Israeli Government Has $293m for Tourism and No One on the Job to Spend It

The Tourism Ministry better hire someone fast if it wants to push through plans to promote the country as something more than a place for Christian pilgrims.

Scenes from a promotional campaign highlighting travel in Tel Aviv.
From the website of The Tourism Ministry

While government ministries fight for larger budgets and hope to head off cuts, for 2017 and 2018 the Tourism Ministry will be receiving 1.1 billion shekels ($293 million) – hundreds of millions in additional funding. The ministry’s marketing budget has been boosted to about half a billion shekels, the largest sum the ministry has ever had to promote Israel.

Still, the ministry faces two major questions: Who will be managing this bonanza in the absence of a ministry marketing director for nearly a year now, and where will the money go?

This year’s marketing budget of 340 million shekels, up from 230 million last year, is being managed for the time being by the ministry’s director general, Amir Halevy. An internal candidate had been tapped for the position but it turned out he didn’t meet the criteria. The ministry hasn’t proposed another candidate.

Halevy is pinning a lot of hopes on whoever takes the job. The new person will enter a sector that has not yet fully recovered from the downturn following the 2014 Gaza war. Industry sources say Halevy and Tourism Minster Yariv Levin are highly motivated; after all, they won that unprecedented government funding.

But sources say Halevy hasn’t sufficiently brought in allies along the way. There has also been major turnover at the top of the ministry since Halevy took over more than two years ago.

Halevy acknowledges the criticism but says he wants the ministry to have a marketing director from a major private-sector firm who would do “reserve duty” in the public sector.

“It’s a dream job with a lot of responsibility and a dream budget,” he says. “We need a person from the outside who understands marketing and will do the job right.”

Tourist arrivals to Israel peaked in 2013 at 2.96 million, according to the Central Bureau of Statistics. But in 2014 they fell slightly as the war caused many airlines to briefly suspend service to Israel, and intensive media coverage led many tourists to cancel reservations.

Tomer Appelbaum

In 2015, arrivals fell to 2.8 million. In the first seven months of this year, the number of foreign tourists visiting Israel was down about 1.9%, and the decline was a sharp 5% during the peak month of July.

Yossi Fattal, the director of the Israel Incoming Tour Operators Association, says the current period “is challenging and requires new plans.”

“It's not military hostilities that we have to recover from but rather a regional and even global terrorism phenomenon, an economic crisis in Russia, and shocks to the European economy,” he says.

“All this makes it difficult for Israel to be attractive to tourists. The Tourism Ministry is studying the new challenges and looking in various directions in an effort to identify what works. There's no single formula, but I see that they’re looking around and going in new directions.”

Urban oases

One new direction is a bid to appeal to new kinds of tourists via social media and other websites. There are plans to tap online travel sites such as Kayak and Booking.com. The ministry is also looking to appeal to the independent traveler – tourists not in organized groups, most of which are Christian groups.

Independent tourists might stay at a hostel, hike the Israel Trail and make sure they explore Tel Aviv. In the process, the ministry hopes to burnish Israel’s image as not only a country with religious and historical sites but one with sexy cities that feature world-class restaurants and hopping nightlife.

The ministry also seeks to attract more tourists from places like India and China. This year the Israeli tourist office in China has received a budget of 15 million shekels, nearly five times the number it received between 2012 and 2014. In the first half of this year, Israel welcomed 39,000 tourists from China, compared with 47,000 in all of last year.

Sara Wass

Some sources, however, fear that in its efforts to mine new markets for incoming tourism, the ministry might neglect stable, traditional markets such as European Christian groups.

“Christian tourism is our bread and butter,” an industry source says. “That’s our clear comparative advantage and our base.”

Halevy admits the industry has to change and marketing efforts have to be fast. And yes, these efforts have to be internet-based and directed at new and varied audiences; Israel has to appeal to more than just visitors’ religious feelings; hence the emphasis on fun cities.

He notes that London is marketed to tourists as one entity, not as part of a visit to England. “Therefore it’s also better to market the gay pride parade in Tel Aviv, the Mahane Yehuda market in Jerusalem and the Beresheet Hotel in Mitzpeh Ramon,” Halevy says, referring to the town in the south with the big crater. “With such a strategy, the entire marketing approach needs to be revised.”

Regarding the staff shake-up over the past two years, one source close to the ministry says people there “were doing work they weren’t qualified for and without really knowing what their jobs required of them.”

And because the ministry didn’t offer professional advancement, salaries were among the lowest, the source adds. The Civil Service Commission acknowledged that the ministry was overstaffed, something it says has been addressed in part by a ministry reorganization. And last week the marketing director’s position was advertised.

The ministry’s own hacking scandal

The ministry has said the turnover in personnel is “part of a revolution regarding personnel and a new approach to marketing at the ministry, along with a doubling of the marketing budget.”

At the end of last year, the ministry’s internal auditor left his job after the State Comptroller’s Office criticized his performance in a report. The document praised Halevy, however; it said he was striving to improve the ministry’s internal auditing.

Japanese tourists covered by black mud at the Dead Sea.
Reuters

A new internal auditor is due to be appointed, but sources say that in the meantime the former internal auditor has filed a police complaint against Halevy claiming that he has appointed associates to ministry positions and projects without a public tender process. The ministry says it is unaware of any such complaint.

Unsurprisingly, the shake-up at the ministry has created labor unrest, but the chairman of the workers’ committee there, Uri Glisko, actually supports the new steps. It wasn’t always that way. He was once considered Halevy’s declared enemy. Two years ago he was barred from the director general’s office after declaring a one-month strike at the ministry over the working conditions of ministry drivers.

Halevy had complained that ministry drivers had been put up at the same hotels as ministry guests, ate at the same restaurants and even took part in the tours. The workers’ committee was concerned the drivers would be replaced by outside drivers.

Later management’s emails were hacked into; Halevy contacted the police. Ultimately an agreement was reached that the drivers wouldn’t be laid off; they’d even get salary increases and bonuses.

But several employees faced disciplinary proceedings and the strikers were docked pay. The police investigation regarding the computers is still ongoing, but labor relations at the ministry have stabilized.

Recently however, a new battle has emerged with the Israel Government Tourist Corp., which predates the ministry’s establishment and is now part of the ministry. Halevy, who was dissatisfied with how the corporation had been run, appointed an auditor to monitor its operations. He also reduced the number of the corporation’s joint projects.

The corporation’s director announced his resignation, claiming that Halevy was tying his hands, meddling in the corporation’s affairs and restricting its funding.

In any case, will all the changes increase the number of tourists heading to Israel? This depends in part on support from Tourism Minister Levin and the speed with which that new marketing director is appointed.

Beginning next year, the Tourism Ministry won’t be able to make excuses about paltry budgets, a flawed organizational structure or unqualified employees. Halevy says the foundation he’s laying will prove itself – with a bit of luck and if the security situation remains calm.