Arkia Looks to Aqaba as El Al Muscles in on Eilat

Southward bound: As Israel's airlines ramp up the competition to bring tourists to the Red Sea, Arkia has set its sights on a slightly cheaper destination beyond Israel's borders: Aqaba.

El Al and the Eilat Hotels Association have teamed up in an effort to put Israel's southernmost city back on the tourism map, with a conference scheduled for the end of the month to be attended by 250 travel agents. The marketing campaign involves a NIS 2 million investment.

Meanwhile, competitor Arkia announced it is launching a campaign to bring tourists to neighboring Aqaba, in Jordan, offering both charter flights and package deals starting next month. Arkia's flights will depart from Ben-Gurion International Airport and from Haifa on Fridays and Mondays. A weekend at a four-star hotel will cost between $300 and $500.

Arkia and Israir will not be participating in the Eilat conference. Sources say that Arkia's move to push Aqaba stems from Tourism Minister Yisrael Katz's decision to allow El Al to offer flights to Eilat, a destination that had been the domain of the two smaller carriers.

A source in the Eilat municipality said that Arkia's announcement was tactical, and did not necessarily herald serious plans.

The Eilat hoteliers support the El Al flights, which they say could enable Eilat to break into the European tourism market, because catching a connecting flight to Eilat would be easier. To date, Arkia has not been able to offer its customers connections to Europe.

Aqaba has risen as a tourist destination over the past few years, with 39 hotels to Eilat's 50. While it had less than half the number of hotel rooms as of 2009 - 4,200 versus 10,900 in Eilat - another 7,500 are being built or in the planning stage, as opposed to 2,200 in Eilat. It brought in more foreign tourists in 2009 than Eilat did - 241,000 versus 220,000. Aqaba is also slightly cheaper than Eilat - hotel rooms cost $100 to $350 a night, as opposed to $150 to $450 in Eilat, according to Expedia.

Hotel officials and travel agents expressed surprise at Arkia's move, noting that its package deals wouldn't cost much less than deals in Eilat, and that the Aqaba route wouldn't have the steady demand of businessmen and people visiting families.

"Israeli tourism to Eilat is only getting stronger," said Shabtai Shay, head of the Eilat Hotels Association. Instead of Aqaba, Arkia should look into running flights from European destinations to Eilat, he suggested.

In any case, Arkia has gotten clearance for the Aqaba flights from the Shin Bet security service, under specific security restrictions - namely, that it leave Jordan only after dark.

"El Al's entrance into the Eilat market will damage the status quo. I need to ensure my employees' income," said an Arkia official, adding "We rented out 500 rooms in Aqaba just over Passover."