Building
on its success

Tel Avivians enjoy lunch on a pedestrian street in Jaffa, the southern and oldest part of the city. TW photo by Johanna Jainchill

Tel Avivians enjoy lunch on a pedestrian street in Jaffa, the southern and oldest part of the city. TW photo by Johanna Jainchill

Tel Avivians enjoy lunch on a pedestrian street in Jaffa, the southern and oldest part of the city. TW photo by Johanna Jainchill

TEL AVIV — Even in an era of booming global travel, Israel’s success stands out. The pint-size country has made huge gains in its tourism numbers over the past few years.

In 2018, Israel attracted a record 4.1 million visitors, 14% more than in 2017 and a whopping 42% more than in 2016. And 2019 shows no sign of any slowdown, with 683,000 visitors in January and February marking an increase of 16% compared with the same period last year.

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Hoteliers have taken note. In 2018 alone, 3,829 hotel rooms opened, a year-over-year increase of 49%. They included the highly anticipated Setai Tel Aviv and the Jaffa, a Luxury Collection Hotel. Opening this year is a Six Senses resort and a Nobu Hotel, among many properties.

El Al is launching nonstop flights between here and both Las Vegas and San Francisco this year; it will add Chicago in 2020.

Myriad factors have contributed to Israel’s success, but one thing that travel advisors and suppliers seem to agree on is that the Israel Ministry of Tourism deserves much of the credit. The ministry shifted its strategy in recent years from targeting only religious groups — 61% of Israel tourists self-identify as Christian — to marketing to adventure travelers, the LGBTQ community and foodies, among other niches.

Adrienne Sasson of Rubinsohn Travel in Jenkintown, Penn, at an amphitheater in the ancient city of Beit Shean near the Sea of Galilee.

Adrienne Sasson of Rubinsohn Travel in Jenkintown, Penn, at an amphitheater in the ancient city of Beit Shean near the Sea of Galilee.

Adrienne Sasson of Rubinsohn Travel in Jenkintown, Penn, at an amphitheater in the ancient city of Beit Shean near the Sea of Galilee.

“The way Israel was originally thought of was a place to go because you’re religious, and you go to the religious areas and then you go home,” said Adrienne Sasson of Rubinsohn Travel in Jenkintown, Pa.“That’s what a lot of the old marketing was. If you’ve paid attention lately, the marketing is totally different and made to be sexy and cool and to say, ‘Yes, you can go to Jerusalem and see these wonderful historical sites and then come to Tel Aviv to party at night.’ Kudos go to the tourism ministry because they realized they had to change their image.”

Sasson sensed the change when the ministry stopped sending her lists of what she describes as “unqualified” leads: people affiliated with houses of worship who “would like” to go to Israel.

‘Israel’s true market is not selling only religious tours. There is too much else to do.’
– Adrienne Sasson, Rubinsohn Travel

“Their true market is not selling only religious tours,” she said. “There is too much else to do. Rafting down the Jordan River, rappelling up the face of a mountain in the desert, hiking up Masada instead of taking the cable car, going to one of 227 wineries or to a craft beer brewery.

Now they are playing up gay pride because Tel Aviv has one of the biggest gay pride festivals in the world. Seven or eight years ago, they didn’t do that.”

Eyal Carlin, director of the ministry’s overseas department, agreed, saying the ministry has become more sophisticated in its marketing, part of which was “moving ourselves out of the stereotypes of who our target audience is.”

The ministry also realized it needed to look at the faith-based traveler as being motivated by more than religion.

“That traveler is also interested in food, adventure, sports and outdoor travel,” Carlin said. “If you ask a person, maybe he came because it’s the Holy Land, but what he enjoyed most was the restaurants. And that’s what he’ll speak about and what may motivate others to come.”

Part of the ministry’s new approach is to reach the Christian demographic not by focusing on Christian media as it had previously done but by finding those travelers through mainstream media.

