Is Israel's tourism recovering or will it remain in a slump? - comment

With the expected decline of the Omicron wave and the hopeful lifting of restrictions in various countries, there is a reason to be optimistic.

 The David Kempinski hotel in Tel Aviv. (photo credit: Kempinski Hotels)
The David Kempinski hotel in Tel Aviv.
(photo credit: Kempinski Hotels)

A further delay in the opening of the David Kempinski luxury hotel in Tel Aviv from February to mid-March was just announced. An overwhelming message that indicates the growing distress among hoteliers in the non-stop city.

Considering the fact that construction began in 2013, this is without a doubt one of the biggest delays in opening an international hotel in Israel, ever.

However, the general managers, in charge of the operation of the hotels in Tel Aviv, have long been walking on high-rise glass tiles. Just like in the addictive Korean series The Squid Game: One wrong step and the thin glass will break.

Tel Aviv is the icing on the cake of the profitability of Israel’s hospitality industry. The sky high figures of 2019 with peak occupancy in the city’s hotels, which stood at 76%, represent 3.85 million overnight stays. International hotel chains understand the great potential for overnight stays in the world’s most expensive city and so far are showing patience – even with a dramatic 93% drop in the number of tourist overnight stays in 2021 with an annual occupancy rate of 28%.

 Tel Aviv is getting a new luxury hotel. The David Kempinski Tel Aviv will open in February 2022, the global hotel chain said Wednesday. (credit: Courtesy) Tel Aviv is getting a new luxury hotel. The David Kempinski Tel Aviv will open in February 2022, the global hotel chain said Wednesday. (credit: Courtesy)

Behind the scenes, the clock is quickly ticking toward the most important deadline of all - April 15, Seder night. Passover has been the most important source of profit for Tel Aviv hotels for decades. Inbound tourism at its best. Room prices are at their peak and a requirement for a minimum stay of multiple nights is legitimate.

With the expected decline of the Omicron wave and the hopeful lifting of restrictions in various countries, there is a reason to be optimistic. But the real and most important struggle of all is not over incoming tourism, but over staff. 

Guy Klaiman, general manager of the Kempinski Tel Aviv, says that one of the main reasons for the postponement of the opening is a shortage of quality manpower. This is definitely the heart of the matter.

Klaiman, one of the most experienced hoteliers, who has opened numerous luxury hotels in London and Jerusalem, knows best of all. Without a fully manned, professional, skilled and motivated workforce, a quality product cannot be provided.

His condition may in fact be easier. He will be able to continually postpone the opening of his hotel, as it hasn’t yet opened. 

The challenge of his competitors is seven times greater. Many workers have abandoned the industry, which has been in distress for nearly two years. In order not to lose the loyal, dedicated and diligent workers, veteran hotels in Tel Aviv continue to employ them even though the guestrooms are empty.

It is no longer possible to put them on furlough or to work fewer days for reduced pay. The Finance Ministry grants certainly help. 

But in most junior and manpower-intensive positions, which also rely on manpower companies, the challenge is greater. These employees are less loyal and are not considered true team members. Therefore the big hotels’ search for staff, while maintaining the good ones with the constant fear of losing them for the benefit of the competitors, is massive.

Now is the money time. Passover is just around the corner. Recruitment sites such as AllJobs and hospitality groups on social media are flooded with job ads for Tel Aviv hotels. Cooks, maintenance personnel, security, operations. Anything and everything.

But how do you motivate a talented young cook to work in your mega-room hotel when tourists are not coming? Klaiman has postponed the opening, but will he find what he is asking for by mid-March, just a month before Seder night?

Mark down “The Kempinski Index”: If the hotel opens its gates for guests in mid-March we will know that the tourism industry is on the road to an encouraging recovery. If the opening is postponed again, then it will be evidence of another gloomy slump for the industry.

The writer was, until recently, spokesman for Hilton Hotels in Israel.