Israel’s tourism industry is struggling under the weight of the war

“2023 was supposed to be a record year for tourism in Israel; we were close to 4.5 million tourists,” said Peleg Lewi, a foreign affairs advisor to Israel’s Tourism Ministry.

The downward trend has continued over the first six months of this year, with just 501,100 visitors compared to 2.1 million in the same period last year, per data from Israel’s CBS.

The lack of visitors has been compounded by many international airlines pausing flights to Israel in the wake of Hamas’ terrorist attacks, with some still canceling flights as recently as this week.

Samuel Scanlon, a Ph.D. candidate with University College Dublin’s School of Sociology, pointed to other factors in a piece for The Conversation in May.

He said Israel’s tourism sector may be suffering from the fallout of US college student-led protests, calls for boycotts and divestitures, and social media advocacy and solidarity movements, which could hurt its revenues.

As many as 46,000 businesses have been forced to shut down since the October 7 terrorist attacks, according to business information company CofaceBDI, relayed by The Times of Israel last month.

Relying on domestic clients, exporting abroad, and cost-cutting

David Tucker, general manager of the Ramada by Wyndham Hotel in Jerusalem, said that the hotel is facing a challenge due to a “big” drop in international visitors.

Since the Hamas’ October 7 terrorist attacks, the hotel’s tourism mix has changed, he told BI, with about 30% of tourists now coming from Israel and 70% from abroad, versus about 10% of Israelis and 90% of foreigners before the attacks.

And, “obviously,” the hotel’s profits “dropped” last year, Tucker added.

He declined to give BI the hotel’s profit figures or the number of visitors staying there before and after the October 7 terrorist attacks, but he said he expected the hotel to “break-even, plus” this year.

Yossi Navi, general manager of the Carlton Hotel in Tel Aviv, said the hotel also weathered the war over the last 10 months.

He told BI that the hotel made a bigger profit in the first quarter of this year than in the same quarter last year, but he declined to give BI the hotel’s profit numbers.

He said the hotel stayed afloat by cutting back on outsourcing services, turning to cheaper food and amenity suppliers, and getting support from Jewish organizations — all while housing war evacuees for free in 60 of its 270 rooms.

The Israeli government paid $250 per room per night for a couple, he said, which means he hasn’t had to pay extra to house evacuees.

“This is the only way to survive,” he said. As of May, just 65% of the hotel was full, up from 45% in October and 55% between December and April, he said.

Israeli tour guides, meanwhile, told BI in May that they have had to pivot to “grief tourism” as their only means of making money as the sites of the October 7 attacks are the only ones in demand.

On October 7, 2023, more than a thousand people, mostly civilians, were killed in Hamas attacks on Israel, with the Nova musical festival being the site of the highest number of casualties.

Israel retaliated against Hamas in Gaza, which, according to the UN, has led to more than 35,000 Palestinian deaths.

On the brink of war

Things have not been as easy in northern Israel.

Israel and Hezbollah, the Iran-backed militant group operating out of Lebanon, have regularly exchanged fire since Hamas staged its cross-border terrorist attack from Gaza.

While this tit-for-tat has so far been contained to the border region, it could escalate into a wider war.

Tensions rose again recently after Israel killed a Hezbollah commander in the Lebanese capital, Beirut.

The IDF said the attack came in retaliation to the armed group’s lethal rocket strike on a soccer field in the part of the Golan Heights controlled by Israel.

Yaara Alfasi, vice president of marketing and export at Mount Odem Winery, said the family business, located in the northern part of the Golan Heights, near the Israel-Lebanon border, has borne the brunt of constant fire in the area.

He told BI that the winery was declared a closed military area from October until November, at the peak of the harvest season, and the winery’s sales dropped 70–80% in the last quarter of 2023.

Even now, he said, there is still “uncertainty as to whether we will be able to get to the vineyards because the security situation warms up and relaxes every time.”

“Although the market has gradually recovered, it is still far from what it was at the beginning of the war,” he said.

Gal Yaniv, CEO of Pelter Winery, a family-owned business in the Golan Heights, finds himself in a similar situation.

He told BI that most of the vineyards are on the Lebanese-Syrian border, and some are out of reach due to cross-border fires and explosions.

“Due to fires caused by Hezbollah missiles, we have already lost about 7% of the expected crops,” he said, adding: “If the situation continues, we are in big trouble.”

He said his profits have dropped by about 5% since October 7.

The tourism industry has been there before

Having worked for more than 40 years in Israel’s hospitality industry, Tucker of the Ramada by Wyndham Hotel said the country has experienced multiple crises, including two intifadas and two Lebanese wars.

“And once things settle, within a couple of months, tourists come back, big time, because people want to visit Israel and the Holy Land,” he said.

Tucker said he hopes the war will end “as soon as possible.”

However, for this to happen, the hostages must be released, he said, adding that he wouldn’t want to be in Netanyahu’s “shoes” right now.

Navi from Tel Aviv’s Carlton Hotel echoed Tucker’s comments, saying ending the war with Hamas would “absolutely” help.

Lewi, the foreign affairs advisor to Israel’s Tourism Ministry, predicted that if the conflict ends, the industry’s recovery would take longer than in past conflicts, likely between three and six months.

“In the last 20 years, it was usually short cycles of violence — two or three weeks. We have been there for 10 months,” he said.

According to business information company CofaceBDI, relayed by The Times of Israel, as many as 60,000 businesses are expected to close in 2024.

“We were making plans for the day after, the day after, and the day after hasn’t arrived,” Lewi said.