Israel Looks Forward to Hotel Sector Returning to Previous Peak Levels
JNS.org – After a record-breaking year in 2019 that saw 4.5 million tourists, industry experts believed that Israel was well on the way to achieving another record in 2020. And then came the coronavirus, and everything crashed, including Israel’s hotel industry.
Still, all is not lost.
More than 300 Israeli and foreign entrepreneurs, senior executives from international hotel chains, property owners and real estate agents from 32 countries, including the United Arab Emirates, participated in an annual conference on Sept. 1 that focused on the future of Israel’s hotel industry. This year, due to restrictions imposed due to COVID-19, the conference took place via Zoom.
Israel’s Minister of Tourism Asaf Zamir opened with his remarks based on optimism. According to Zamir, “as a country accustomed to emergency situations that knows how to return to routine faster than other countries in the world, we will help the tourism industry in this crisis as well.”
He said his ministry would do its “utmost” to ensure that hotels “can get through this difficult time, to allow them to remain open even now and to promote the speedy return of incoming tourist groups within the capsule format.”
With millions of people eagerly waiting to visit Israel again, Zamir added that “this is the time to invest in the tourism industry [with] its enormous potential.”
Hotels did serve a valuable purpose during the height of the pandemic in April and May with rooms used to isolate infected Israelis, with the program starting up again in August as a second wave of infections spread through the Jewish state.
The webinar, titled, “The Path to Recovery: Focus on the Israel Hotel Sector,” was initiated by the Israel Ministry of Tourism in cooperation with international hotel consultants HVS London, and was moderated by Lorin Maugery, head of foreign investor relations at Israel’s Ministry of Tourism.
‘How to thrive in periods of uncertainty’
The HVS Annual Report on Hotels in Israel, presented during the online conference, predicted that by 2024, Israel will “return to the peak of 2019.”
Chairman of HVS London Russell Kett and senior associate Simon Huttel said they believe that “the hospitality industry in Israel will recover and, as in the past, this downturn will create the opportunity for strong returns through well-timed and well-executed investment strategies.”
Mirroring Zamir’s remarks, HVS said it is “cautiously optimistic when considering the Israel hotel industry’s ability to recover at an accelerated pace compared to other countries in the Mediterranean region. Although this crisis is unprecedented and still deeply uncertain, Israel’s hoteliers have had an exceptional experience on how to thrive in periods of uncertainty.”
Other participants of the seminar included Tourism Ministry Director-General Amir Halevi, who spoke about Israel’s efforts to further develop tourism in the Negev, and Thomas Emanuel, director of STR, a company that provides premium data benchmarking, analytics and marketplace insights for global hospitality sectors. He presented a report on the recent and current performance of hotels in Israel.
Emanuel noted in his presentation that hotel occupancy “has a long way to recover.”
His conclusions showed that the travel ecosystem is showing signs of life; however, travel restrictions remain. Hotels have mostly reopened with the domestic leisure business driving the recovery so far. He noted that new demand potential exists due to the geopolitical situation.
The webinar also featured a panel discussion with the participation of Carmit Bar-On, partner Meitar Law, Hotel and Leisure practice; Alexis Delaroff, COO New East, Accor; Jonathan Falik, founder and CEO JF Capital Advisors; Shirly Kaplan, Bank Leumi, head of the tourism sector; and Ronen Nissenbaum, president and CEO, Dan Hotels Ltd.
The HVS report also noted that Israel’s RevPar outlook (Revenue Per Available Room is a metric used in the hospitality industry to measure hotel performance) “envisages a 60 percent decrease in 2020 followed by a sharp increase, driven primarily by occupancy, in 2021. Occupancy is expected to recover by 2023, followed by average rate a year later (in real terms).”
The report made sure to add that “the situation remains fluid; forecasts may change as time passes and as more light is shed on the rate of recovery.”