Tourism to Israel in dire straits as 10 percent of hotels face total financial collapse

Despite Israeli threats of full-scale war, Lebanon is enjoying a strong summer tourist season

News Desk - The Cradle

View of the Herod's Palace hotel in Eilat, southern Israel. October 11, 2019. (Photo credit: Moshe Shai/Flash90)

About 10 percent of hotels in Israel are on the brink of financial collapse amid a sharp drop in occupancy rates since the start of the war on Gaza in October, Yedioth Ahronoth reported on 24 July.

The report, released by the Israel Hotel Association (IHA), covers the period from January to June 2024 and highlights the severe financial distress facing Israel’s tourism and hospitality sector. IHA represents 450 hotels nationwide, which together employ about 42,000 workers.

Hotels in some areas, including the Dead Sea and Eilat, only enjoy high occupancy rates because they are housing Israelis displaced by the war from the border regions near Gaza and Lebanon. Hotels and guesthouses along the northern border have been closed since the war on Gaza began 10 months ago.

“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.

Detauker added that the sector faces significant staff shortages and economic uncertainty, making planning for the future difficult.

The IHA report indicated that approximately 969,000 tourist overnight stays were recorded in the first half of 2024, an 81 percent year-on-year decline.

Occupancy rate drops were particularly large in areas commonly visited by foreign tourists, such as Jerusalem, Nazareth, and Tel Aviv.

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.

The occupancy rate for hotels in Jerusalem was 41 percent, a 37 percent decrease compared to last year, while Nazareth recorded a 33 percent 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 on 15 July 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.