Israel's Tourism Takes a Hard Hit During the Middle East Chaos

Jo Piazza
·Managing Editor

Jaffa, the oldest section of Tel Aviv. (Photo: Thinkstock)

It was 10 p.m. in Tel Aviv on Tuesday night and the bar of the Brown TVL Hotel was filled with locals, diplomats, and ex-pats sipping on watermelon martinis and mojitos.

What was missing were the tourists.

"It is devastating us economically," said Leon Avigad, the developer of Brown Hotels, a small collection of boutique hotels in Jerusalem and Tel Aviv. "We are losing tons of money by the minute. The entire profit from the summer is wiped out." 

Scene from the Brown TVL on Tuesday night. (Photo: Leon Avigad)

In 2013, more than 3.5 million visitors came to Israel, pumping more than $12 billion into the country’s economy. According to the Israeli Ministry of Tourism 2013 was a record year for the country and until recently, 2014 was on pace to be 15 percent ahead of last year. 

"Obviously the past two weeks has caused fewer visits," said Geoffrey Weill, a spokesman for the Tourism Ministry. "Had the year continued normally we would have seen that growth. That will obviously be affected now."

One of the many casualties of the current Israeli-Palestinian conflict has been Israel’s booming tourism business,which can account for as much as six percent of the nation’s gross domestic product. 

Major American airlines halted flights to Israel on Tuesday after a rocket fell near the Ben-Gurion International Airport outside of Tel-Aviv. The Federal Aviation Administration warned carriers that they shouldn’t fly to Israel. The three United States airlines that service the country — Delta, United, and US Airways — temporarily suspended their flights.

El Al Israel Airlines, Israel’s national carrier, is continuing flights, but they too have taken a hit.

"We had a strong June, July and we saw very strong demand. We were very pleased and in the last two weeks things have changed dramatically. We have had a lot of cancellations and people are postponing their flights to later dates and that is a pity," said Danny Saadon, Vice President And General Manager, EL AL Israel Airlines. Saadon estimates that their sales are down approximately 25% around the world.

"The United States is the strongest market for El Al so this is impacting the bottom line for the financial results for the Third Quarter," Saadon said.

Related: Airlines Scrap Israel Flights Over Missile Fear

Twenty percent of all tourism to Israel is from the United States, followed by Russia, Britain, France and Germany.

In their third war in just over five years, Israeilis have been fighting against Hamas militants in the Gaza strip since July 8. Israeli police confirmed that Tuesday’s rocket landing was the closest hit to the airport.

There are still tourists in Tel Aviv. You see them on the beaches and in coffee shops. They obey the orders when an alarm sounds.

It is high season for the beach in Tel Aviv. (Photo: Thinkstock)

Weill, the spokesman for the tourism bureau, said that his wife is currently in Tel Aviv. ”She was irritated that I interrupted her coffee when I called,” he said. “Restaurants are open, hotels are open, but obviously the flight issue is very critical.  This will obviously have a big impact for people.”

The southern region of the country, including the cities of Ashkelon, Ashdod, and Be’er Sheva have been much harder hit than the central cities.

"Hotels are completely empty. This summer time and the hotels and restaurants are supposed to be full of tourists. At the moment almost everything is closed," said Orly Segal, a public relations specialist for various restaurants and hotels in the country.

The irony, Avigad said, is that now is the very best time to visit Israel.  ”The few brave people who are coming here are having the time of their lives because the beaches are not packed and the weather is amazing,” Avigad said. 

Business owners within Tel Aviv believe that tourism will bounce back as soon as the conflict has abated.

"In the meantime, it is a short and drastic drop, but unfortunately we are used to it," Avigad said. " Every time this happens, Tel Aviv bounces back and demand is high once again."

Other regions of the country may be harder hit for longer.

"The tourism industry will continue to lick its wounds long after the war," Segal said. "Even if the war would end tomorrow the damage to tourism will be many months ahead."