Tourism in Israel rises but experts warn high prices may deter return visits

In a remarkable turnaround since the pandemic, tourism to Israel has begun to bounce back and industry experts believe that next year, 2024, has the potential to be a record year for tourism. However, many experts are concerned that general high prices, outright price-gouging, and the lack of a long-term strategy could relegate Israel to a one-time trip for most tourists. 

"We're all aware that costs have gone up, but, in my opinion, it seems bordering on obscene that there is no supervision of these prices," Mark Feldman, director of Diesenhaus Group, told The Media Line. 

Feldman described some unpleasant incidents his own clients had experienced, including taxi drivers charging three times the normal price or claiming their meters were broken; a site doubling its admission fee; a hotel offering a tiny room charging $375 a night; another hotel charging over $700 a night for a standard room because of its good location; and a hummus restaurant charging $300 for a basic meal for four that normally costs a fraction of that price.

"People are paying these outrageous prices," he said. "It is not going to stop tourism, but what it will do is to stop repeat tourism. It will become a once-in-a-lifetime opportunity."

Feldman called this a "myopic view" and urged government officials to address price gouging, enforce taxi meters, set a long-term plan to encourage return visitors, and work "to give tourists a positive experience."

"The high prices are going to have a ripple effect down the road," he said. "Our whole concept of having sustainable tourism is to get you to come back."

Tours to Israel are 25% to 30% more expensive than they were in 2018, Uri Steinberg, former tourism commissioner to North America, told The Media Line.

"But they [tourists] are doing it anyway. They're sucking it up and paying what they need to pay, although prices have increased dramatically," he said. "As it looks right now, 2024 is going to shatter all records."

Emily Boyd, a travel advisor for Eagles' Wings Travel in the United States, told The Media Line that while in the past many tourists who could not easily afford such a trip might have chosen not to go, now, since the pandemic, they approach a trip as a once-in-a-lifetime chance and just make it happen, despite the higher prices.

"The new normal, post-COVID, is not just the [higher] pricing, but people willing to pay it," she said. "The ones who cannot, just simply will wait until they can pay it. People are making up for the last few years, and because of that, people are willing to go and they are also willing to pay. They are taking the last few years of not going anywhere into consideration."

Israel's highest amount of tourists in a year was in 2019

Israel welcomed its highest number of tourists – 4.55 million – in 2019. But COVID lockdowns closed Israel to foreigners for 15 months, from March 2020 to May 2021, followed by varying restrictions until March 2022.

This year, as of May, 1.65 million tourists had arrived in Israel, and 2023 is expected to finish slightly under the tourism levels of 2019. Many hotels, however, are already fully booked for 2024.

Tourism Minister Haim Katz this month announced a plan to relieve some of the demand for hotels by building pop-up accommodation complexes, such as campsites and caravans for "glamping," for next year.

"The move we are embarking on is intended to provide a response during peak seasons, for quality vacations without breaking the bank," he said.

Anat Shihor-Aronson, a spokeswoman for the Tourism Ministry, said there is a market for camping.

"The purpose is to lower the demand for hotels in high seasons and to lower the price to let families be able to have a vacation like everybody else," she told The Media Line.

Feldman sees camping as an attraction for domestic tourists more than for foreigners.

"I applaud their ingenuity to start building campgrounds and glamping. It is a very, very niche tourism point," he said. "But it's not a long-term program."

The issue of the price of travel to Israel is nothing new. In 2013, then-Tourism Minister Uzi Landau said the country should invest in hotel construction, "especially geared toward low-end two- to three-star domestic tourism and youth hostels. It's not always necessary to invest in five stars. Once there is greater competition, the hotels will be forced to lower prices."

Shihor-Aronson said the Tourism Ministry is looking for ways to reduce bureaucracy and offer grants to encourage new hotel room construction.

However, Steinberg said, this is happening "way too slowly."

"In 2024, there are a lot of people who want to come and there's [already] no room," Steinberg said. "Right now, people are turning away business because there is such a high demand. We need more hotels and we need a variety of hotels, two-star, three-star, as well."

Steinberg said the Tourism Ministry should also invest in other infrastructure that would make the country more tourist-friendly.

"People are in love with the Negev Desert and yet, if you're a tourist and you want to experience the Negev, where are the signs? How would you find your way?" Steinberg said. "We've got a great product, but at the end of the day it is so far from maturing as something that people can use and a group can visit."

Feldman describes the current tourism boom as "Teflon tourism," likely born out of a post-pandemic desire to travel and, for now at least, immune to terrorism and war. However, this will not last forever, and Feldman wants a plan.

"I don't know if Katz's goal is to get to 10 million [visitors] in 2024. If so, how?" he said. "What are we doing for Israel's 100th anniversary [in 2048]? Are we expecting 15 million? Sooner or later something will cause a glitch in tourism and then, how do you scale back? The warning lights are there. If we try to make ourselves on a level of New York or London, then we are pricing ourselves out."