Haaretz Survey: Tourists Pay More Than Israeli Locals for Hotel Rooms

Israelis typically pay 18% less than tourists, even though prices are supposed to be lower for tourists.

Rina Rozenberg
Rina Rozenberg Kandel
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Rina Rozenberg
Rina Rozenberg Kandel

The Tourism Ministry recently launched a promotion calling on Israelis to invite tourists to this country. However, TheMarker discovered that if the Israeli and the tourist stay in the same hotel, the tourist usually ends up paying more for the same kind of room.

Israelis typically pay 18% less than tourists, even though prices are supposed to be lower for tourists, and despite the fact that Israeli citizens pay value-added tax, while tourists are exempt from VAT on hotel rooms, excursions and car rentals.

We phoned several hotels and found examples of this price differential. A night at the Tel Aviv Carlton in November, for example, would cost Israelis NIS 1,300, with tourists paying NIS 1,465, or 11% more. The difference at the Tel Aviv Dan hotel is 8%, NIS 1,378 versus NIS 1,500.

At the Sheraton and Herod hotels, locals pay 5% more than tourists, but this is still much lower than the 17% VAT charged to Israelis alone. Only at the Hilton do Israelis pay 17% more than tourists, meaning that the basic charge is the same for both.

Here's the deal

Our inquiries showed that even in Eilat, where Israelis are exempt from VAT, some hotels still charge tourists more. At the Dan, a room currently costs Israelis NIS 874 and tourists NIS 1,063. At the Rimonim, tourists pay 6% more than Israelis, while at the Isrotel Royal Beach and Meridien, prices are the same.

Hoteliers say Israelis generally pay less because rooms are presold to overseas travel agents at a set price, and local hoteliers do not lower them. In contrast, prices for Israelis can fluctuate due to changing demand, or the periodic offering of discounts. As the year progresses, prices for Israelis go down but not for tourists, say tourism officials.

Alternative accommodations

Some tourists have realized that hotel prices make their trips to Israel expensive and have sought alternative accommodation.

The Israel Hotel Association reports a 2% drop in the number of nights tourists spend in hotels over the first nine months of this year, compared to the same period last year. But in the first nine months of the year there was also a 4% rise in tourist arrivals.

The contrast may reflect shorter stays in hotels, but probably also represents a growing trend towards renting out private apartments, staying in hostels or with relatives and friends to avoid hotel costs, which are relatively high in this country.

Representatives of the Fattal hotel group maintained that hotel price differentials for Israelis and foreign tourists occurred only sporadically, adding that there were some instances in which tourists actually paid less than locals.

Rimonim chain hoteliers said the price gap exists due to deals offered to locals, or to special offers covering restricted dates, with a lag in price adjustments for tourists.

Prima hotels said some price gaps may arise due to local deals or long-term fluctuations in currency exchange rates.

Carlton hotel officials said the hotel sets prices early in the year for the entire year, with overseas tourist agents marketing the hotel at these prices, and that occasionally, Israelis benefit from local deals.

Dan officials said the chain sets prices according to demand, based on a stay of four nights. Due to changes in exchange rates, a price gap of NIS 50 can arise between locals and tourists. Like officials of other hotels, those at the Crowne Plaza claim they strive to equalize prices for all customers, and succeed most of the time.

The Sheraton did not respond to our queries, and Tourism Ministry spokesmen said the ministry was not authorized to supervise prices.

The Tel Aviv coastline. Credit: Daniel Bar-On