Israel will build it so they will come

JERUSALEM—For a tiny country, Israel has a lot to offer: sacred sites, archaeology, beaches, mountains, food, wine—and even eco- and medical tourism. So officials are puzzled and concerned that the number of tourists visiting Israel has not grown much in recent years, topping out at 3.6 million per year.

At a conference on tourism held in the capital, Jerusalem Mayor Nir Barkat said that in the near future he hopes to increase the number to 10 million tourists annually. But a lack of hotel rooms, Israeli bureaucracy and the ongoing violence in the region all stand as obstacles to his vision.

“The aspiration to have 10 million tourists, which is three times what you have now, seems a big hill to climb, but with the hotels being built here you’re well-placed to take advantage of the growth of tourism in general,” Alison Copus, vice president for marketing at Tripadvisor, told The Media Line. “Israel is doing pretty well on our site—it’s got a 54 percent increase in people looking to come to Israel and searching for hotels and places to visit.”

Yet, interest in Japan is growing at 119 percent, “so Israel could be doing better.” In fact, Copus warned, interest in Israel from Russia, Spain, France, Germany and the United Kingdom is actually decreasing, so Israel must try harder to regain these markets.

There is also a shortage of rooms, especially in Jerusalem and Tel Aviv, although new hotels such as the Waldorf-Astoria are currently under construction, Israeli hotels are expensive, with five-star properties in the capital going for $500 per night, beyond the budget of many visitors.

“German tourists want to spend $200 per night on a room, and then spend more on entertainment and restaurants,” Ilanit Melchior, of the Jerusalem Development Authority and one of the tourism conference organizers, told The Media Line. “We are working hard in the center of the city to develop more hostels and boutique hotels.”

Prospective hoteliers also find the Israeli bureaucracy hard to manage.

“It takes many years to build a hotel,” David Fattal, the CEO of Fattal, which has 30 hotels throughout Israel and plans to build more, told The Media Line. “Plenty of people, including the government and the municipality, get involved in the planning process. If you are lucky, you can get the first permit in two years and then it can take five more years for final approval. But I also know cases where it takes 15 years or more.”

Fattal says it can be frustrating to deal with Israeli bureaucrats.

“Something in the system is wrong—too many people have the power to say ‘no’ instead of giving them the power to say ‘yes.’”

Kevin Bermeister, CEO of the Jerusalem Development Fund, has a simple solution to the challenge of attracting more tourists to Israel.

“Build rooms, build rooms and build more rooms,” he told The Media Line. “Jerusalem is inherently attractive to two billion people around the world. Once we can accommodate those people, they will come.”

Bermeister also agreed that there should be more lower-end rooms—in the $150 to $200 range, and said Israel must try to attract international hotel brands.

Melchior said she recently hosted representatives from major hotel chains including Starwood and Marriot—corporations the city wants to encourage to invest in Israel and build hotels here.

The threat of violence also plays a role depressing the growth of tourism. Many believe that Israel is in a war zone with rockets exploding daily, and are afraid to visit or invest in Israel. Others say that while Israel might be safe, neighboring Arab countries such as Lebanon and Syria are not, and there are fears that the violence could spill over into the Jewish state.

“The main reason why the Israeli tourism industry hasn’t flourished as in other countries is that we have not yet reached the peace agreement that everyone would like to see with open borders. The minute that happens we will see an influx in tourism,” Rodney Sanders, founder of Sanders and Associates told The Media Line.

However, neighboring Egypt, which has been caught in the throes of a revolution for the past two years, still attracts some 10 million tourists each year. Sanders said that if Israel solves its conflict with the Palestinians there is more likelihood that Egyptian and Jordanian tourists will come.

Some tourism professionals say that Israel has more to offer than just religion and history.

“To build in Israel is not like building in Europe,” according to David Fattal.  “You have to be ambitious and optimistic to finalize all of the stages, but it comes from my heart and I love it.”