First quarter tourism revenue sinks to 5-year low

Tourism is still reeling in the aftermath of the 50-day war with Gaza last summer.

Tel-Aviv Beach
Revenue from tourism slumped to a five-year low in the first three months of 2015 as the industry continued to reel from Operation Protective Edge and a weak ruble made it more expensive for Russians to visit, the Israel Export & International Cooperation Institute said Monday.
Tourist revenue in the first quarter dropped 15 percent from the first three months of 2014 to NIS 1.2 billion, IEICI said, indicating that similar drops were registered in the last half of 2014.
In absolute numbers, the Institute said incoming tourism fell 16% from around 705,000 in the first quarter of 2014 to 593,000 this year.
Meanwhile, the Central Bureau of Statistics on Monday estimated tourist revenue at NIS 1.8 billion in current prices for the quarter, a drop of 12 percent from a year earlier. Hotel stays by tourists declined 27.4%, while those by Israelis increased 9.4%, CBS said.
The industry is still reeling in the aftermath of the 50-day war with Hamas last summer, which saw a constant stream of rockets and red-alert sirens, as well as a temporary halt in most foreign air traffic when a rocket landed near Ben-Gurion Airport. The economic crisis in Russia, which has demolished the value of the ruble, has made shekel purchases by incoming Russian tourists 50% to 100% more expensive than they were just two years ago.
A Bank of Israel study in March said tourism was the sector hardest-hit by military conflicts and estimated that revenue in related businesses (hotels, restaurants, airlines and the like) generally do not fully recover until a year after the conflict. The report estimated that Protective Edge cost Israel NIS 2 billion in tourism in 2014, accounting for more than half of the NIS 3.5 billion in economic damage the war was estimated to have caused.
The news was not all dire, however, as IEICI economist Itai Zohari said the decline in tourism and other exports was likely a deviation from a multi-year trend of growth.
Also, according to CBS data released Monday, the number of tourists in the first quarter increased 8% from the fourth quarter of 2014, and the number of hotel jobs increased 4% year-over-year.
In response, the Israel Hotel Association said the upkeep of staff would not be sustainable, and requested increases to the Tourism Ministry’s budget for advertising.