Israeli tourism: Great potential and what to do with it

The notion of taking a vacation in Israel has blossomed from solely being a political statement into a smart, hip destination for world travelers.

Floating in the Dead Sea (photo credit: MARC ISRAEL SELLEM)
Floating in the Dead Sea
(photo credit: MARC ISRAEL SELLEM)
Israel is no longer the barren tourism backwater that your grandparents used to visit out of a sense of duty.
During the first few decades of its existence, busy fighting for its survival and subsisting on a seemingly endless array of white dairy products of every consistency and percentage, there wasn’t much thought, money or time to develop an Israeli tourism industry.
The only steady stream of tourism derived from American Jews, who probably would rather have been lounging poolside at a Bahamas resort. But whether out of a sense of admiration and pride at the burgeoning Jewish homeland, or a sense of guilt and obligation to support that homeland without making the sacrifice of aliya, they dutifully took their abuse from surly El Al staff, traipsed around Masada in the stifling heat, and futilely looked for the one restaurant in Jerusalem open after 8 p.m.
Another tourism stream based on a similar emotional link to the land and its people developed with the emergence of the Christian Zionist movement and pilgrimages to the Holy Land.
Grateful that any tourists were braving the uncomfortable and expensive transatlantic flights, primitive accommodations and underdeveloped attractions, the local tourism industry remained in its infancy for far too long.
But almost imperceptibly – and often organically from the inside out – the notion of taking a vacation in Israel has blossomed from solely being a political statement into a smart, hip destination for world travelers.
The barely edible kibbutz dining room food has been shunted to its deserved far corner in favor of world-class culinary delicacies, and service is no longer a dirty word.
Ethnicity is in, and tourists no longer require an emotional connection to spend their hard-earned money on a vacation to Israel. Maybe that’s why a food writer for Forbes recently gushed about the vibe she discovered here in a story titled “Why Israel Just Might Have the World’s Best Restaurant Scene,” which manages to touch on attributes of the country that go way beyond the kitchen.
Gift shop in the Old City of Jerusalem (photo credit: MARC ISRAEL SELLEM)Gift shop in the Old City of Jerusalem (photo credit: MARC ISRAEL SELLEM)
But the costs
There is, however, the slight problem of costs. Israel is known for its high cost of living, and tourism is no exception.
But the Israeli tourism industry is finally beginning to think out of the box as it starts to stand on its own feet.
According to figures released last month by the Tourism Ministry, 2016 marked a 3.6% increase in incoming tourism from the previous year with 2.9 million tourist entries. On the surface it may seem to be a modest gain, but each and every tourist that arrived was fought over using increasingly sophisticated methods of marketing that deployed to battle the innate obstacles of attracting tourists to Israel.
According to veteran Jerusalem-based travel agent and tour operator Mark Feldman, the double whammy that prevents the local tourism industry from exploding in a good sense is security and cost.
“There’s a security issue here, there’s no other way of looking at it,” said Feldman, adding that even in its geography, Israel is guilty by association.
“For the vast majority of European or North American travelers, Israel is another Middle Eastern country. And when there are problems in the Middle East, like a war in Syria, tourism here is affected.
“When you add to that the security factors long built into the country, be it missiles, suicide bombs, terrorist attacks… it only adds to the perception that security is a problem here. For that reason, we’ll never be able to attracts tourists like Greece or other countries in the Mediterranean.”
But even if peace broke out tomorrow and security was no longer a factor in keeping Israel off the shortlist of desired vacation locations, another issue that cuts into Israel’s tourism market is the cost of spending a holiday here.
“There has been some progress here, and the government can point to a major achievement – the Open Skies policy which has enabled low-cost carriers to fly to Israel from Europe. As a result, it’s become incredibly inexpensive for tourists to fly here, primarily from Europe, but it also extends to North America, South Africa and the Far East,” said Feldman, adding that many carriers now offer flights from Europe to Israel for as little as €100.