“We now recognize that there’s a higher likelihood that someone who goes to church and has a Christian motivation to go to Israel will see our commercial on ESPN or through a prime-time reality show,” Carlin said.

The ministry has also invested much more heavily in advertising digitally, offline and on TV. Three years ago, Carlin said, its investment in offline and TV advertising was almost nothing; this year it will be close to $27 million. Its ads have changed, as well, focusing not on Israel as a whole but on specific segments, such as the urban product, adventure, desert travel and the meetings, incentives, conventions and exhibitions segment.

Carlin said the ministry also stepped up its co-op agreements with tour operators as well as OTAs such as Expedia and Priceline.

“Plus, we’ve been on the ground,” he said. “We are doing more with travel agent seminars and conferences and are involved with consortia like Virtuoso, Signature and Ensemble.”

Carlin said the ministry has been reaching out more frequently to ASTA, which will hold its annual Destination Expo here in November.

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Tel Avivians drink coffee on a street in Old Jaffa. Tel Aviv and Jaffa are full of colorful street murals. TW photo by Johanna Jainchill

Tel Avivians drink coffee on a street in Old Jaffa. Tel Aviv and Jaffa are full of colorful street murals. TW photo by Johanna Jainchill

Tel Avivians drink coffee on a street in Old Jaffa. Tel Aviv and Jaffa are full of colorful street murals. TW photo by Johanna Jainchill

Sophisticated security infrastructure

Of course, any discussion of tourism and Israel must include the safety factor. And Israel’s tourism success is in no small part due to the global proliferation of terrorism, especially once European capitals and the U.S. became terror targets.

“That barrier came down because the global traveler recognizes that you can be unsafe anywhere,” Carlin said, “and at the same time, Israel is no longer perceived as an unsafe place.”

 Hannah Blustin, founder of Pomegranate Travel, a luxury Israel destination management company, with Tel Aviv behind her.

Hannah Blustin, founder of Pomegranate Travel, a luxury Israel destination management company, with Tel Aviv behind her.

Hannah Blustin, founder of Pomegranate Travel, a luxury Israel destination management company, with Tel Aviv behind her.

Hannah Blustin, founder of Pomegranate Travel, a luxury Israel destination management company based in Tel Aviv, works with travel agents and tour operators.

“People are becoming less risk-averse,” she said. “They know you won’t be 100% safe in London or Paris or anywhere.”

And because Israel had to deal with terrorism first, its security apparatus is more developed than in other places.

'People are becoming less risk-averse, they know you won’t be 100% safe in London or Paris or anywhere.'
— Hannah Blustin, Pomegranate Travel

“Now Israel is comparatively viewed as safer,” Blustin said. “They’re used to it.”

Ronen Paldi, president of Yalla Tours, which has been operating in Israel since 1993, agreed that the country is now perceived as a safe destination. For example, he said, flare-ups like the recent incident of missiles fired from Gaza into Israel and Israel’s subsequent retaliation “had zero effect on traffic.”

That is partly thanks to what Carlin describes as the intense focus on domestic politics, specifically in the Trump era.

“The U.S. media is much more absorbed by domestic politics,” he said. “Something that CNN would run for 48 hours before, they now run for two hours because something else is happening domestically in the U.S.”

Blustin also pointed to an extended period of “relative calm” in the region as helping Israel’s popularity.

“Egypt is really coming back, and people want to combine it with Israel,” she said, adding that 30% to 35% of Pomegranate’s tour clients visit Jordan, as well.

Pomegranate is one of many suppliers to assert that Israel demand is sky-high.

“It’s crazy,” Blustin said. “We are extremely busy. There is a much heavier and more consistent flow of inquiries from the U.S. and more inquires from other countries, as well, like Germany, Mexico, Brazil. The U.K. is also very strong.”

Blustin said there has also been an increase in the incentive market.

