Eilat Is Back on Israel's Tourism Map, Thanks to Airlines Subsidies

60-euro payment per passenger rescued the southern resort town from downturn caused by 2014 Gaza war

The Red Sea at Eilat.
Ofer Vaknin

When Operation Protective Edge, the 50-day war between Israel and Hamas in the Gaza Strip, came to an end in August 2014, the city of Eilat was as shell-shocked as anyone. Foreign airlines briefly suspended flights to Israel, some tourists already in the country left early while others still abroad canceled their reservations.

For the Red Sea resort city, it was a disaster. The number of tourists arriving for the 2014-15 winter season that followed the war plunged 68% from a year earlier to just 37,800. The number of room nights in the city’s hotels dropped by nearly half, to 406,000.

Someone had to come to the tourism-dependent city’s rescue before it collapsed.

Welcome back
Tourist arrivals at Ovda Airport
 in winter season,* '000s

And someone did. Tourism Minister Yariv Levin adopted a practice used by many other countries, including ones that compete with Israel for tourists, by paying airlines flying into Eilat’s Ovda Airport a subsidy of 45 euros ($53) per passenger during the peak winter season. The Eilat Hotels Association agreed to kick in an additional 15 euros.

Suddenly, low-cost carriers like Ryanair and Wizz Air were flying to Eilat. The number of tourist arrivals grew to 52,300 in the 2015-16 winter season and to 74,000 in 2016-17. This season, more than 150,000 are expected to pass through Ovda, a number not seen since the heyday of Eilat tourism in the 1990s.

The Irish low-cost carrier Ryanair is the king of Eilat tourism. Last winter, it accounted for 26,500 of the tourists landing at Ovda and this year it will be make 28 weekly flights to Eilat. Wizz Air is going up from two flights a week to seven this winter. All told airlines, are scheduling 60 weekly flights this winter. The Tourism Ministry has extended the subsidies to May 2018, instead of April, in the hopes of luring more visits.

“The Eilat system for encouraging airlines to open direct routes that we undertook has created a revolution in city and returned Eilat to the world tourism map after it was almost completed erased,” said Levin.

Roomier
Overnight stays at Eilat hotels
 in winter season,* '000s

Asher Gabay , a partner in the Astral Hotels chain with properties in Eilat, said his plans assume that the number of tourists in Eilat in 2020 will reach half a million.

“It’s clear that this will happen because of the Tourism Ministry’s system,” he said. “To say today that I am confident about and that this winter I’ll make money, I’m not sure. But the direction is clear and if not this winter than the next winter.”

One reason Gabay is less than confident is that while increasing numbers of tourists are arriving at Ovda, they often aren’t making reservations at the city’s hotels. The number of room nights in Eilat rose by less than one-third over the past two years, while the number of tourists landing at Ovda nearly doubled.

Indeed, the results in terms of hotel stays were so disappointing that the local hotel association held a discussion on whether to keep helping with the subsidies. In the end, the hoteliers voted unanimously to stay with the program in the hopes that their bookings will eventually increase.

Many of the Eilat-bound tourists opt for Airbnb, apartment hotels and youth hostels, which aren’t counted as hotels in the statistics. In addition, a significant number of foreign tourists fly into Ovda because the fares are so much cheaper than flights into Ben-Gurion International Airport, even though their Israel destination is Jerusalem, Tel Aviv or the Dead Sea. A few even go on to resorts in Egypt and Jordan.

And then there are the Israelis who are taking advantage of the subsidized fares to fly out of Israel from Ovda to European destinations.

“The Tourism Ministry has succeeded in bringing tourists to Israel, but it’s a pity that in the end not all of them stay in Eilat, which was the goal,” said one hotelier, who asked not to be identified. He said the ministry should condition subsidies on airline passengers reserving a room in a city hotel.