“However, what hasn’t changed is the prices of hotel rooms – prices that rival hotels in London and New York and not countries in the Mediterranean that we should be competing with. It should be our biggest problem that tourists can’t get those $100-a-night rooms because they’re all booked up. They can’t get them because they don’t exist!” With Israel’s hotels averaging a 67% occupancy rate in 2016, Feldman suggested that lowering the cost of rooms could boost the rate significantly.
That rate is comparable to most Western countries, but it factors in the close-tocapacity rates during peak seasons like summer and holidays with the much lower rates in the winter and off-seasons.
“It’s embarrassing that I have to write a letter to a client saying, “I’m sorry Mr. Cohen, to tell you that the hotel you wanted is $350 a night. And that actually happens and it’s the single biggest turnoff for potential tourists. The price per person to stay in Israel is far more expensive than going to Spain or Portugal, let alone Greece.”
 A tour guide with his group in the Old City of Jerusalem (photo credit: MARC ISRAEL SELLEM) A tour guide with his group in the Old City of Jerusalem (photo credit: MARC ISRAEL SELLEM)
A plan?
Sitting in his office in the Knesset, Tourism Minister Yariv Levin tackles the challenges with a combination of enthusiastic verve and businesslike analysis. An attorney by profession, Levin has stood out since entering the Knesset as a Likud MK in 2009 for his serious work ethic, one he has carried over since being appointed tourism minister in May 2015 after the last elections.
“It’s not a ministry that has traditionally been coveted, but I am really happy to be here,” he says. “The tourism field in Israel has amazing potential, we have just about anything you can think of, including excellent weather, the history, the religion, the sites like the Dead Sea and the desert, and the ability to speak many languages,” says Levin.
Levin says that part of the problem is that tourism had long been a neglected industry.
“That could be the result of the constant and dizzying revolving door of tourism ministers, a very low budget that didn’t allow any real progress to be made, poor employment conditions for ministry personnel and many other problems.”
In relation to the general high costs he says, “There are some factors in the cost of hotel rooms that can be changed and some that can’t.
“The ratio between the number of rooms and the number of workers in hotels is almost one-to-one – meaning that if you have 200 rooms, you need about 200 workers to run the hotel. It’s a significant cost because the minimum wage here is higher than most countries – 10% higher than Spain, almost double that of Greece and five times the wage in Jordan.”
Among the accomplishments that he ticked off that have resulted in a rise in tourism are drastically streamlining the visa application process and costs for tourists from countries like China and India, and providing incentives for small airlines like Ryanair and Wizz Air to begin flying to Israel.
Levin also pushed through the Hotels Law, a proposal that defines hotels as national infrastructure and that would be approved in a faster and simpler procedure in the National Infrastructure Committee. This should lead to a shortening and simplification of hotel planning and construction that is also supposed to see the ultimate lowering of hotel room costs for the consumer (on environmentalist protests against the plan see box).
“In Israel, building a hotel has been an impossible task of bureaucracy,” says Levin. “There are no three-star hotels in the center of the country, there are no motels, there are no hostels for younger travelers. There are simply no alternatives for the audience that looks for it.”
Such a variety will enable tour operators to offer different packages to a varied cross-section of tourists, as Levin explains, and will help boost the annual occupancy rate with incoming tourism in the non-peak seasons.
“It’s absurd to tell a tourist, ‘Come to Israel, it will cost you only $100 to fly here from Europe but your hotel room will cost you $350 a night.’ The hotel law is the first serious attempt to address the cost, and it will result in hundreds of hotel rooms of all varieties and prices being built in the coming years.”
Eternal concerns
Even if the cost of spending a vacation in Israel is reduced by the new legislation and deregulation spurred by Levin, the uphill battle remaining is how to overcome Israel’s longstanding image as a place of danger and security risks.
According to Levin, his feelings on tourism in the era of terrorism have evolved since taking up his post.
