The Russians Aren't Coming! Financial Crisis Hits Israeli Tourism

Decline in Russian arrivals translates into a $153 million fall in annual spending for Israeli tourism industry.

Daniel Bar-On

Russia is the second-largest source of foreign tourists to Israel after the United States, so when it suffers a financial crisis, the tourism sector here inevitably feels the effects.

The Israeli Tourism Ministry has cautiously estimated that the number of tourists coming from Russia is set to decline by 20%, compared to 2014.

One major reason is the plummeting value of the Russian ruble, which has dropped more than 45% against the U.S. dollar this year, for example.

The decline in Russian tourist arrivals here translates into a 600 million shekel ($153 million) drop in annual spending.

Since visa-free entry into Israel by Russian nationals began, the numbers of arrivals had steadily increased. But this year – which was also marked by the 50-day summer war between Israel and Hamas in the Gaza Strip – brought a reversal in the numbers.

For the first 11 months of the year, 528,000 Russian tourists came to Israel, which was 6% fewer than January – November 2013.

“At this stage, there’s uncertainty, but it’s clear that the damage is great,” said Tourism Ministry director general Amir Halevy.

“Operation Protective Edge hurt a lot of markets, but the Russian sector remained relatively stable, because the Russians are less frightened by a sensitive security situation.

“Therefore,” Halevy added, “the [current] hit is that much more painful.”

One form of Russian tourism that suffered an especially hard blow was medical tourism, involving tourists who come to Israel specifically for medical care. Russians normally account for the lion’s share – 80% to 85% – of medical tourists to Israel.

Oleg Shulman, who heads the Israeli Association of Medical Tourism Companies, has reported a 60% to 70% decline in the number of reservations by medical tourists from Russia for December and January, compared to the same period a year ago.

“People have stopped placing reservations over the past three weeks, and there have also been cancellations,” Shulman reported. “The patients saved all of their money in rubles,” he explained.