Airbnb Threatens Israel's Hotel Industry

The Israel Hotel Association blames companies such as Airbnb for recent drop in tourists staying in hotels

FILE Photo: Hotels in Israel's southern city of Eilat.
Mori Chen

The number of hotel overnight stays by foreign tourists in September declined from last year, the Israel Hotel Association reported. The trade group coupled the release of the figures with a complaint about unregulated competition from private rentals through online services such as Airbnb.

Foreign tourists spent 658,000 hotel nights in Israel last month, down 3% from September 2017. A rise in domestic tourism, however, more than made up for the decline: The total number of overnight stays was still up 4% from September of last year.

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Last month, Israelis accounted for 1.3 million hotel nights, up 8% from September 2017 and 4% from September 2016. The association attributed the increase in stays by Israelis to the timing of this fall’s Jewish holidays, which this year fell almost entirely in September. Last year they were split between September and October.

The Israel Hotel Association pointed an accusing finger at competition from companies such as Airbnb, which act as intermediaries in permitting tourists to rent out apartments on a short-term basis instead of opting for hotels.

“The figures indicate an increase in the worrying trend of foreign tourist stays at alternative lodgings such as Airbnb, a dangerous and uncontrolled trend that is developing under the noses of the authorities, who aren’t doing anything,” the association said in reference to the lack of regulation of what the association called an “illegal phenomenon.” A year ago, Haaretz reported that there were 8,000 apartments in Tel Aviv alone that were on the market as short-term rentals.

The data for September follow hotel association figures for July and August that show that foreign tourist accounted for just 31% of Israeli hotel stays during those two months. Foreign tourism to Israel, however, is increasing. Last year a record 3.6 million tourists visited the country.

Hotel occupancy rates declined overall last month, which can be attributed to a raise in available hotel rooms — to 54,400, up 3% from a year earlier.

On average, hotel occupancy was 60% in September, off 5% compared to a year earlier. The city with the highest occupancy rates was Eilat, at 72% last month, followed by Nazareth at 65%, the Dead Sea at 63%, Tel Aviv at 60%, Jerusalem and Haifa at 57%, Tiberias and Herzliya with 55% each and Netanya at 54%.

For the first nine months of the year, there were 18.9 million hotel nights at Israeli hotels, an increase of 5% over the first nine months of 2017, the Israel Hotel Association reported.