“Once, if there was a big terrorist attack or a major clash between Israel and Hamas or Hezbollah, my instinct would have been to say, ‘Stop the promotional campaigns – why would someone want to come to Israel now?’ “But I came to change my mind quickly. Now I say, ‘Increase the promotions, even in the face of terrorism.’ What’s clear is that if you’re inconsistent and feel that you only have a good product part of the time, then you won’t succeed.
“The correct message is to say, ‘Yes, there’s terrorism, but it’s still safer in Israel than in Rio or Paris. The most important thing for travelers is personal safety, and here it is on a very high level.
If you choose any place in the world to go to, you won’t be safer than in Israel.’” “The other message that you’re broadcasting to travel agents and other tourism professionals is that you’re not disappearing, you’re building dependability, continuity and consistency.”
Israel is no longer being marketed only for its historic and religious aspects to the tried-and-true Jewish and Christian tourists, but is now going head-to-head with other Mediterranean and European countries as a luxurious destination with great weather, beaches and food.
LAST YEAR, most people traveling to Israel still originated in the US – 648,310 American tourists entered the Jewish state, 5% more than in 2015 and 8% more than 2014’s figure. But at the same time, there was a huge jump in tourism from less likely locations: China (+69%); Croatia (+62%); Belarus, Latvia and Georgia (+41%) and the Philippines (+ 27%).
The use of non-traditional means of promoting the country is on the rise.
Israel’s first-ever tourism advertising campaign in India amassed more than 11.7 million views on YouTube.
These tourists, unlike those from the West, don’t really have the safety quotient on their minds first and foremost and instead are looking for a unique traveling experience.
“My Chinese tourists and agents have never once asked ‘is it safe there’?” said Feldman. “They’re not really following the security situation in the region.”
“The awareness of Israel is growing,” says Levin. “Look at the small travel agents who have never pushed Israel before. A couple of customers say to them ‘I saw Israel on Expedia, what about that?’ and they start thinking that maybe there’s a new trend out there and they start marketing it.”
Old City of Jerusalem (photo credit: MARC ISRAEL SELLEM)Old City of Jerusalem (photo credit: MARC ISRAEL SELLEM)
ACCORDING TO tourism expert Shahar Shilo, Israel has had to play catch-up in the tourism field after decades of neglect.
“We’ve had years of emphasis on defense and developing our hi-tech fields that have helped make us an economic superpower, but tourism isn’t something that has ever been developed or invested in to the same extent,” he told the Post as he led a group of tourists on a hike in the Negev.
Shilo, the former head of the national Tour Guide Course run by the Tourism Ministry, is a lecturer at Ben-Gurion University on international tourism and a specialist in heritage tourism who is writing his PhD on the City of David.
Shilo rejects the commonly held theory that security and cost have stunted Israel’s tourism potential.
“For most tourists, the most dangerous thing about vacationing in Israel is the drive to the airport from your home,” he said.
“Egypt is way less safer than Israel, and its public image is worse than Israel’s, yet last year it had over 9.5 million tourists, more than three times that of Israel. So excuse me, but safety is not the main problem.
“Israel is way safer than most countries – the reaction time here during a security event is 15 seconds to two minutes.
Most events are over in two minutes. Do you know how long the airport attack in Turkey last year [Atatürk Airport, Istanbul, June 28] lasted for? In Israel, you could have flown abroad and come back in the same time.”
“It’s the image of Israel as an unsafe place that has to be dealt with. We’re suffering from a geopolitical invention.”
Shilo answered the claims of high hotel prices by citing a different problem facing Israel’s tourism sector – segmentation.
“Fly to the Persian Gulf and try to get a room for under $900. Yet the occupancy rate is amazing [hovering around the 80% mark over the last few years]. Why? Because there is a segment of the population for every price.
“If Israel has high prices, then it should find a tourist segment that can pay those prices. Price are not an Israeli problem, the segment you are marketing to is the problem,” added Shilo.
