It's not just food: vacationing too is expensive in Israel. So expensive, that 35% of the population, that is, more than 2.5 million people, can't afford to take a vacation in their own country. These are the findings of the committee to examine vacation costs in Israel appointed last year by Minister of Tourism Stas Misezhnikov. The committee's report is due to be released in the next few weeks.
Another of the committee's findings, revealed for the first time here, is that 18% of Israelis prefer to vacation abroad only, most of them after they realize that it is sometimes cheaper to go on vacation in Bulgaria, Cyprus, or the Greek islands (which have replaced Turkey as a favorite destination for Israelis). In this context, it is worth recalling research carried out by the Bank of Israel on the tourism industry in 2011, which found that demand by Israelis for hotel overnights was more price sensitive than demand by foreign tourists.
"The main conclusion arising from the work of the committee is that it's expensive to vacation in Israel, both for Israelis and for tourists. As a result, Israel loses a large proportion of its tourism potential," says Misezhnikov (of the Yisrael Beitenu party), in an exclusive interview with "Globes" at the opening of the tourist season.
Misezhnikov says that tourism has long come to be regarded not as a luxury but as a need and a part of life. "We work in order to live and go on vacation, not the other way around. Everyone is entitled to a vacation, and now, in the spirit of the social protest, we have an opportunity to amend the injustices."
Misezhnikov also says that the inter-ministerial committee he set up with the participation of all the relevant government ministries Finance, Interior, Health, Justice, consumer protection in the Ministry of Industry and Labor - the Chief Rabbinate, and representatives of the public, advised by Professor Aviad Israeli, head of the Department of Hotel and Tourism Management at Ben Gurion University of the Negev, found that if the government and private sectors were to work in the right direction, it would be possible to lower the cost of vacationing in Israel by 20%.
Why is it expensive to vacation in Israel?
"The State of Israel's tourism potential is very high, but when you get down to practicalities you encounter many problems, among them a difficult geopolitical situation, and a negative image in the world that thins out tourism. After you put the dangers and the image aside, you come to the main problem: high prices. We really are expensive in comparison with similar products in countries similar to ours in the Mediterranean basin, and even in comparison with complementary products in Europe. To illustrate the pint: after Egypt and Tunisia lost tourists in the wake of the revolutions they went through, I proposed to French tourist agencies that they should send French tourists to us instead of to Tunisia and Egypt. They checked and responded, 'No thanks.' Why? Because we are twice as expensive. Vacationing in Israeli is dear among other things because of excessive government regulation imposed in tourism companies, such as security, kosher food, and high municipal rates."
What are the main ways of making vacations here cheaper?
"On way is for the government to lower taxes, such as through a reduction in municipal rates for tourism enterprises."
Could it be that vacationing in Israel is expensive because of the greed of those in the industry?
"Not at all. It isn't a matter people in the industry being greedy. On the contrary, anyone who invests in the hotel industry is a courageous entrepreneur with far horizons, who has only recently started to see a profit after years of decline because of geopolitical volatility. The hotels suffer from certain problems and so prices are high. Prices need to be brought down so that consumers can enjoy vacations and the tourist industry can make a profit."
Has the lack of a hotel grading scheme contributed to prices going wild?
"There is currently no uniform grading method, and that creates distortions in prices. We are determined to start a pilot hotel grading scheme by the end of the year through a local company or a public committee. The Israel Hotel Association thinks that an experienced European company should do the grading."
Do you believe that your reform will be implemented? It will require political clout.
"Just as Minister of Communications Moshe Kahlon submitted his reform for lowering mobile phone calls to the government and brought about a revolution, I too can submit a reform for lowering vacation prices to the government and bring about a revolution. No minister will oppose it."
The 'Open Skies' agreement with the European Union is stuck. If it is signed, it will make air travel to and from Israel much cheaper. What part are you playing in promoting it?
"After five years of Sisyphean work, the Ministry of Tourism and the Ministry of Transport succeeded in reaching an 'Open Skies' agreement with the European Union, but, unfortunately, the agreement was scuttled. At the Knesset Finance Committee, it was thought more important to look after the big workers committees. I understand that such an agreement can't be implemented all at once, because that is liable to lead to the collapse of local airlines, but such an agreement should be signed and implemented gradually, because it will bring about a drastic change in availability and prices. At the same time, the state should provide a safety net for local airlines, as it did for El Al on security."
On the subject of airlines, how much does El Al's situation worry you? And is it true that there are voices in El Al's management calling for operation of Saturday flights as part of a move to improve its financial position?
"El Al's situation is not easy and is very worrying. Although it has been privatized, we still see El Al as a national airline, and that's not just a slogan. If, heaven forbid, something happens to Jews somewhere in the world, El Al is the first to reach every place, however remote, and lend assistance. Everything must be done to ensure that it does not collapse, but the company too must change internally. I have invested many hours to see how I can help El Al. I am not aware of thoughts of flying on Saturdays. As a secular person and as minister of tourism, I am in favor of that, but with the system of government we now have it seems to me impossible to implement."
El Al said in response, "These are baseless rumors, and we have no intention or thought of flying on Saturdays."
"14,000 hotel bedrooms lacking"
A severe shortage of hotel rooms is one of the main factors making vacationing in Israel expensive. Everyone in the industry is clear about one thing: building more hotel rooms in high-demand areas will lead to a fall in prices. The latest State Comptroller's report on the matter found that the bureaucratic obstacles and statutory difficulties standing in the way of potential developers in constructing hotels were intolerable. "Government ministries, headed by the Ministry of Tourism and Ministry of Finance, must remove the obstacles preventing the construction of hotels and expansion of the number of hotel bedrooms, and to act in cases in which government involvement is required. At the same time, the ministries should preserve land designated for hotels," the report states.
What are you doing in order to simplify the bureaucracy and remove obstacles?
"There is no reason that a developer should go through hell. Today, it takes nine years to build a hotel, and that can be cut to five years. The committee dealt with this matter too. At present, we lack 14,000 rooms, and we can overcome that if we work in the right way. We have recently allocated NIS 9 million for garnts for developers who wantto build at the Dead Sea, and in the next few weeks we will provide another NIS 15 miillion for development of tourist infrastructures between Zohar Springs and Ein Bokek. In general, our aspiration is that the Ministry of Tourism should be a one-stop-shop, and thus prevent developers from having to waste time running around between different government agencies. It will help to make this possible if the Israel Land Administration transfers to us responsibility for selling land designated for tourism purposes. I am pressing the prime minister on this."
The State Comptroller also found that land for tourism and tourism assets were being used for other purposes.
"In the past we encountered such phenomena; much less so today. We aren't shy of petitioning the High Court of Justice where necessary, such as in the case of the Herzliya marina, where a hotel built with our support suddenly turned into private vacation homes "
The Comptroller found that your ministry had not formulated a strategic plan and a five-year plan for the main tourism sites, or a plan for financing and maintaining several regional projects.
"You have to take the Comptroller's report in proportion, because of all the regulatory difficulties that make life in the tourism industry very tough."
Published by Globes [online], Israel business news - www.globes-online.com - on July 4, 2012
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