The Summer Of Their Discontent?
A combination of lower airfares and a variety of incentive deals for cash-strapped foreign tourists has most probably saved the Israeli hotel industry from one of the worst Passover seasons in recent memory.
But the extra effort to lure foreign tourists to Israeli hotels for nine- and 10-day holiday packages, which like Sukkot account for a significant portion of annual profits, seems to have come at the expense of marketing the annual summer excursions.
The incentives to attract foreign tourists for Passover varied from hotel to hotel. For instance, the Azorim Hotels chain, which has a selection of well-known four- and five-star hotels in Jerusalem, Tiberias and Dead Sea, is offering free seder meals to tourists who purchase Passover package deals. In past years, many hotels in Israel charged up to $200 extra per person for a lavish seder feast.
“The global downturn obviously had an effect on bookings for Passover, although I believe we will be less affected than other hotels in the area,” said Joanne Odes, the spokesperson for the five-star Inbal Hotel in Jerusalem. “We have noticed a significant increase in business during the past few weeks due to lower airfares and the realization that making Passover at home requires a lot of work and costs a substantial amount of money. “The difference between our packages last year and this year is that we are not requiring people to stay for the whole holiday,” Odes continued. “In addition, our nine-night package was all-inclusive, meaning all meals were part of the deal, which made it more attractive to tourists.”
Last year, when Israeli hotels were filled to near capacity throughout the various holidays, four and five-star hotels were not in the habit of offering “all inclusive” packages to foreign tourists.
Airline prices are something of a silver lining, having come down from around $1500 last year to around $1000 this Passover season.
Despite the current gloomy forecast, according to the Ministry of Tourism, 2008 was the best year ever for foreign tourism, with more than three million visitors. The economic challenges of 2009 changed the overall Passover marketing scheme. Marketing officials for top-flight hotels say they expect to reach 60 to 70 percent capacity for Passover this year, down about 20 percent from 2008. And many admitted privately that they were worried about the prospects for a profitable summer tourism season.
Several weeks ago, the Israel Hotel Association chided the Israeli government for not releasing money to hard-hit hotel owners in order to increase marketing and public relations efforts in North America and England. However, Prime Minister Ehud Olmert’s caretaker government has been unable to dip into the 2009 state budget, because the budget must be passed by incoming Prime Minister Benjamin Netanyahu’s cabinet, as well as the new Knesset. In addition, the new minister of tourism, most probably a member of Avigdor Lieberman’s Yisrael Beitenu Party, will not take up his/her post for another few weeks. Thus, by the time a cohesive program to address the downturn in foreign tourism is launched, it might be too little, too late for 2009.
Meir Weingarten, president of Brooklyn’s Ariel Tours, which has been in the business of offering package tours to Israel for nearly 25 years, was clearly pessimistic about the future.
“This is worse than during the height of the intifada and the war in Lebanon, when many Jewish tourists still decided to keep on coming to Israel — to express their solidarity or visit family and friends,” Weingarten said. “At the moment, almost everyone is claiming that they have no money. It makes no difference how devoted you are to Israel; if you don’t have money, you aren’t flying to Israel. I’m anticipating a miserable summer season.”
Weingarten believes that the only way to reignite the market is to offer a variety of off-beat incentive deals. He added, “There is a certain short-sightedness on the part of the hotel owners who have been concentrating too much on Passover, without worrying about what’s going to happen in June, July and August. Hotel owners must think hard about lowering their prices and offer wild-and-crazy deals to wake up the tourists and give the market a chance to bounce back. Without prices being dramatically lowered, 2009 is going to be a very tough year.”
The economic crisis also comes as the city of Tel Aviv is trying to lure foreign tourists to the cultural capital during the course of its 100th anniversary celebrations.
Orly Peleg Mizrachi, who writes about the local tourism industry for the Israeli business daily, Globes, maintained that the Israeli tourism industry needs to be more proactive in reaching out to foreign tourists.
“The hotel owners have been crying for years about insufficient marketing and advertising funds both in good times and bad times,” she said. … Sporadic marketing towards the foreign market won’t bring people back to Israel. And there are some [hotel] chains who’ve actually given up on marketing towards North America for the moment.
“Until the new government is formed,” Peleg Mizrachi continued, “no one knows how the tourism issue will be addressed in the short term.”