“We can’t ever give up on the pilgrimage tourists, but that doesn’t mean we can’t look for other segments who can pay much more and leave more money here. There are around 400,000 business tourists coming to Israel every year and it’s really an excellent field of tourism that should be further developed.
Shilo cited the paltry sums going to marketing Israel as a chief culprit in its ability to attract tourists.
“Twenty-five years ago Turkey and Israel had roughly the same number of tourists – about 1.2 million. How can it be that they ended up last year with 40 million tourists and we had three million? “The same goes with Germany – 25 years ago no European wanted to travel to Germany, it was the most hated country in Europe. They had maybe a million tourists – how did they go to 30 million last year? WHETHER 2017 and beyond will witness a continuation of the positive trend in tourism to Israel is largely dependent on outside factors, most predominantly the volatile neighborhood. But barring a prolonged skirmish or a new wave of terrorism, the inroads made should be solid cornerstones for further growth in the years to come.
Shilo said that the possibility of Israel attracting four million tourists a year is not a figure out of reach. “With our local infrastructure, we could handle up to that number of tourists, but beyond that we would have a problem. That’s our narrow window, and I would pray for that – to see four million tourists coming to Israel in my lifetime,” he said. To accommodate more than that, Shilo said, major infrastructure projects would have to be initiated.
Infrastructure challenges, huge jumps in quality and major exposure efforts aside, Israel will always retain its own X-Factor that most prime tourist destinations don’t have to deal with.
“The product here is excellent. It’s not like in the old days when the service and the facilities weren’t good. Our product stands up to the level of any major tourist destination,” said Feldman.
“But when four soldiers are killed at a Jerusalem tourist destination and it’s all over the media, the Western tourist is going to say. ‘Next year in Jerusalem.
This year let’s go to Italy.’”
Green reservations over the ‘Levin law’
There were a number of protests against the law by environmental groups that were and still are alarmed that Israel’s Mediterranean coastline could become a vast construction site with limited public access, and that the plan would favor tourist-focused development over environmental concerns.
Called Tama 35, the national master plan is meant to guide the country’s spatial development for the next two decades, balancing development needs with the preservation of open spaces. The ‘Levin Law’ element of the plan, which aims to simplify the approval of hotel building permits in order to lower hotel prices, gives hotels “national infrastructure” status and transfers approval for hotel projects to the Finance Ministry’s National Planning and Building Committee.
New hotels will be permitted to sell 20% of their rooms for residential housing, subject to approval by “local, independent councils.”
The final version of the amendment stipulates that the allowances for residential construction do not apply to the shoreline, and mandates that construction plans occurring between 100 meters and 300m. from the coast receive the approval of both the Committee for the Protection of the Coastal Environment and the relevant regional planning committee.
However, environmentalists have expressed fears that the plans would still threaten Israel’s beaches.
Zionist Union MK Yael Cohen-Paran lambasted the plan for attempting to “bypass coastal environmental protection laws in the guise of advancing the country’s hotel industry.
“The changes in the final version of the law after the pressure we invoked are certainly better for the environment than they were,” she told The Jerusalem Post Magazine, “There won’t be building on the beachfront area, which was their original intention, but the law allows hotels and private residences to be built between 100m. and 300m. from the coast, and that’s still very problematic.”
The Society for the Protection of Nature in Israel lamented that “Israel’s beaches are being sold to the highest bidder.
“Once again, the Knesset has failed to protect one of the properties most important to the Israeli public,” SPNI spokesman Dov Greenblatt wrote.
According to Levin, the law preserves the authority of the planning institutions to prevent uncontrolled construction along the beaches.
“The policy of the Israel Tourism Ministry is clear – we will not allow hotels to be built that damage the shoreline, as was the case until now. The program has one objective – to reduce vacation costs once and for all,” he said.
Michelle Malka Grossman contributed to this report.