President of Israel Hotel Association explains how tourism can increase

“Potentially, Israel is the classic tourist destination. We have everything a tourist desires. Israel is very small place, but our geographical diversity is immense."

Amir Hayek (photo credit: Courtesy)
Amir Hayek
(photo credit: Courtesy)
The global tourist industry is growing by leaps and bounds. The travel and tourism industry is one of the world’s largest, with a direct turnover of $2.3 trillion in 2016. This included accommodation, transportation, entertainment and attractions.
Worldwide, the industry has experienced steady growth almost every year. International tourist arrivals increased from 528 million in 2005 to 1.25 billion in 2015. By 2030, this number is expected to grow to 1.8 billion.
Global tourism is a huge industry, but Israel is lagging behind. In 2017, the number of incoming tourists amounted to 3.6 million. This was an all-time record for the country, with an annual increase of approximately 15%. However, compared to other tourist destinations such as Spain, Italy, Greece and Turkey, these are paltry figures. A rough breakdown of the incoming figures shows that some 1.5 million tourists were family-related and one million were business travelers. Bona fide tourists amounted to only 1.1 million.
In a talk with The Jerusalem Post, Amir Hayek, president of the Israel Hotel Association, agrees that these are paltry figures.
“Potentially, Israel is the classic tourist destination. We have everything a tourist desires. Israel is very small place, but our geographical diversity is immense. We have a ski resort in the far North; forested mountains in the Galilee and the Judean Hills; golden beaches and azure seas in central Israel; wide desert plateaus and highlands in the South; and the Red Sea resort of Eilat,” he says.
“In addition, it is an area saturated with historical and religious sites. There are biblical sites, such as the Temple Mount and the tomb of the matriarch Rachel; Christian shrines such as the Church of the Holy Sepulchre; and Islamic shrines such as al-Aqsa Mosque and the Dome of the Rock; not to mention the many attractions of a metropolitan seaside city such as Tel Aviv. With such assets, we should have many more millions of incoming tourists,” he asserts.
How many?
We need a comprehensive policy to increase tourism. Tourism Minister Yariv Levin is doing a lot to increase tourism to Israel and is achieving results, but we need more. In the short term, we must increase tourism to an annual five million at least. In the longer term, we should aim at 10 million plus.
Isn’t that a very steep, even unrealistic, figure? It amounts to much more than the population of the country.
No, why? In 2016, Greece had 24.8 million tourists – more than twice its population of 11 million. Spain had 75.6 million tourists as against a population of 46.4 million; while France, with a population of 65 million, had 82.6 million tourists. So you see, an annual 10 million tourists in a country of 8.5 million is not something out of the ordinary. On today’s global tourist scene, it is not a figure that is unattainable.
If you want to reach 10 million tourist a year, you need vast investments, especially in accommodation. No hotels, no tourism. But I don’t see entrepreneurs rushing to invest in new hotels.
Yes, if we want to increase tourism, we need large investments – in roads, airports, public transportation, attractions and, yes, in hotels. New hotels are being opened all the time, especially in Tel Aviv, but these are mostly boutique hotels – mainly historical buildings that have been converted to hotels. But if we want 10 million tourists a year, we must have much more. Currently, we have some 400 hotels, totaling 50,000 rooms.
Ten million tourists would require 100,000 rooms. Nevertheless, investors are wary about investing in hotels. They cost a lot of money to build, and investors want to ensure their investment.
The global tourist industry is one of the world’s most competitive. Israel has a lot going for it, but it faces a lot of competition. Current tourism is leisure tourism – the three S’s tourism of sea, sun and sand. This means that tourists are more interested in having a good time than in the classical tourism of visiting historical or religious sites or even scenic spots. Tourists still come to see such sites and natural beauty spots, but mostly as something additional to having a good SSS time.
From a religious and historical aspect, we are unique; but as an SSS destination, we have a lot of competition, such as Spain and the Canary Islands, Greece and Turkey. We want to compete, but we ask the government to allow us to compete on fair terms. Currently, hotels in Israel are competing on unfair footing in regard to the global leisure tourist market. We operate under regulations that create large overheads, making it difficult for local hotels to compete.
The government regulates the way hotels are administered. This includes factors such as kashrut and security arrangements. The government should remove most of these regulations; otherwise, the leisure tourist market in this country will not grow.
In this context, I also want to refer to the problem of Airbnb – private apartments that are rented to tourists. I have no objection to Airbnb as such, but I strongly object to the fact that while hotels are regulated, Airbnb can do whatever they like. While we pay taxes, both national and municipal, including VAT, they pay nothing at all. We know of people who have rented a large number of apartments on a long-term basis and are renting those apartments to tourists on a daily basis for very large profits. We demand that these Airbnb [rentals] be regulated in the same way or in similar ways as they are regulated in cities such as Berlin, London and Rome. And that includes paying taxes.
Is this a widespread problem?
Very widespread. In Tel Aviv alone, there are approximately 10,000 apartments available for rental to tourists. There are only 9,000 hotel rooms in Tel Aviv, so you can understand that this is a huge problem for us.
The number of incoming tourists is very much influenced by the security situation. As president of the Israel Hotel Association, do you have a say on this issue?
I most surely have a say in this matter. It is true that the number of tourists that come to Israel is very much influenced by the security situation. Consequently, it also has a bearing on the willingness of entrepreneurs to invest in hotels. But this is essentially a state matter, a matter of war and peace.
What we want from the state is a safety net which will compensate the industry when there is a decrease in the number of incoming tourists due to deterioration in the security situation.
I want to point out that this problem has been alleviated to a certain extent. When bombs go off in the streets of London, Paris, Berlin or Rome, the situation in Tel Aviv or Jerusalem seems less abnormal.
Most of the incoming tourists are from Europe and North America. What about encouraging tourism from the Far East in general and China in particular? You are surely aware that in 2017, the Chinese spent more on overseas tourism than any other nation.
Currently, the incoming tourism to Israel is heavily weighted in favor of Europe and North America. The Tourism Ministry is busy promoting tourism from East Asia and especially from China. As president of the Israel Hotel Association, I am all for it, but we must adapt ourselves to the needs of the Chinese tourist. This means that we must supply the necessary preferred entertainment facilities; and there is a need for Chinese-speaking tour guides, Chinese-speaking staff in the hotels and Chinese-oriented cuisine.
But above all, the Bank of Israel must approve the unique payment methods that prevail in China.
Increasing incoming tourism will require outlays of billions. Perhaps this money should be better invested in other sectors, such as hi-tech or agriculture.
I strongly believe that large investments in the tourist industry in general and in hotels in particular will yield excellent returns. We are a modern economy, and modern economies are diversified. Modern Western economies are also service-oriented, and tourism is a service.
Tourism also yields good dividends, both economic and political. Tourism generates an annual turnover of over NIS 20 billion. And it employs approximately 200,000 people, of which 42,000 are directly employed in hotels.
And tourism promotes Israel. Each and every satisfied tourist is an excellent ambassador. It is the best PR possible. And if there is a country that is in need of good PR, it’s Israel.