campaign the Tourism Ministry is planning, which the ministry said would include billboard, television and radio advertising.

“At the moment there’s no budget, but that’s what we want to do,” said Amir Levy, the ministry’s director general. “We consider this year a chance to deepen our presence in the market.”

But not everyone is convinced a turnaround is in the offing. Amnon Ben-David, CEO of Eshet Tourism, said some 20 Russian travel wholesalers had gone bankrupt in the last few months.

“We hope that in September-October traffic from Russia to Israel will be better . Still, at every fair we’ve been to for the last five years we made connections with new agents, but this time it didn’t happen. We saw almost no new agents and got no new referrals.”

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