Tourism Slump in July Raises Concerns for Israeli Hotel Industry

The tourism industry in Israel experienced a disappointing July, with the Hotel Association expressing concerns about the implications of the downturn. Contrary to the traditionally bustling summer season, data from the Central Bureau of Statistics (CBS) has revealed an 11% decrease in overnight stays compared to the same period in 2022, and a 9% drop compared to 2019.

One of the hardest-hit areas was the resort city of Eilat, where overnight stays plummeted by a staggering 48%. Notably, this decline has extended beyond international tourists, impacting domestic travel as well. Experts suggest that high living costs within Israel and elevated hotel prices, among the world's highest, may have contributed to this trend. Israelis may be opting to vacation abroad, seeking more affordable destinations.

In terms of specifics, foreign tourist overnight stays in July numbered approximately 713,000—a sharp 18% decrease compared to the peak year of 2019. Meanwhile, 1.6 million overnight stays were accounted for by Israelis, reflecting a 10% decrease from the previous year and a 5% drop from 2019. The overall tally for overnight stays across all hotels totaled around 2.3 million—a decline of 11% from 2022 and 9% from 2019. National room occupancy rates in July fell to about 62%, down from approximately 72% in both 2022 and 2019.

Apart from Eilat, other cities also witnessed more substantial declines than the average. Netanya saw a 46% drop, Herzliya 35%, the Dead Sea 32%, Haifa 31%, and Tiberias 22%. Popular tourist destinations like Jerusalem experienced a 16% decrease, Nazareth 12%, and Tel Aviv 9%.

This downward trend is not limited to July alone; the first half of 2023 reflected an 18% decrease in tourist overnight stays compared to the same period in 2019. However, domestic tourism experienced an opposing trend, with Israeli overnight stays reaching 8.3 million—a 10% increase from the prior year. The cumulative count of overnight stays amounted to 14.1 million, down approximately 4% from 2019. In the same period, around 5.75 million Israelis traveled abroad, while only 2.24 million tourists chose Israel as their destination.

In response to the situation, the Hotel Association emphasized the need for a substantial marketing effort to revitalize incoming tourism. They expressed the urgency to target European markets and tap into Asian markets as well. While the results for the latter part of the year remain uncertain, the focus of marketing endeavors has shifted to 2024 in hopes of charting a recovery course for the industry.