“These groups are not coming for ethnic or religious reasons,” she said. “They are predominantly hedge funds and corporations bringing their teams to Israel for its association with innovation, great food, inspiring speakers and opportunities for some crazy outdoor parties, for example in the desert.”

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The Poli House is a restored Bauhaus building that the Brown Hotels Collection converted into a modern, stylish hotel with a rooftop pool offering views of the Mediterranean. Photo by Assaf Pinchuk

The Poli House is a restored Bauhaus building that the Brown Hotels Collection converted into a modern, stylish hotel with a rooftop pool offering views of the Mediterranean. Photo by Assaf Pinchuk

The Setai Tel Aviv opened last year in a complex that dates to the 12th century and has been used as a fortress as well as a prison and a police station. Photo by Assaf Pinchuk

The Setai Tel Aviv opened last year in a complex that dates to the 12th century and has been used as a fortress as well as a prison and a police station. Photo by Assaf Pinchuk

The lobby of the Jaffa, a Luxury Collection Hotel, features a Damien Hirst painting and backgammon tables. Photo by Amit Geron

The lobby of the Jaffa, a Luxury Collection Hotel, features a Damien Hirst painting and backgammon tables. Photo by Amit Geron

The Poli House is a restored Bauhaus building that the Brown Hotels Collection converted into a modern, stylish hotel with a rooftop pool offering views of the Mediterranean. Photo by Assaf Pinchuk

The Poli House is a restored Bauhaus building that the Brown Hotels Collection converted into a modern, stylish hotel with a rooftop pool offering views of the Mediterranean. Photo by Assaf Pinchuk

The Setai Tel Aviv opened last year in a complex that dates to the 12th century and has been used as a fortress as well as a prison and a police station. Photo by Assaf Pinchuk

The Setai Tel Aviv opened last year in a complex that dates to the 12th century and has been used as a fortress as well as a prison and a police station. Photo by Assaf Pinchuk

The lobby of the Jaffa, a Luxury Collection Hotel, features a Damien Hirst painting and backgammon tables. Photo by Amit Geron

The lobby of the Jaffa, a Luxury Collection Hotel, features a Damien Hirst painting and backgammon tables. Photo by Amit Geron

A cultural polyglot

As the only Jewish majority country, Israel is a globally unique destination. Like the U.S., the ethnicities of its population span the globe, from Iraq to Poland, Uzbekistan to Morocco, and 20% are Arab Israelis.

Israel is both a religious and a gay mecca. It is old and new, with ruins that are thousands of years old and also one of the world’s top tech sectors. Locals sip coffee on the promenades of Tel Aviv in scenes reminiscent of the French Riviera, while its vast deserts are a gateway to Jordan and beyond.

Spices on display at the Carmel Market, or shuk, which opened in 1920 and is the largest such market in Tel Aviv. TW photo by Johanna Jainchill

Spices on display at the Carmel Market, or shuk, which opened in 1920 and is the largest such market in Tel Aviv. TW photo by Johanna Jainchill

Spices on display at the Carmel Market, or shuk, which opened in 1920 and is the largest such market in Tel Aviv. TW photo by Johanna Jainchill

In any Israeli city, markets called shuks are a panoply of spices and shawarma, the sounds of Arabic, Yiddish and Hebrew. Tel Aviv, full of art galleries and murals, is as famous for its 1930s Bauhaus architecture as for its ancient, winding alleyways in Jaffa.

Michael Gelber, CEO of IWorld of Travel (formerly IsramWorld), said, “It’s a melting pot of religion and cultures and races and sexual orientation. People don’t get it. It’s one of the most advanced countries in the world that holds onto its past in a very respectful and historical way. It’s a very unique experience.”

Leon Avigad is the founder of the Brown Hotels Collection, one of the fastest-growing hotel companies in Israel, with a portfolio expanding into Europe.

Sitting atop the Poli House, a restored Bauhaus building that Brown converted into a modern, stylish hotel with a rooftop pool offering views of the Mediterranean, Avigad said that Israel’s precarious politics and security have helped make Tel Aviv as exciting as it is.

