With 4.12M visitors in 2018, Israel plans for more hotels

The Israeli Tourism Ministry has announced subsidies for hotel developers to convert Tel Aviv office buildings into hotels before establishing criteria for who can receive them
Tel Aviv has shown the highest absolute hotel occupancy for the first 10 months of 2018. Photo credit: Glavo / Pixabay

In December, Israel was anticipating its four millionth tourist for 2018, a goal it reached and exceeded by the end of the month. This marked approximately 14 percent more international entries than in 2017 and 42 percent more than in 2016.

According to the Central Bureau of Statistics, more than 4.12 million tourist entries were recorded in Israel for 2018, an increase of about 14 percent compared to the same period last year. Approximately 325,600 tourist entries were recorded for December alone, 12.2 percent more than December 2017 and 31 percent more than December 2016.  

Revenue from tourism in December reached about $460 million (NIS 1.7 billion). Revenue from tourism for the year reached about $5.8 billion (about NIS 22 billion). 

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The top six source countries to Israel for incoming tourism are the United States (897,100), France (346,000), Russia (316,000), Germany (262,500), UK (217,900) and Italy (150,600). 

Breaking Records

“We have broken incoming tourism records and this achievement is the direct result of intensive work that we are doing at the Tourism Ministry,” said Minister of Tourism Yariv Levin. "This achievement is a result of a revolutionary change in marketing strategy; infrastructure development; opening direct routes from new destinations and creating collaborations with some of the largest travel agents in the world. Incoming tourism makes a huge contribution to both Israel’s economy and its image.”

Image credit: Israel Ministry of Tourism

In 1978, Israel passed the one-million tourist mark, 30 years after the establishment of the State. It took 16 years to add the next one million tourists (in 1994) and 23 years to reach three million tourists (in 2017), but it took only one more year to reach four million.

“This is the second consecutive record-breaking year in incoming tourism to Israel and this year we have crossed the threshold of four million tourists in a year,” said Tourism Ministry Director-General Amir Halevi. “We are optimistic about 2019, [which] begins with the opening of the new international airport at Timna, that will enable us to continue bringing new flights to Eilat. What was considered a fantasy a few years ago is today a reality: Israel is a preferred tourist destination among tourism destinations around the world."

In 2018, international market research firm EuroMonitor named Jerusalem as the fastest-growing tourism destination in the world.

Hotel Growth

As in previous years, the Ministry of Tourism gave grants to entrepreneurs to encourage the establishment, expansion and conversion of hotels in various cities, and demand is driving supply. Over the year, NIS 145 million was allocated to help entrepreneurs build 3,829 new rooms, representing an annual year-over-year growth of 49 percent (2017: 2,566 new rooms; 2016: 1,936 new rooms and in 2015: 1,333 new rooms).

Not only are there more hotel rooms across Israel, but those hotels apparently are more profitable than in previous years. “Solid growth in demand that began in 2016 has given hoteliers in the country the confidence to push room rates—even as the presence of the sharing economy continues to broaden,” said Thomas Emanuel, STR’s director of business development, in November. “Occupancy comparisons have been fairly flat thus far in 2018, but ADR increases continue to drive positive year-over-year developments in RevPAR. Over the past two years, both occupancy and ADR have been maintained at roughly 10 percent above the previous performance peak in the country. All of this points to a healthy marketplace overall.” 

Top Markets

At the market and submarket levels, Jerusalem has been the top performer in terms of growth. Through the first 10 months of 2018, the market’s occupancy was up 5.3 percent, and ADR increased 12.9 percent. As a result, RevPAR jumped 18.9 percent. 

In absolute values, Tel Aviv has shown the highest absolute occupancy (73.9 percent) and ADR (NIS 939.40). 

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