The head of the hotel association in Israel said Monday that the industry was facing its worst-ever crisis as tourism revenues plummeted in the face of the coronavirus outbreak, and warned that a cash injection from the state was the only thing that could save it from collapse.
“If immediate government aid is not forthcoming, mass layoffs will begin, and the sector will lose over half of its employees,” Israel Hotel Association president Amir Hayek told the Globes financial news website.
His comments came ahead of an expected announcement that travelers from all over the world will be required to enter home quarantine after entering Israel.
“The expected closure of Israel’s borders to tourist entries from the entire world will immediately cost the sector NIS 6 billion [$1.7 billion] a year,” Hayek said. “There will be massive layoffs, and dozens of hotels will close down. The hotel industry has never been in such dire straits. Hotel chains are consolidating hotels that are close to each other, while isolated hotels are on the verge of closing down.”
Hayek said that hotel room occupancy rates have plummeted to under 40 percent, with the worst decline seen in Jerusalem and Tel Aviv. There was particular concern ahead of the April festivals of Passover and Easter — usually a bumper time of year for both Jewish and Christian visitors.
A spokesperson for the Tourism Ministry did not immediately comment, but officials from the ministry were meeting Tuesday with the relevant industry heads to discuss the situation.
Israel was expected to announce Monday a wider set of protocols requiring travelers from all over the world to self-isolate for 14 days after entering Israel, in a move widely seen as an attempt to not single out the United States, where infection rates appear to be rocketing. Israel has already required returning Israelis from several countries to self-quarantine, and barred foreigners from a slew of European and Asian countries.
One tour guide said the problem was compounded by a lack of clear guidance from the government, and some groups were canceling ahead of time due to uncertainty as to whether they will be allowed in for their trips.
Ezra Korman, the CEO of Makor Educational Journeys, said most of the nine groups scheduled to arrive in the next two weeks for his trips have canceled.
“Two and a half of them are still coming, as of now,” he said. “The half refers to a group who are waiting” for a little more clarity from the Israeli government.
Makor is a division of IGT Israel & Global Travel, which had expected to have “dozens of buses” with tour groups in the coming days, and “now it’s down to single digits.”
He spoke to The Times of Israel having spent the previous few hours with a group from Texas, 12 of whose original 25 participants ended up making the trip.
Korman expressed dismay at the lack of clarity from the Israeli government, explaining: “We had a US group that were supposed to tour this week. Seven of them flew in on Thursday, and they’re now on the tour. The rest were supposed to fly out on Saturday night, but there were reports that Israel was about to impose restrictions on arrivals from some US states, so they rebooked for last night.
“Last night, it was still unclear, so they changed to tonight. So the seven who are here are doing the tour, and seven more are waiting till tonight to see if they’ll come and join them.”
In short, he said, “people want to come, but there’s no clarity. And if they’re forced to make a decision amid a lack of clarity, many are not coming.”
Formal groups are being canceled as well as private visits. On Sunday came the announcement that Taglit-Birthright was canceling trips to Israel in the short term “out of an abundance of caution due to coronavirus concerns.” Five-hundred people from the US, Germany and the former Soviet Union have had their trips called off.
In addition, the AIPAC pro-Israel lobby is understood to have postponed a couple of groups that were scheduled to come to Israel in the next few weeks.
A Jerusalem-based journalist said that all three tour groups from the US he was set to brief during their visits to Israel in the next week canceled their trips in the past two days.
Finance Minister Moshe Kahlon on Sunday said that he would be presenting plans to provide credit to businesses, but without mentioning any specific help for the tourism industry.
In addition, Prime Minister Benjamin Netanyau has vowed support for El Al airlines, which started layoffs after massive losses in revenue due to the coronavirus outbreak.
The airline told the Tel Aviv Stock Exchange on Sunday that it expects revenue to decline by $140-160 million for the period from January to April 2020 as a result of the suspension of multiple lines and declining demand in others due to the worldwide outbreak of coronavirus.
Other carriers are also struggling on their routes to Israel as tourism takes a dive — Air France said on Saturday it had halted all flights between Paris and Tel Aviv until March 28. Lufthansa, Air France, Alitalia, Iberia and Wizz Air have all cut back or halted flights to Israel.
Meanwhile, the Israel Airports Authority said it would be consolidating all international flights from Ben Gurion International Airport Terminal 1 to Terminal 3 as of March 14 through to the end of April.