Conference Call: Firms Looking for New Ways to Entice Global Conventions Back to Israel

The international conference business is big bucks, and Israel used to be a world leader in the field. Now it's using unconventional thinking to reestablish its standing.

International conferences and conventions are one of the most lucrative categories of tourism. Attendees tend to have relatively high disposable incomes, so that they not only pay fees to register at the conference or exhibition itself, but also spend significant amounts taking in the sights of the host city in their free time. They typically stay at high-end hotels, eat at expensive restaurants, shop, set out on tours and day trips, and ride in taxis rather than buses. Industry sources estimate that the sector brought in between $50 million and $80 million in revenue to Israel in 2012.

Moreover, visitors often act as informal goodwill ambassadors when they return home, says Lior Gelfand, CEO of conference organizer Ortra.

“There are no better ambassadors than 300 scientists who arrived in Israel because they had a conference and leave amazed by what they saw,” he says. “I don’t want to malign religious pilgrims or any other type of tourism, but conference tourism is top-tier tourism, and the public relations they do for us is the same.”

“Conference tourism could be one area where Israel has a competitive advantage in tourism, due to the state’s standing in the world in the sciences, medicine and high-tech,” says Shmuel Zurel, director of the Israel Hotel Association. “The advantage of conference tourism is that it usually takes place off-season and helps fill hotels during periods when demand is relatively low. It also brings people to Israel who wouldn’t necessarily visit if there weren’t a conference. They aren’t like the average tourist coming here, who’s interested in religion and history.”

Yet according to figures from the International Congress and Convention Association, Israel is far from realizing its potential in the field. In 2012, Israel was ranked 54 out of 104 countries in terms of the number of international conferences it hosted – just 34. By way of comparison, in 1996 Israel was ranked fourth.

The turning point was the outbreak of the second intifada and ensuing violence in 2000, when the Israeli conference industry almost completely fell off the world map. Only in recent years has the local industry begun to match and exceed the level of 30 conferences annually.

'Negative light'

Another issue hurting the conference industry is the negative perception of Israel on human-rights issues, says Mira Altman, CEO of the International Congress Center in Jerusalem. “The professional associations are made up of people who respect human dignity and are well educated,” she says. “When the world sees [African] refugees marching on Jerusalem, it shows us as a country that doesn’t address refugees and the weaker sectors of society appropriately. And, of course, many times the Palestinian issue puts us in a negative light. These are issues that depict us as a country that does not address its problems justly.”

Pini Shani, director of overseas development at the Tourism Ministry, points to another factor hurting Israel’s potential as a conference destination. Many of the professional associations, he says, have Muslim members, making the holding of a conference in Israel a sensitive issue. “There are many people from Arab countries who won’t want to come to Israel, and so the association passes on us,” says Eyal Halevy, CEO of Paragon Group, a conference organizer.

Still, it would be wrong to blame the failure of conference tourism entirely on the geopolitical situation. “The conferences are not coming here in larger numbers because the Tourism Ministry and the local authorities aren’t doing enough to market Israel as an attractive place for international conferences,” believes Altman. “As a congress center, we do this work – bringing over journalists who write about the place, and its potential and attractiveness as a host for international conferences. It’s a pity the Tourism Ministry doesn’t help fund this promotional effort.”

However, Tourism Ministry officials assert that the conference industry doesn’t need government funding to develop and attract business from abroad. “Usually, most of these claims are gimmicks,” says Shani. “There are many organizers who succeed in bringing conferences to Israel without asking for money from the Tourism Ministry. It’s not like, if we were to put up the money there would be a conference industry, and if we don’t there won’t be.”

Altman decided not to wait for government support and took matters into her own hands.

The ICC works with an overseas company that specializes in locating professional associations that routinely hold international conferences. When any of the associations expresses interest in holding a conference in Israel, the company refers them to the center. The service costs the center 15,000 euros ($20,400) annually, but Altman says it’s worth it. Out of the 20 professional associations the company referred to the center, five agreed to hold conferences in Israel.

However, Altman says that bringing conferences to Israel is not her job, and there should be someone working within the government who’s dedicated to the task. Altman proposes that Israel establishes a convention bureau, something that exists in many countries and even in large cities around the world, to actively promote it as a conference destination. Sometimes, these bureaus even entice organizations to choose their specific destination as a conference site by providing grants to cut costs.

“Today, we’re the ones who invest the money to bring decision makers [for conferences to Israel] and if they decide not to choose Israel, the money goes up in smoke,” says Halevy. “This is something a convention bureau should be doing.”

Halevy adds that, for the Paragon Group, the cost of locating potential conference clients and bringing the decision maker to Israel is between 5,000 and 7,000 euros ($6,800-$9,500). “We can only afford to bring one or two decision makers, but the numbers have to be much larger to make it work,” he says. “Israel has to bring 50 associations per year.”

Insurance policy

Another measure that could lead to a significant increase in the number of conferences would be a special class of insurance policy for conferences, issued by the state-owned company Inbal Insurance. Such policies would serve as a safety net for organizations that want to hold a conference in Israel but are worried that geopolitical instability in the region could lead to a last-minute cancellation.

“The aim of this policy is to enable me to go to a committee abroad that is considering coming here, and tell them I believe in my own product and that there will be quiet here in the next decade,” says Gelfand. “It’s more of a psychological, marketing thing for the organizing committees, because the likelihood that a conference will be canceled is small.”

Zurel notes that such policies are similar to those Israel gives to exporters shipping goods to high-risk countries to insure them against loss. “This is something the Tourism Ministry has to agree with the Finance Ministry,” he says.

The Tourism Ministry’s Shani agrees that insurance policies could help promote the conference industry, but also points to potential problems. For starters, the exact nature of an event that would trigger the policy coverage would need to be clearly defined. An insurance company would likely say that it does not cover a canceled conference in Tel Aviv when the precipitating event occurred in Eilat, Shani says.

“The cost of insurance is negligible when compared to the revenue that a large conference brings to the economy – tens of thousands of dollars compared to millions of dollars,” he adds. “But there’s a matter of principle here: That the state does not usually subsidize this kind of activity.”

Haim Damari
Haim Damari