Survival is name of the game

SHARON KANON SPECIAL TO THE JEWISH BULLETIN

With the plunge in foreign tourism to Israel in the last two years (a drop of 76 per cent), the local hotel industry is bending over backwards to survive. Four hotels have closed in Netanya, a favorite vacation city, and five have closed in Nazareth. Ask anyone in the hotel business and they will use words like "grim," "bad," or, in Hebrew, "al ha panim" ("on its face") to describe the difficulties.

Despite a spurt of activity during the High Holidays and Sukkot, hotel managers are worried. The big question is: how will they be able to get through the next few months – the after-holiday season – when the forecast for occupancy is 30-35 per cent at best?

In order to help the country's hotels get through the bad times, the Israeli government has approved subsidized loans, a 50 per cent cut in city property taxes and a marketing fund to reach special markets.

Israel's hotels have lost some $600 million US in the last two years, despite having cut costs, increased efficiency and implemented some innovative concepts.

"We have opened special floors for cardiac patients needing to recuperate after surgery and for mothers needing pampering and rest after childbirth," said Ra'anan Orenstein, deputy manager of the Sheraton Four Points in Jerusalem. "Our housekeeping is out-sourced and so is our food and beverage department. This way we do not need to maintain a large staff."

The picture for 2002, however, was not all gloomy. To offset the decline in foreign tourism, the hotel industry offered Israeli vacationers "deals you can't refuse." Judy and Zev Miller and their infant daughter stayed in the Hyatt in Jerusalem for three nights in July. The price, $70 a night per couple, included breakfast and free entry into museums and major attractions subsidized by the Jerusalem municipality. "We also got one free dinner," said Judy. "The whole package was an amazing offer for a five-star hotel."

"Israeli tourism increased by 18 per cent as a result of such deals," said Avi Rosenthal, director of the Israel Hotel Association, with the biggest increases occurring in Eilat, the Dead Sea and the kibbutzim. "But the hotels are selling more than rooms," he added. "Many packages include food festivals, concerts, theatre and museums." An Isrotel initiative, for example, involved co-operation with the Batsheva Dance Company, Israel's foremost modern dance troupe. In mid-October, hotel guests received two free tickets per room for sold out performances of Anaphase (2,500 people a night for two nights) in the beautiful setting of the Timna Copper Mines, used in the days of King Solomon.
The Sheraton Moriah in Tel-Aviv is offering guests a romantic "White Silk Night" – a 24-hour luxury package that includes champagne, flowers, satin sheets, massages and a candle-lit gourmet dinner served in the room by a private waitress. This popular package, priced at $230, is in such demand that it has a waiting list.

The hotel also offers picnic baskets, bicycles and fishing gear to its guests and holds spiritual and self-awareness weekends. Programs pinpoint single adults, students and pensioners. In co-operation with a local gourmet magazine, courses in making sushi are offered. Probably the most way out idea was to use the hotel lobby for a boxing match (in co-operation with the Israel Boxing Federation). Don't knock it. Survival is the name of the game.

"We have to develop programs in keeping with the changing face of the market," said Avi Levy, manager of the Sheraton Tel-Aviv.

Many hotels have begun catering to the Orthodox religious market, which has large families and is a boon for holidays and special events such as weddings and b'nai mitzvah.

Tel-Aviv, a city for tourism and international business conferences, has suffered particularly in the last two years. Many conferences are held in Cyprus instead of Israel.

"There were practically no tourists from abroad in Tel-Aviv," said Art Miller from Springfield, Mass., who was in Israel recently visiting his married daughter and grandson.

"Usually, 80 per cent of hotel guests come from abroad, and about 20 per cent from Israel," said Rosenthal. "Now the proportions have reversed. This year, less than 20 per cent were foreign and 80 per cent were domestic tourists. In the year 2000, three million foreign tourists came to Israel, which brought in some major income for the economy. With more than 50,000 hotel rooms in Israel, it's not possible to rely on Israelis alone to fill them. In order to be profitable, we have to have foreign tourists."

The 58 per cent increase in foreign tourists to Eilat in August was an encouraging sign. Israel's beautiful Red Sea resort city, far from the centre of the country, was back as a European tourist destination. "Many were Jewish tourists from France who vacationed in Algeria or Morocco two years ago, but now prefer Israel," said Yigal Zoref, sales manager for the Dan Hotels chain in Israel. "We had 90 per cent capacity in our two hotels in Eilat."

"Our three hotels in Jerusalem – the King David, the Dan Panorama and the Dan Pearl – all had relatively high occupancy in September for the holiday season," reported Zoref. One of the marketing innovations the Dan began last year was a Web site and the "e-dan" club, which offers benefits and points towards free nights and meals.

"We always come to Israel in August," said Eve Kandler of London, one of the few English speakers in the lobby of the Ramada Renaissance in Jerusalem. "This time we've come to celebrate our daughter Naomi's 18th birthday. She plans to study in Israel for a year. The news reports haven't deterred us from coming here."

In fact it is the loyal Jewish and Christian tourists with a strong attachment to Israel who gave a big boost to Jerusalem's hotels during the recent holiday season.

"The capital's hotels had almost 60 per cent occupancy," said Rosenthal. "We were pleasantly surprised. They were mostly tourists wanting to show that they identify with Israel." They included 2,000 people from 70 countries brought by the International Christian Embassy for its annual Sukkot solidarity week with Israel.

The hotel association hopes that more groups can be influenced to come on solidarity missions and that the tourism industry can convince tour groups abroad that life goes on as usual in Israel. Last year the Birthright program, which brings Jewish youth to Israel for an Israel experience, brought in $30 million. A fringe benefit of the program, which aims to strengthen Jewish identity and a bond with Israel, is that these young people also promote tourism. I had a chance to talk to a group from Canada this summer. They were brimming over with enthusiasm, telling about their action-packed trip, guides, hip security guards, experiences and friendships. Asked if they would tell people to visit Israel, they overwhelmingly answered, "Of course."

"Tourism is basically an optimistic industry," said Rosenthal. "Once the geopolitical situation improves – that is, when we've reached a modest goal of peace and quiet for a couple of months – it will only take us six to 12 months to bounce back. Israel is still one of the most attractive tourist centres in the world for vacationers. Where else can you get the Holy Land, history, health spas and warm weather?"

Sharon Kanon is a writer with the Israel Press Service.

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