Online tourism lets Israelis fly more and pay less

Paris Photo: Reuters
Paris Photo: Reuters

The cost of ordering a vacation in Israel dropped 4.5% in 2016, while tourism purchases rose 14%.

Minister of Transport and Intelligence Yisrael Katz long ago called the open skies revolution the most important consumer revolution for the Israeli public. Katz believes that the fact that 140 airlines are now operating at Ben Gurion Airport, despite the relatively small size of the airport and Israel, and that the map of destinations has continually grown, while prices have dropped, is the consumer development of the decade. The result is that Israelis are flying more. Passenger traffic grew 11% and burst through the 17 million barrier in 2016, and the frequency of flights also surged.

Many consumers have also changed their buying habits. First of all, tourism price comparisons through the use of special search platforms has greatly increased. Secondly, a vacation destination is frequently selected according to the price or flight dates, rather than constituting the essential element. Thirdly, the use of flights through intermediate destinations has increased, because they are cheaper. Finally, advance vacation planning has become more and more prevalent, especially due to the multiplying of low cost airlines offering lower prices for ordering a vacation long in advance.

"We are already in the last stage of orders by vacationers for the summer," says Aviation Links CMO Nir Mazor. "To the extent that sunbathing destinations at hotels adapted for families on specific dates are involved, mainly in August, you can say that the ideal time for ordering has passed, and the supply is no longer large."

Erez Bousso, CEO of flight prices comparison website Smartair, is taking note of the early orders: "When we compare flight prices two-three months before the date with prices one week before the date, the price gap is likely to reach 30%. The consumers have also learned this, and have gotten used to ordering in advance and reserving more worthwhile prices for themselves."

Consumer behavior confirms what the people working in the sector are saying. Israelis are ordering their vacations earlier, paying less for every flight or vacation, but spending more yearly on this segment, i.e. are flying more, according to an analysis of consumer behavior by the Leumi Card Ltd. credit card company.

The data show that the volume of tourism purchases grew 14% in 2016, compared with 2015, and the number of deals, i.e. orders of airplane tickets and hotels, was up 11%. In contrast to the volume of orders, the average cost per flight fell from NIS 1,385 in 2015 to NIS 1,322 in 2016, a 4.5% decrease.

Israir Airlines and Tourism Ltd. CEO Uri Sirkis explains that in searching for new destinations, the company is making the price of a vacation its top priority, with the limit being $500 per vacation (not counting the Passover holiday or times of peak demand in the summer).

The figures show that even though less is being paid per vacation, annual spending has risen slightly. The Israeli consumer spent an average of NIS 6,447 on flights and vacations in 2016, compared with NIS 6,322 in 2015, a 2% rise.

The trend in online tourism orders is straight up. eBay figures for 2016 show that 52% of online purchasers ordered a vacation in Israel or overseas.

Israelis ordering online prefer foreign vacations. In its monitoring of online deals, Leumi Card found that the website was the favorite for Israeli tourists, with a 193% increase in the number of orders in 2016, compared with 2015.

The next most popular tourist website is the airbnb website for ordering apartments, with a 68% increase in business. Other websites frequently used by Israelis were, whose orders increased by 48%, and veteran Expedia, with 42% growth.

"Online purchases have completely changed how we consume tourism, and have opened many and varied possibilities for the Israeli tourist consumer," says Leumi Card EVP Vardit Givandeter. She notes that a survey conducted by Midgam for her company shows that 79% of overseas travelers have ordered a vacation online at least once.

The survey also shows that Israelis separate the elements of vacation packages. 48% of overseas vacationers prefer ordering every element of a vacation separately in order to find themselves a worthwhile package. 42% said that they make their orders directly from the airline's websites and sites marketing hotel rooms.

Another figure indicates that Israelis have become smarter consumers: 64% of overseas travelers said that they regularly compared prices before ordering a vacation.

In addition to the destinations favored by Israeli travelers - the US, Western European cities, and the Greek islands - Leumi Card detects an increase in visits to new destinations. According to deals actually made, Tanzania had the biggest growth in 2016, 156%, followed by Macedonia with 147% and Montenegro with 145%.

Other destinations with growth in the number of deals included Latvia (100% growth), Cyprus (57%), Georgia (56%), Poland (55%), Ukraine (49%), and the Russian Federation (45%). Routes have just been opened to some of these destinations, such as Montenegro and northern Cyprus.

Published by Globes [online], Israel Business News - - on May 4, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Paris Photo: Reuters
Paris Photo: Reuters
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