The year 2023 was promising. Hotel occupancy was up and an expectation to serve 3.9 million tourists this year was encouraging.
The reality of the last horrific week made those hopes evaporate. While missiles are being launched towards metropolitan Tel Aviv and airlines are canceling flights, the hospitality industry faces another crisis.
The period after the High Holy Days is considered crucial for hotels. Business travelers, conventions, and delegations are the “bread and butter” of the industry during fall season.
“October, with the flourishing Sukkot tourism, was expected to be the best month ever for our hotel since it was opened almost 10 years ago,” says Avner On, general manager of Waldorf Astoria Jerusalem. “The coming quarter was exceptionally promising and with a blink of an eye the emerging war took us by surprise.
“This sudden drop to almost an empty hotel while we manage maximum staffing, trained for months to come, is dramatic. It will take years for the hospitality industry to recover.
“Both individual travelers and convention planners need time to calculate their plans. And in Israel this timeline is crucial. I am positive however that once the war will be over a significant number of Jewish delegations will visit Israel to demonstrate support.”
Dan Hotels became the first among the public Israeli hotel brands to comment on the situation in a report to the stock exchange on Wednesday.
“The security situation is expected to have a substantial adverse effect on the company’s business results in the fourth quarter of 2023, compared to the corresponding period last year. At this stage the company is unable to estimate the extent of the impact due to the uncertainty regarding the duration of the situation.”
For hotels to find enough staff to deliver appropriate service while 300,000 Israelis have been recruited for active reserve service in the IDF is a challenge, says Israeli tourism expert Joseph Fischer, with 40 years of lodging experience working for leading international brands.
“Even maintaining a proper food chain supply during the war, which is expected to take weeks, isn’t going to be easy. Numerous hotels are hosting tens of thousands of evacuees from the kibbutzim, towns, and cities surrounding Gaza. This by itself is not a simple task”, he says.
Fattal, the biggest Israeli brand with 48 hotels nationwide, led the way by demonstrating unity, hosting civilians evacuated from the war zone areas in southern Israel.
“Most of our hotels are full with these families in this hour of need,” says Adva Melamed-Levi, a spokesperson for Fattal Hotels.
Numerous additional Israeli brands have followed suit.
The COVID crisis is still fresh in the minds of travelers, in general, and the hospitality industry, in particular. More than two years were needed to recover. The struggle to recruit professional staff is still the first priority for struggling hotels. The war is a major blow to those efforts and this might be the long-term challenge for the industry.
“Gathering employees, training them, and turning them into a professional team at our hotel, opened after COVID in an environment of distrust to the hospitality industry, was an enormous assignment,” says Yuval Pomerantz, director of human resources at David Kempinski Hotel Tel Aviv.
“We recruited young employees from the local market and abroad and nowadays we are facing uncertainty. Team members from other countries will leave and the rest will be forced to go on vacation till their annual leave days will terminate. There is no guarantee they will stay in hospitality. We plan three weeks ahead and we will certainly know better in November,” he says.
The Israel Hotel Association is already on alert. A call for the furlough regulations that were applied during the COVID crisis is being called for.
“Numerous hotels already closed their doors. We started to think about the day after and what to do. A flexible workforce is required in the hotel sector where there is a gap between the occupancy of the hotels on weekends and during the middle of the week. This will allow us to employ the employees on the weekends but keep them also during the week on the days when there is not much work in the hotels,” said Yael Daniely, head of the association, during discussions with officials of the Tourism Ministry.
Avner On believes hotels should do everything possible to keep their employees.
“The hospitality industry might not be attractive again after the war. We must do everything possible to keep the force within the hotel, otherwise we might lose them permanently,” he says.
This crisis will definitely spread regionally.
“Israeli hotels are suffering, but so will our neighboring countries, especially after the incident in Alexandria, Egypt, when two Israeli tourists were killed,” says tourism expert Fischer.
“Greece, Turkey, Cyprus, and the Sinai hotels in Egypt will definitely have negative effects on their tourism, as they are heavily dependent on Israeli tourism. This war will have a major effect.”
The writer is the Travel Flash Tips publisher.