Dan Hotels Reports Sharp Decline in Q2 Earnings Amid Tourism Collapse

 Dan Hotels has reported weak financial results for the second quarter of 2025, as the continued decline in inbound tourism — exacerbated by the war with Iran — severely impacted its core business. The hotel chain is also no longer hosting evacuees, a temporary revenue stream it relied on during earlier stages of the conflict.

The company, which operates 16 hotels in Israel and one in India, announced a 26% year-over-year drop in hotel revenue compared to Q2 2023, and an 83% plunge in quarterly hotel net profit.

Tourism Crisis Deepens

Before the October 7, 2023, Hamas attack, foreign tourists accounted for 47% of Dan’s total guest nights. But the number of tourist arrivals fell from 1.6 million (Jan–May 2023) to just 556,000 in the same period this year.

While early 2025 had shown slight improvement (up from 399,000 in early 2024), the outbreak of hostilities with Iran in June reversed that progress. Only 140,000 tourists entered Israel during June–July 2025 — compared to 200,000 last year and 600,000 in the same months of 2023.

In its earnings statement, Dan cited a “significant decrease in occupancy, cancellation of reservations, and a lack of new bookings.” As a result, the company shuttered the Dan Boutique Hotel in Jerusalem during Q2 and previously closed the HaMa’ayan Hotel in Nazareth after October 7, 2023. Both will remain closed indefinitely.

Financials: Steep Declines Across the Board

• Hotel revenue for Q2: NIS 281 million, down 7% YoY, and down 26% from Q2 2023 (pre-war)

• Operating profit from hotels (before depreciation/finance): NIS 39 million, down 41% YoY

• Hotel segment net profit: NIS 4 million, down 83% from Q2 2024

• Total revenue (including catering): NIS 378 million, down 4%

• Net profit (including catering): NIS 5.4 million, down 77%, aided by a NIS 5.1 million war-related government grant

The decline in evacuee hosting also impacted Dan’s cost structure. The transition back to standard hotel operations raised costs — particularly in staffing — without a matching rise in revenue.

H1 Results: NIS 50 Million Hotel Loss

For the first half of 2025, Dan Hotels reported:

• Hotel revenue: NIS 475 million, down 11%

• Hotel segment net loss: NIS 50 million

• Total revenue (including catering): NIS 674 million, down 8%

• Net loss: NIS 47 million

The company said it “does not expect to reopen closed hotels” until the tourism sector stabilizes. It also warned of continued negative impact through the rest of 2025, citing persistent uncertainty and minimal foreign arrivals.

Outlook: Uncertain Road Ahead

Controlled by the Federman family (71%), Dan Hotels is a longstanding player in the Israeli hospitality industry. But as domestic tourism weakens and foreign tourism remains paralyzed, the group is struggling to regain traction.

The company warned that unless inbound tourism recovers significantly, it sees little reason to reopen shuttered properties or expect near-term financial recovery.