"Israel's hotels on brink of collapse"

hotels

Hotel Association president Amir Hayek warns of the worst crisis ever in the Israeli hotel industry.

"Mass layoffs and hotels closing down - the hotel sector in Israel is on the brink of collapse," warns Israel Hotel Association president Amir Hayek. 4,000 of the 41,000 workers in hotels have been sent on unpaid leave, while cutbacks and layoffs of temporary workers and personnel agency workers have begun.

Hayek says that the crisis is the worst in the history of the Israeli hotel industry. "If immediate government aid is not forthcoming, mass layoffs will begin, and the sector will lose over half of its employees," he said. The Hotel Association's figures show that as things stand, the estimated annual damage to the sector is NIS 4.2 billion - NIS 350 million a month. Hotel occupancy has plummeted to less than 40%, an average of 30% less than in the corresponding period last year. The decline is worst in Tel Aviv and Jerusalem, where occupancy is 30%.

"The expected closure of Israel's borders to tourist entries from the entire world will immediately cost the sector NIS 500 million a month in revenue, NIS 6 billion a year, and hotel occupancy will drop to 20% in areas oriented towards incoming tourism, such as Jerusalem and Tel Aviv. There will be massive layoffs, and dozens of hotels will close down. The hotel industry has never been in such dire straits. Hotel chains are consolidating proximate hotels while isolated hotels are on the verge of closing down," Hayek added.

The hotel industry, one of Israel's main growth engines, is now in the forefront of the crisis. "The sector, which provides the state with billions a year in revenue, is on a precipice. It is time for the state to exercise responsibility towards Israel's economy, not just towards its citizens, and to realize that without immediate oxygen in the form of a NIS 500 million in aid, this patient will die," Hayek said.

Published by Globes, Israel business news - en.globes.co.il - on March 9, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

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