For Israel’s travel industry, 2015 was a year of contradictions. Discouraged by lingering security fears after 2014’s Gaza war and then the wave of stabbings that began in October, foreign tourists stayed away. But spurred by cheaper airfares, thanks to regulatory reforms, Israelis were boarding planes and globe-trotting in record numbers.
The final figures won’t be released until next month, but the Tourism Ministry estimates that the number of tourists visiting Israel this year will be just 2.8 million, down 4% from 2014, which itself was a poor year for tourism because of Operation Protective Edge.
Incoming tourism had shown some signs of delayed recovery from the war, a 50-day conflict that ended in August 2014. August arrivals were about the same as they were in 2013, the last good year for the industry, and in September were 6% of that year’s figure.
But the wave of stabbings that began in September and reached a crescendo the following month caused arrivals to drop 14.5% from two years ago. In November, the last month for which figures are available, they were down 18.5%.
Industry sources are doubtful about any immediate turnaround in 2016.
“In the most optimistic scenario, we expected incoming-tourism numbers in the first quarter of 2016 to remain the same as in first-quarter 2015 – there won’t be a decline,” said Yossi Fattal, CEO of the Incoming Tour Operators Association. “The scenario that worries us is that there will be a decline. In any event, no one is talking about an increase.”
One reason for the bearishness is Russia, which had emerged as a major source of incoming tourism until the combination of Western sanctions and plunging oil prices pushed its economy into recession.
Once the second-biggest source of tourists, the number of Russian visitors plummeted 26% in 2015 from the year before, according to preliminary figures. Industry sources said they see no sign of any turnaround and no other market could replace it.
Eilat, the southern sun-and-sea resort town that acts a distinct sub-market, had hoped to lure more tourists from Russia and other markets by offering subsidies to airlines flying visitors to its Uvda Airport. The November bombing of a Russian jet flying tourists from Egypt’s Sharm al-Sheikh was also expected to help the Eilat industry.
But the subsidies – which amount to 60 euros ($66) per passenger, two-third covered by the Tourism Ministry and the rest by the Eilat Hotels Association – incentivized low-cost airlines like Ryanair to starts flights.
But tourists landing in Eilat are often seen then checking in to hotels in the adjacent Jordanian resort of Aqaba or Egypt’s Taba, where hotels are cheaper. The Tourism Ministry estimates that about 16% of those who landed at Uvda in November, mainly from Latvia, Poland, Hungary and Russia, crossed the border. Those who stayed in Eilat tended to stay in cut-rate hotels or youth hostels.
Meanwhile, outgoing tourism jumped a preliminary 9% from 2014 to a record 15.6 million fliers this year. The industry sources expect to best the record next year, anticipating 16.3 million fliers as airlines offer more routes and flights, the fruit of the Open Skies aviation liberalization pact Israel signed with the European Union two years ago.
Civil Aviation Authority said this winter that the number of weekly flights would be up 6%, or 40, from a year ago. Low-cost carriers are leading the growth, with plans to fly a combined 66 weekly flight’s this winter, 20% more than in the winter of 2015.
Israel’s hotel industry has been an all-around loser, with fewer Israelis taking vacations at home, fewer foreign tourists coming at all and many of those that do using social-media applications like Air BnB to find short-term apartment rentals.
Overnight stays by Israelis rose slightly in 2015, but stays by foreign tourists fell 11% in the first 11 months of the year, according to the Israel Hotels Association.
The IHA doesn’t see any recovery in 2016. Reservations in the key tourism cities of Jerusalem, Tiberias and Nazareth show overnight stays dropping 15-20% in the first quarter, compared with the same time in 2015. In Haifa and Tel Aviv the declines will be more moderate, at about 8%.
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