'Tel Aviv is the capital of everything that is cool, hip, fun and creative'
– Leon Avigad, founder of the Brown Hotels Collection

“Because of the ‘carpe diem’ vibe here, missiles and political attacks and intensive cultural and societal situations, Tel Aviv is the capital of everything that is cool, hip, fun and creative,” he said. “And it’s not a trend. It will be that way 20, 30, 40 years from now.”

Abu Hassan in Old Jaffa is one of Israel’s oldest and most famous hummus restaurants. It opens at 8 a.m. and closes when the hummus runs out. TW photo by Johanna Jainchill

Abu Hassan in Old Jaffa is one of Israel’s oldest and most famous hummus restaurants. It opens at 8 a.m. and closes when the hummus runs out. TW photo by Johanna Jainchill

Abu Hassan in Old Jaffa is one of Israel’s oldest and most famous hummus restaurants. It opens at 8 a.m. and closes when the hummus runs out. TW photo by Johanna Jainchill

Avigad is so confident in Tel Aviv’s allure that he is exporting it. Brown is set to open hotels in Greece, Germany and Croatia, and each will have a hint of Tel Aviv, such as serving the Israeli staple shakshuka, a poached egg dish, in Germany and employing a tabun, a Middle Eastern clay oven, in Croatia to bake Israeli specialties.

Israel’s culinary offerings have become a draw of their own, with Blustin saying its global appreciation is a big part of Israel’s increased popularity; she cited restaurants such as Miznon in New York’s Chelsea Market, which features Israeli street food.

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Adventure travel, like this cycling tour in the West Bank offered by Sababike, is a growing trend in Israel. Photo by Tal Rozov/SabaBike

Adventure travel, like this cycling tour in the West Bank offered by Sababike, is a growing trend in Israel. Photo by Tal Rozov/SabaBike

Adventure travel, like this cycling tour in the West Bank offered by Sababike, is a growing trend in Israel. Photo by Tal Rozov/SabaBike

Infrastructure not keeping up

As is true in many places, Israel’s tourism success does not come without drawbacks and growing pains.

While much of the new hotel and tour product is spread throughout the country, it is a country the size of New Jersey.

Yalla Tours’ Paldi said the current trends are creating operational challenges.

“Demand is tremendously high, and the infrastructure does not meet the demand,” he said. “That is the biggest problem and challenge that we have.”

Yalla stopped selling 2019 tours at the end of last year and is already heavily booking 2020.

“Parking is a major problem. Traffic in Jerusalem is a major problem,” Paldi said, only half-joking that finding parking on the city’s Mount Zion was a “mission impossible.”

Paldi said that when Yalla launched Israel itineraries, the average “pilgrimage” it offered was seven nights. It gradually increased to nine, and now he recommends no fewer than 10 or 11 nights.

“Not because there are new biblical sites discovered, [but] because we need more time to visit the same sites,” he said.

For example, he said, crowds at the Capernaum ruins on the Sea of Galilee have swelled so much that groups have to sometimes wait an hour in line to enter.

“We need to allow the time for that. I’ve been here for two decades, and I see and feel a huge difference in terms of lines and traffic,” he said. “That’s why I recommend people take 10 days to do what they once did in seven, because it takes longer to get between places and to wait to enter.”

Blustin agreed that sites are busier than they used to be that, even ones that “you used to have to yourself. Now you have to expect them to be crowded.”

More tourists means more demand for the country’s top guides, and Blustin said there are not enough of them.

“It’s a relatively small country, and there are only a certain number of excellently trained and experienced tour guides,” she said. “In a country as complex as Israel, you want the best guide.”

Even during what travel agents say used to be off-peak times, hotel availability is tight, driving up rates.

Sasson said, “March was traditionally not peak season. It was a great time to go, the shoulder season. Rates were amazing. I was in shock at what my rates were for March 2020 — in shock.”

