Israeli tourism industry in collapse as 10% of the country’s hotels at risk of shutting down

07/28/2024 / By Ava Grace

About 10 percent of hotels in Israel are at real risk of closing, with many others on the brink of financial collapse, according to a report released by the Israel Hotel Association (IHA), detailing hotel occupancy rates across the country for the first half of the year.

“Maintaining the tourism industry is a national interest, and all relevant parties must work together to prevent hotel closures and increase security for an industry that proves to be a strategic asset for the State of Israel daily,” said Sivan Detauker, CEO of IHA, which represents 450 hotels nationwide, employing about 42,000 workers. (Related: COUNTRY IN COLLAPSE: 46,000 Israeli businesses have shut down since October 7.)

The report highlights the severe financial distress experienced by parts of the Israeli economy dependent on incoming tourism. The only bright spot is that regions hosting displaced Israeli residents and relying on domestic tourism, particularly those around Eilat in Southern Israel and the Dead Sea in the occupied Palestinian West Bank, are reporting high occupancy rates. Meanwhile, hotels and guesthouses along the northern border have been closed for the 10 months since the war in Gaza began.

Detauker emphasized the vital role Israeli hotels have played since the war’s outbreak, hosting tens of thousands of displaced Israelis while maintaining operations in a challenging security environment devoid of tourists. She highlighted the significant staff shortages and economic uncertainty, which hinder the sector’s ability to plan for the future.

The report indicated that approximately 969,000 tourist overnight stays were recorded in the first half of 2024, marking an 81 percent year-on-year decline and an 84 percent decrease compared to the same period in 2019. Detauker noted that this massive drop in activity has contributed to significant staffing shortages and other economic uncertainties, making planning for the industry’s future difficult.

Hotel occupancy rates in Israel dropping rapidly

According to the Tourism Ministry, only about 500,000 foreign tourists visited Israel between January and June, compared to about two million in the same period last year. This has made occupancy rates drop, especially in areas commonly visited by foreign tourists, such as Jerusalem, Nazareth and Tel Aviv.

The occupancy rate for hotels in Jerusalem was 41 percent, a 37 percent decrease compared to last year, while Nazareth recorded a 33 percent occupancy rate, 40 percent less than the previous year.

At the same time, Lebanon experiences a strong tourist season despite Israeli threats to invade the country and bomb its capital city, Beirut.

Jean Abboud, president of the Association of Travel and Tourism Agents, stated that 14,000 passengers arrive daily at Beirut’s Rafiq Hariri International Airport. “If the regional calm currently being discussed succeeds, this summer season could surpass last year’s rate,” he said.

Earlier this month, Hebrew newspaper Maariv called Israel a “country in collapse.” The paper reported that 46,000 Israeli businesses have been forced to shut as a result of the ongoing war and its devastating impact on the economy.

“This is a very high number that encompasses many sectors. About 77 percent of the businesses that have been closed since the beginning of the war, which make up about 35,000 businesses, are small businesses with up to five employees and are the most vulnerable in the economy,” Yoel Amir, CEO of Israeli information services and credit risk management firm, CofaceBdi, told Maariv.

Visit IsraelCollapse.com for similar stories about the effect the war has had on Israel’s economy.

Watch as Israeli settlers lit fires in the main streets of Tel Aviv and staged a show called “Burning House” to portray the “burning of Israel” due to Netanyahu’s policies.

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