November 1, 2001
Closed for the Duration
Whenever there's a wave of terror in Israel, the nation's hotels come up against a wave of cancellations, and the country's entire tourist industry -- from five-star hotels to souvenir hawkers -- goes into a slump. But in a few months the terror and fear subside, and the tourists come back.
Not this time. "The tourism industry has never had a crisis of these proportions since the country began. Little by little it keeps getting worse, and nobody can see the end of it," says Mira Altman, director-general of the Tourism Ministry. "Hotels are closing, travel agencies are closing, tour guides haven't worked in a year. The tourism industry is simply collapsing."
The crisis began in October 2000 with the outbreak of the intifada, and people stopped flying to Israel. Then came Sept. 11, and people stopped flying anywhere. Now two wars have to end -- the one against Israel, and the one against America -- before Israel's tourism industry climbs out of depression. This could take years. The question is: If and when the wars end, will tourists wishing to visit Israel again have hotels, tour operators, guides and such to accommodate them?
The industry is now in a survival mode, firing workers, trimming services and slashing expenses like mad, trying to stay afloat in anticipation of "the day after," Altman says. "We're not doing any marketing, any advertising," she adds.
The statistics for the year beginning October 2000 are in now, and they're bleak. Some 40,000 of the 180,000 tourism employees lost their jobs. Industry-wide income fell from $4.2 billion to $2 billion. Hotel occupancy fell by 60 percent. Scores of the country's 350 hotels closed whole floors, and 32 shut down altogether.
Hardest hit were Jerusalem -- the No. 1 destination for foreign tourists -- and the other cities that depend heavily on overseas visitors -- Tiberias, Netanya and Nazareth.
The city of Jesus' birth was counting on millennium tourism to boost its economy. Three big hotels were built in advance of 2000: the Renaissance, Marriott and Howard Johnson's. All three closed in the last year, as well as the city's five other, smaller hotels.
Some hotels are considering retooling and becoming office buildings. A couple of the smaller ones have turned themselves into immigrant hostels.
Now that the Jewish holidays are over, another 15-20 hotels are expected to close -- bringing the country's total to about 300, down from 350 a year ago. "I hope 300 is the bottom and it will go no lower," says Avi Rosenthal, general manager of the Israel Hotels Association. "But I don't know. The way things are going, we can expect a few thousand more hotel rooms to shut down, and a few thousand more employees to be fired."