Prices paid by Israelis for hotels and vacations in Eilat fell 40% in July compared with July 2018, according to figures reported on the HotelsCombined price comparison website, based on the prices paid for reservations actually made.
According to the website, the average price paid for a room in a five-star hotel fell 23% to $288 (NIS 1,025) per night. The price for rooms in a four-star hotel was down 11% to an average of $219 (NIS 780) per night, while the cost of renting a vacation room fell 40% to an average of $120 (NIS 430) per night.
According to HotelsCombined business development manager Ayal Segal, an examination of hotels and apartments for rent shows a steep fall in revenue, because the shekel dollar exchange rate fell from NIS 3.64/$ in July 2018 to NIS 3.55/$ in July 2019. "The fall in prices can be explained by the cheaper alternatives of a vacation in Sinai and neighboring countries in the eastern Mediterranean, especially Cyprus; the closing down of the airports in Tel Aviv and Eilat; and the negative campaign that emphasized the difficulty of reaching the city," he said.
Hotel industry figures for July have worsened in recent years even without the closing down of Sde Dov Airport. Not only do many Israelis prefer overseas vacations because of high prices in Eilat, but the Ministry of Education's subsidies for summer camps are keeping many students at home in the first three weeks of their summer vacations. Furthermore, many vacationers arrive in July in groups organized by their workplaces.
The shifting of flights to and from Eilat to Ramon Airport affected the demand for flights. The Israel Airports Authority reported in June, before Sde Dov closed down, that inland flights from Ramon Airport totaled 105,300 - 9% fewer than in June 2014.
Most hotel chains operate free shuttles from Ramon Airport to the center of the Red Sea resort (instead of a tax costing NIS 100 in each direction). Israir is now offering its passengers another solution: renting a car for NIS 80 a day (in cooperation with Budget Rent a Car System).
August is expected to be a better month for hoteliers in Eilat, especially the last two weeks of the month after Tisha b'Av. Segal says, "The highest prices of the peak tourist season are being maintained in August, and the prices of reservations are even higher than in the preceding August. Nevertheless, the July figures are alarming, because the tourist sector cannot rely on one successful month."
The hoteliers are not sitting idly by. Bargains including discounted flights with Israir and Arkia (at NIS 90-10 in each direction for certain flight hours) are designed to encourage vacationers to come to Eilat. This comes on top of bargains such as including Tuesday night for free (in Isrotel hotels). Israir recently increased its flights from Haifa to Eilat.
Arkia has begun selling vacation packages to Aqaba with roundtrip flights from Ben Gurion Airport to Ramon Airport. Arkia calls Aqaba "the closest and most pampering destination you could ever think of." The package contains a flight and a four-star hotel: "the perfect vacation for a couple at especially worthwhile prices. You can feel like on a foreign vacation just one hour from Tel Aviv," Arkia's websites proclaims.
The pitch to couples is no accident; the number of vacationers from Israel in Aqaba is rising, but many parents still fear a vacation with their children in the neighboring country. Prices of packages start at NIS 800 per night for a double room, for example in a package of three nights in the Hyatt Regency Hotel from Saturday through Tuesday in September or a two-night package in July. A hotel package in Eilat for two nights on the same dates costs NIS 935 (Isrotel King Solomon Hotel or Isrotel Agamin Hotel, for example).
Published by Globes, Israel business news - en.globes.co.il - on July 16, 2019
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