Israel's tourism industry faces heavy losses amid ongoing conflict with Hamas

Israel has suffered a loss of around 18.7 billion Israeli Shekel (NIS) (1 NIS is equivalent to Rs 22.62) from international tourism and NIS 756 million from domestic tourism since the war with Hamas broke out in October last year.

The country's tourism ministry said in a statement that the entry of around 8,53,000 tourists, mostly from the US, France, the UK, Russia and the Phillipines had been registered in the past one year since the war broke out.

Out of them, over 62 per cent were Jewish, while 29 per cent tourists were Christians. Similarly about 44 per cent came to visit friends and family in Israel, while 28 per cent stated their main purpose was classic tourism, and 13 per cent came for business. For 73 per cent of tourists, this was a repeat visit.

A total of 68,712 tourists were evacuated from the northern part of Israel are yet to return home, the ministry said. Out of the evacuees, 53,113 are staying within the community, while 15,599 are being hosted in hotels since the outbreak of the war.

The cost of the evacuation currently stands at NIS 5.466 billion, which has been transferred to the relevant hotels, and an additional NIS 3.182 billion, which was paid directly as subsistence grants to evacuees who chose to live in the community, the tourism ministry said.

Shortly after the outbreak of war, to ensure proper living conditions for evacuees and prevent the collapse of the hospitality industry, Israeli Tourism Minister Haim Katz requested and received authority to manage the evacuation of residents living along the conflict line. This operation replaced private travel agents who charged commission, saving the state about NIS 400 million.

Israel Minister of Tourism Haim Katz, “Our individualised and sensitive treatment of evacuees helped strengthen the home front’s resilience during Israel’s prolonged campaign. We worked to preserve the infrastructure needed for the tourism industry for the day after and we continue our efforts to encourage tourism even during these challenging times."

"Tourism is a national, economic, and diplomatic asset. I will oppose the cancellation of zero per cent VAT for tourists, a move that will not bring in any additional revenue to the state, will increase the cost of visiting Israel, and adversely affect the numbers of incoming tourism," he said.

Based on the pace of tourist arrivals until the outbreak of war, it was anticipated that a new record would be achieved, surpassing the 2019 incoming tourism record of about 4.5 million entries. However, while three million tourists entered the country in 2023, the number is expected to go down to around one million this year.

However, despite the tourism crisis, the Ministry continues to receive many grant requests for hotel construction and expansion. In 2023, grants totalling 128,229,663 NIS were approved for the construction of 2,122 hotel rooms. Since the start of the war, seven hotels have opened with the assistance of the Ministry, adding 765 rooms.

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