Israel’s tourism industry has been severely impacted since the Hamas terrorist attacks on October 7, 2023. A sharp decline in tourist arrivals has resulted in a significant loss of revenue, pushing businesses to the brink. According to data from Israel’s Central Bureau of Statistics (CBS), the number of tourists plummeted from around 300,000 in September 2023 to approximately 89,000 in October. This downward trend continued in November, with visitor numbers falling to around 38,000.
The decline in tourism has had a dramatic impact on Israel’s economy. Tourism revenue, which was projected to reach record levels in 2023, dropped from around $1.4 billion in the third quarter to $464 million in the fourth quarter. The situation has worsened further in the first six months of 2024, with only 501,100 visitors compared to 2.1 million in the same period last year.
Several international airlines suspended flights to Israel following the Hamas attacks, with some cancellations continuing into the current year. This further exacerbates the situation for the tourism industry.
Businesses across Israel are struggling to cope with the decline in tourism. A business information company reported that as many as 46,000 businesses have been forced to close since the October 7 attacks. Hotels are facing a significant drop in international visitors, with many forced to adapt to a new reality. The Ramada by Wyndham Hotel in Jerusalem, for example, has seen a shift in its tourism mix, with a larger proportion of visitors now coming from Israel.
The Carlton Hotel in Tel Aviv has also been affected by the decline in tourism. While the hotel managed to make a profit in the first quarter of 2024, it has implemented cost-cutting measures, including reducing outsourcing and seeking cheaper suppliers. The hotel also provided free accommodation to war evacuees in 60 of its rooms, receiving compensation from the Israeli government.
The impact on the tourism industry is particularly evident for tour guides, who have had to adapt to a new reality, focusing on “grief tourism,” leading visitors to the sites of the October 7 attacks, as these are the only places in demand.
The situation in northern Israel is even more challenging. The ongoing conflict between Israel and Hezbollah, the Iran-backed militant group operating out of Lebanon, has increased tensions in the region. While the exchanges of fire have so far been confined to the border area, there is a risk of escalation into a wider war. The recent killing of a Hezbollah commander in Beirut further heightened tensions.
The conflict has had a significant impact on businesses in the Golan Heights, which is located near the Israel-Lebanon border. Mount Odem Winery, a family business, has been directly affected by the constant fire in the area.
While Israel has faced multiple crises in the past, including two intifadas and two Lebanese wars, the current situation presents unique challenges for the tourism industry. According to business information company CofaceBDI, as many as 60,000 businesses are expected to close in 2024.
The recovery of Israel’s tourism industry remains uncertain, and it will likely take time for the sector to fully recover from the impact of the Hamas attacks and the ongoing conflict with Hezbollah. The future of the tourism industry hangs in the balance as Israel navigates these turbulent times.
