Hoteliers had great 2010, but wary of future

2010 expected to end with nearly 3.5 million incoming tourists, an all-time record; Tel Aviv hotels averaged 74% occupancy.

By RON FRIEDMAN
Tel Aviv Hotel 311 (photo credit: MCT)
Tel Aviv Hotel 311
(photo credit: MCT)
The Israel Hotel Association’s year-end report released Monday says that 2010 was a booming year for the country’s hotels, but also points to severe problems that threaten to hamper its continued success.
According to the report, 2010 will end with 3.4 million tourist entries into Israel, an all-time record. Some 2.4 million of them chose to spend at least one night in one of the country’s hotels, and 600,000 were day visitors.
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The year is expected to conclude with 21.5 million nightly hotel stays, 11.6 million by Israelis and 9.9 million by foreign tourists – an increase of 22% from 2009.
The average occupancy rate in Israel’s hotels in 2010 stood at 66%, with Tel Aviv hotels leading the way at a 74% average occupancy rate, followed by the Dead Sea with 73%, Eilat with 69% and Jerusalem with 68%.
The year also saw a record number of workers employed by the sector, with 33,000 Israelis employed in the hotel industry this year, earning an average monthly salary of roughly NIS 6,400.
The numbers add up to a record NIS 8.1 billion in hotel proceeds for the year, and NIS 4.4b. in the state’s coffers, compared to NIS 3.3b. in 2009.
The association’s directors attribute the tourism boom to the relative calm in the region as well as to the Tourism Ministry’s increased marketing budget. But they warn of ongoing neglect in other areas and difficulties in erecting new hotels.
“On one hand, we see the increase in Israel’s marketing budget due to the vigorous work of the tourism minister and his staff, which resulted in record-breaking numbers and a blossoming of the industry,” said association president Eli Gonen. “But on the other hand, we see injury to hoteliers with the passing of the capital investment encouragement bill and untamed increases in municipal taxes on hotels.”
Gonen said that if the Finance Ministry succeeded in getting the capital investment encouragement bill without including incentives to hoteliers and other tourism operators, Israeli investors would prefer to invest in projects abroad.
He also said that Eilat’s recent decision to increase municipal taxes on hotels by 30% would harm the hotels’ ability to compete.