In sign of booming economy, almost half of Israelis going abroad

JULY 2, 2018 21:11

Updated: JULY 3, 2018 04:10

An El Al plane in Ben Gurion Airport (photo credit: REUTERS) — An El Al plane in Ben Gurion Airport

(photo credit: REUTERS)

A record number of Israelis traveled or vacationed abroad in the last year, signs of a booming economy and the increasing number of low-cost airlines servicing the market.

When Joel Strauss sought to whisk away his serious girlfriend on a weekend rendezvous, he didn’t even check out local getaways.

“Going abroad to Vienna led to big savings without the big balagan (mess),” said the 30-year-old Strauss, an Israeli-American who hails from New Jersey. “Airline tickets are often times super cheap because a lot of the European carriers, like EasyJet and Wizz Air, fly to Israel. And the hotels tend to be much better for the price.”

A record number of Israelis traveled or vacationed abroad in the last year, signs of a booming economy and the increasing number of low-cost airlines servicing the market.

2017 saw a peak number of Israelis leave the country, with some 7.6 million one-time departures, according to the Central Bureau of Statistics.

That’s up 12% from the year prior.

From post-army backpackers to lovestruck honeymooners, nearly half the population, or 3.8 million Israelis, departed the country at least once last year. That stands among the highest rate of international travel in the world – a sign that more Israelis have discretionary income to spend.

“The economy is in a really good state,” Alex Zabezhinsky, chief economist at Meitav Dash investment house, told The Jerusalem Post.

“Unemployment is really low and personal income grew fast last year.

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So, the general financial condition of citizens improved.”

The relatively strong local currency – with a dollar trading for NIS 3.67 on Monday evening – has made shekel- priced flights cheaper for Israelis, along with low oil prices and more intense ticket competition.

“The shekel has been one of the strongest currencies in the past five years,” Zabezhinsky said. “So, a vacation abroad has become much cheaper than if you compare it to five years ago, even 10 years ago, because of the shekel’s strength.”

More than 100 airlines service Ben-Gurion Airport, a handful of which have launched operations in the past year – and dozens more than just a few years ago.

The increase in flights comes after Israel signed the Open Skies Agreement in the last decade, removing government barriers to entry and permitting many more European airlines to fly to Tel Aviv.

While airline tickets are getting cheaper, local hotels aren’t granting more discounts for Israeli guests.

“In Europe, you can find a hotel for €100 or even less,” Zabezhinsky noted. “I don’t think you can find a hotel in Israel for €100 (NIS 426) a night. Even a bed-and-breakfast is very expensive – you pay NIS 1,000- 1,500 per night. So, it’s very expensive, local tourist prices.”

Until around 2011-2012, the cost of local vacation packages increased at the same rate of airline tickets, Zabezhinsky said. Since then, weekend trips to the resort town of Eilat or a bed-and-breakfast in the northern Galilee have only gotten more expensive – while ticket prices have remained steady.

Israeli hotels are more expensive than in many European locales – especially when compared to average income – because of expenses such as kashrut. Other additional costs include how the government levies heavy taxes on employers for hiring foreign guest workers.

And another factor driving up Israeli hotel prices is simple supply and demand. In 2017, Israel enjoyed record tourist numbers – with a record-breaking 3.6 million people visiting the country.

It has taken three years since Operation Protective Edge for incoming tourism numbers to bounce back to the regular growth rate and surpass previous records.

“The prices are going up because of very strong incoming tourism, and there aren’t enough hotels to host all the visitors,” said Zabezhinsky, adding that only a future security flare-up could limit how much Israeli hoteliers can charge guests.

Almost 20.8 million passengers transited through Ben-Gurion in 2017, according to data from the Israel Aviation Authority, a sharp uptick from 17.9 million in 2016. The airport’s 2018 estimate is 23 million.

Ben-Gurion handles more than 90% of passengers entering and exiting the Jewish state, and travel through the congested airport continues to rise – a sign of burgeoning inbound and outbound traffic.