Part of the problem is that Israel has long faced a hotel room shortage.

For example, between 2007 and 2017, hotel inventory increased by about only 4,000 rooms, a 10% increase at the same time in which tourism to the country increased 100%.

'Ten years ago, there was a shortage of 3,000 to 5,000 hotel rooms. Ten years later, it’s even wider, even with all the new hotels, because the demand is getting higher and higher all the time.'
– Leon Avigad, founder of the Brown Hotels Collection

“We are running 90% occupancy,” Avigad said of Brown’s six properties. “There is huge demand year-round. Ten years ago, there was a shortage of 3,000 to 5,000 hotel rooms. Ten years later, it’s even wider, even with all the new hotels, because the demand is getting higher and higher all the time.”

Brown is trying to build more hotels as quickly as it can: It is adding six properties and 692 rooms to its Israel collection in the first and second quarter of this year alone, including its largest property to date, the 200-room Hotel Bobo.

The Israel Ministry of Tourism would like to see even more of this, but Carlin said he would not call the current situation a shortage, at least not yet.

“We are getting to that point,” he said. “The supply is still enough to hold the amount of tourists coming, but once we reach 5 million tourists — if it doesn’t happen in 2019, it will happen in 2020 — we’ll be at capacity.”

Airbnb has made up for some of the hotel shortfall, with more than 5,000 listings in Tel Aviv and 2,000 in Jerusalem.

To help incentivize investors and developers to build new hotels or convert existing spaces, the Israeli government offers subsidies of up to 30% of the cost of the hotel, a program in which it invested $40 million last year. The government also streamlined the permitting process, part of what Carlin describes as Israel recognizing tourism as “a national priority.”

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Israel bolsters tourism
infrastructure with new airport

Israel is working hard to spread tourism beyond its highly trafficked holy sites. One of its signature projects to achieve this is the $474 million international airport near Eilat that opened this year.

The Ilan and Assaf Ramon Airport opened in January and welcomed its first international flight in March. The airport is currently served mostly by European low-cost carriers as well as some legacy airlines like Lufthansa and Finnair.

However, Eyal Carlin of the Israel Ministry of Tourism said he hopes it will also attract flights from the U.S.

“It gives a lot more opportunity to see the different parts of the country,” he said. “It’s something that opens the possibility to enter via Ramon in the south, travel to Eilat, to Jordan, to the Negev desert and continue on to Jerusalem and then to Tel Aviv and fly out on their carrier to the U.S. or Europe.”

Ilan and Assaf Ramon Airport opened in January and welcomed its first international flight in March. (Photo courtesy of Mann Shinar Architects and Planners in partnership with Moshe Zur Architects)

Ilan and Assaf Ramon Airport opened in January and welcomed its first international flight in March. (Photo courtesy of Mann Shinar Architects and Planners in partnership with Moshe Zur Architects)

Ilan and Assaf Ramon Airport opened in January and welcomed its first international flight in March. (Photo courtesy of Mann Shinar Architects and Planners in partnership with Moshe Zur Architects)

Carlin said the airport was not built to counter capacity issues at Tel Aviv’s Ben Gurion Airport but to “better serve the south of the country and bring in tourism to the south of the country.”

However, Ben Gurion, bracing for an estimated 25 million travelers this year, is in the process of a major expansion. The airport will spend $280 million to expand its main international terminal and reduce wait times by adding 88 check-in counters, among other improvements.

The expansion comes on the heels of the opening of a new concourse last year, which added eight gates.

Israel’s increased airlift is another testament to the ministry of tourism’s success in driving visitation. As it does with hotel developers, the country encourages carriers to fly to Israel by offering incentives.

The government will pay carriers that operate direct flights to Ramon Airport about $65 per passenger.

If an airline launches service to Ben Gurion from an unserved destination, the ministry will give them a $275,000 destination-marketing grant per frequency.

–J.J.

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