2017 ended on a high note for hotel occupancy rates and tourist overnights in Israel. Foreign tourist hotel overnights totaled 10.6 million in 2017, 23% more than in 2016 and ahead of the 10.2 million overnights posted in 2008. Total hotel overnights in Israel amounted to 24.2 million, 10% more than in 2016. Hotel overnights by Israelis totaled 13.6 million, the same number as in 2016; the increase in vacations by Israelis consisted mainly of overseas trips, a trend supported by the 16% rise in passenger traffic at Ben Gurion Airport in 2017 recently reported by the Israel Airports Authority.
The forecasts for next year are for a continuation of the rise in passenger traffic from 20 million to 23 million, again at the expense of vacations by Israelis in Israel. According to figures from the Israel Hotel Association, 2017 was the first year since 2008 in which the number of overnights by Israelis did not rise.
By region, Israeli tourists remain loyal to Eilat (46%), while most of the foreign tourist overnights were in Jerusalem (33%), Tel Aviv (24%), and Tiberias and Lake Kinneret (the Sea of Galilee) (11%). The nationwide number of hotel rooms rose 2,000 to 54,000, 4% more than in 2016. The construction momentum is projected to continue in the coming years, with announcements about construction of hotels in Eilat, Ashkelon, and even in Modi'in. The nationwide hotel occupancy rate in 2017 was 67%, compared with 62% in 2016. The highest rates were in Tel Aviv (74%), Eilat (73%), and the Dead Sea (71%). The occupancy rate in Jerusalem improved substantially, reaching 65%, compared with 53% in 2016, and occupancy rates in Tiberias, around Lake Kinneret, and in Nazareth also rose, among other things because of Christmas vacations, a practice that many Israelis have also adopted.
Cautious optimism
The slumping shekel-dollar exchange rate is, however, alarming the hotel sector. The Israel Hotel Association welcomes the higher number of overnights, but warns, "As the shekel-dollar exchange rate falls, productive industries, such as hotels, will continue to suffer damage. The strong shekel has dealt a severe blow to the hotel sector, because half of its revenue is in dollars, while expenses are in shekels. Our turnovers have declined by an average of 5%, and that means a lot of money. When the shekel-dollar exchange rate falls, it damages our economic position and our ability to compete internationally. It is important for the Bank of Israel and the Ministry of Finance to address this problem."
Published by Globes [online], Israel Business News - www.globes-online.com - on January 25, 2018
© Copyright of Globes Publisher Itonut (1983) Ltd. 2018