How can seasonal businesses survive with tourism hit by the pandemic?

“My childhood friend, Doron Oz, and I set up Funtom in 2014, with the help of Doron’s brother, Amichai. We provide exciting and challenging outdoor-style experiences for events. The activities are appropriate for companies and organizations, because they combine completing tasks with teamwork and bonding—bike rides, climbing walls, IDF prep obstacle courses and more. We also provide solutions for the big tourism agencies, with off-road vehicles and jeep trips and military activities with uniforms and weapons—which tourists go crazy for. That target audience of international tourists is one that we’ve been missing for the past year and a half.

During the first lockdown, our activity went from a hundred to zero. We furloughed our staff, and eventually reached a realization that we would have to reach out to private customers and not only institutional ones. We covered every inch of the north in an attempt to find a glamping site, like a five-star campsite. We thought that would be a good solution during the pandemic, when hotels were shut. When we met the head of the Emek HaYarden Regional Council, Idan Greenbaum, he sent us to Kibbutz Kinneret and said they might have land with potential, at the place where the Sea of Galilee spills back into the Jordan River. The people in the kibbutz weren’t overly excited about the glamping idea, but they said they would be happy for us to open something with engaging activities that draw in visitors.

So we decided to do what we do best, and in early June we opened an extreme park with Ninja Warrior obstacles, zipwires, rope bridges and climbing walls, all with the highest standards of safety. At this point we added two partners—Tal Hamimi, my brother-in-law, who manages the park, and our childhood friend Yakov Shimon, who takes care of the marketing. The park is still in the testing phase, and the level of interest has already been incredible. We have big plans for the park and for encouraging tourism around the Sea of Galilee. Among other things, we want to integrate water sports such as stand-up paddleboards and kayaks, and to turn the site into a paradise for families who will be able to stay there for a few days and have everything they need without needing to leave the complex.”

“I founded Kisuski Water Sports in 1998, and it is one of the largest companies in Israel in this sector. I set it up together with my brother and business partner, Shai. We have an exceptional officially recognized beach with water sports for kids and grown-ups, including motorboats for self-hire, kayaks, paddle boats and banana boats, waterskiing, tubes, crazy-sharks, wakeboarding, wakesurfing, parasailing, and jet skis for fans of extreme sports. At the peak of the tourist season, we employ more than 30 workers, including at-risk youth who join us after school hours as part of a joint project with the municipality.

“COVID-19 hit Eilat badly, because alongside the first lockdown which brought us down to zero activity, the city was also struck by a storm that destroyed the beaches and the marina and caused millions of Shekels worth of damage. We furloughed the workers we wanted to keep and topped up the partial wages they received from the State. Professional staff, such as skippers, cooks and waiters are difficult to find, and it’s important to hold on to them for the future. After the first lockdown, Eilat experienced one of its best summers of all time, partly because Israelis had to stay in the country.

“As a member of the municipal tourism committee, I was part of an attempt at one stage to turn Eilat into a ‘green island’, to allow those who provided a negative test result to enter the city. It could have resulted in a city clean of COVID-19, with businesses and institutions able to return to business as usual. But then the third lockdown came, along with the vaccination program, and the state decided to prioritize the ‘green tag’ protocol.

“Since the end of the third lockdown, the situation has improved and tour groups have started to return for the first time since the pandemic began. This summer, Eilat has been packed full of families and young people, and we are all hoping there will not be another lockdown over the Tishrei holidays this year. At the same time however, Ramon Airport is currently closed to vaccinated foreign tourists, so there are still concerns about a lack of winter tourism for the second consecutive year.”

“Attractions that run primarily during the summer months, and especially water sports, are seasonal businesses. Therefore, the owners of these businesses must keep a constant and personal eye on things all year long and be careful not to fall into some of the common traps. The first and perhaps the most important of these is dropping the ball on regular cash flow management throughout the whole year in line with the annual activity forecast. Business owners must not allow themselves to think that high revenue during the summer months is representative of the other months and allow themselves to rely on their bank balance to see them through. Rather, they should set aside their revenue for the months in which there is almost no activity.

“The second trap to avoid is poor day-to-day management of the business’s resources. Seasonal businesses must ensure smart management of their resources. For example: how do you retain experienced personnel during the weaker months? How do you ensure the necessary stock levels throughout every period of the year? A failure in this aspect of running the business during the quiet months can cause critical damage to the customer service and the image of the business during the most important periods of the year. That is why it is important to exploit the weaker months to develop infrastructure and projects to ensure long-term development of the business.”

“As a city dependent on tourism, Tiberias is noted for the seasonal nature of its business activity. Tourism is primarily a summer industry in the city. 

To ensure cash flow during the winter months, when there are not many visitors to the tourist attractions, consider offering incentives to summer tourists to encourage them to return to the city. For example: discounts, offers and coupons, with unique value propositions for the winter months, when there is a significant downturn in domestic tourism.

“The key to success and creating continuity in business activity through periods of crisis and uncertainty lies in proper use of marketing tools, creative thinking and being proactive. 

That is why it is very important to prepare from a cash flow perspective for times of change and uncertainty, which will open up additional sources of funding for the necessary steps.”

As the economy continues to tackle the challenges resulting from the pandemic, Ma’ariv and Bank Hapoalim are running a special feature, sharing and following stories of businesses in different regions and sectors and offering insight and support in coping with the current crisis and uncertainty. Every week, we will share practical tools, as well as offering insight and guidance into opportunities for financial and business development and growth in this challenging environment. The information contained herein is accurate as of the day of publication and should not be understood as an alternative to professional consulting services that take into account the specific circumstances of the individual and are tailored to meet their needs. The aforementioned should not be understood as an offer for credit, loan provision and/or deferred repayments, subject to the terms and conditions and approval of the bank. Inability to keep up with payments may incur charges on interest in arrears or repossession proceedings.