B&Bs skeptical of hotel compensation deal [pg. 17]

Guest houses in the North feel they got the raw end of the compensation deal for tourist-related businesses approved by the cabinet Tuesday, even as hotels in the region hailed the agreement signed by the Finance and Tourism ministries. "I'm not sure if the agreement is fair as we are not getting the same as the hotels or those guest houses within nine kilometers of the border which qualify for special compensation," said Benny Konwitz, owner of the Arbel Holiday Homes near Tiberias. "The situation has affected us in the same way. We've gone from overbooked to empty for the summer, since the violence erupted." The Tourism Ministry and Treasury announced Monday that hotels would receive compensation based on a calculation of 68% of the difference between incomes earned in July this year and the parallel month of 2005 and also would receive assistance for two months after the violence ends. The guest houses would receive 78% of the same equation extending for 21 days after the end of fighting. The decision will be presented to the Knesset before the weekend and is expected to be passed into law by the early next week. A Tourism Ministry official said the process would take a maximum of two weeks for the businesses to receive their compensation and that by August 20 the July payments would have been made. "There are still some questions we have such as what new businesses established during the year [which don't have last year's income to compare with] will receive. Or businesses that made extensions during the year," said Moti Elkabetz, manager of the tourism division of the Moshav Movement. There also were concerns that the 21-day compensation period for guest houses, compared to the 60 days received by the hotels, did not represent the reality of how the different businesses have been affected by the Hizbullah attacks. Arbel's Konwitz explained that the guest houses are generally family businesses, which rely on local tourists and now have lost their July - August vacation period due to the war. They generally don't see the foreign tourists who traditionally come the following season, he noted. "We have received cancellations for Rosh Hashana already," Konwitz said. "The tourists who will be arriving now to show their support will be coming as groups and generally stay in the hotels." A Tourism Ministry official believes, however, that once the war is over, the local travel market will recover far quicker than foreign tourism. "We expect Israelis to return to the North within a week or two, which is why we specified a shorter compensation period," the official said. The hotels, meanwhile, expressed their satisfaction with the agreement. "It is an excellent deal," said Eli Gonen, president of the Israel Hotels Association, which led the negotiations on behalf of the tourism businesses. "There's nothing missing from the agreement from our side."