Israel's tourism soared in 2023, yet faces new challenges post-war

The tourism sector experienced great growth at the onset of 2023, but due to the emergence of conflict in October, there may be little hope for a thriving tourism sector in 2024.

Israel's tourism sector demonstrated remarkable resilience and growth in 2023, with 3.01 million tourist entries injecting a substantial $4.85 billion into the country's economy. Despite facing the outbreak of war in October, the period from January to the onset of hostilities witnessed a 10% increase in incoming tourism from the United States, positioning it as the leading source country for Israeli tourism.

Tourism Minister Haim Katz expressed confidence in the industry's future, stating, “The period January 2023 to the outbreak of war saw a new record for incoming tourism from the US - the leading source country for Israeli tourism." Katz highlighted ongoing efforts to fortify the necessary infrastructure to ensure a swift and efficient response for the post-war period, aiming to jumpstart the economy and contribute to the country's rehabilitation and growth.

In December alone, 52,800 tourist entries were recorded, contributing to the annual figure of approximately 3,010,000 tourist arrivals in 2023. This marks a 12.5% increase compared to the previous year and a 34% decrease compared to 2019, Israel’s record year for incoming tourism.

Prior to the outbreak of war, estimates suggested that around 3.9 million tourists would visit Israel in 2023, nearing the record figures of 2019. However, external factors such as the Russia-Ukraine war and restrictions on outgoing tourism from China led to a decrease in the number of arrivals from these countries.

The Incoming Tourism Survey conducted by the Tourism Ministry revealed insightful trends, with 30% of tourists opting for organized trips and 70% choosing to travel independently. Furthermore, the survey highlighted a shift in the purpose of visits, with 36% arriving for touring and sightseeing, 20% for pilgrimage, and 30% as part of an organized tour.

The estimated income from incoming tourism for 2023 reached $4.85 billion (NIS 17.7 billion), showcasing a significant increase from $4.29 billion (NIS 15.65 billion) in 2022. The average expenditure per tourist, excluding flights, stood at NIS 6,005, with an average stay of 8.3 nights.

A troubling tail end

Israel's tourism industry, while celebrating a record-breaking year in 2023, is now grappling with the post-war challenges that lie ahead. Mark Feldman, CEO of Ziontours Jerusalem, provided a sobering perspective on the current state of the sector, emphasizing the need for a cautious outlook until the war concludes and foreign carriers resume operations with flights to Israel.

“While I appreciate the Tourism Minister's optimism, the sad reality is that until the war has ended and dozens of foreign carriers resume operations with flights to Israel, there is little reason to be optimistic for 2024,” Feldman said.

He pointed out that currently, there is a noticeable absence of groups expressing interest in visiting Israel, and few individuals are making plans to fly into Ben Gurion Airport. The situation is compounded by the fact that cruise lines, with the exception of Mano, are not setting sail from Ashdod or Haifa port.

Highlighting the immediate challenges faced by the industry, Feldman noted that many hotels are currently hosting evacuees from the North of Israel, with no clear timeline for when these individuals can return to their homes. Even when vacancies arise, hotels anticipate a period to bring their facilities up to date to cater to incoming tourism.

While the preparation of the tourism infrastructure is not a current hindrance, Feldman underscored the need to manage expectations. “Once the war subsides, there will be a slow and steady increase of tourists who will be welcomed with open arms and broad smiles,” he said.

However, the path to recovery may require a phased approach, acknowledging the need for time to revive and recalibrate the tourism infrastructure.