Travel & Tourism

The tourism market includes both inbound and outbound tourism.

 

Inbound tourism

The abundance of holy and historical sites in Israel attracts many tourists from all over the world, especially Jews and Christians. The mid-eastern climate and variety of landscapes and beaches also attract many. However, Israel struggles to compete with other destinations that are close to it geographically for two main reasons.

First, the widespread perception of Israel as a dangerous place. During period in which the security situation is unstable, tourists avoid this destination, and this continues for a while even after peace resumes.

Recovery of incoming tourism from period of unstable security can last for a long time.

Second, the high cost of living affects both citizens and tourists. Israel competes with alternative travel destinations that are far cheaper. Prices of accommodation in Israel are very high, mostly due to regulation which raises the cost of hotel construction and maintenance. Regulations that hotel owners must cope with include long and complicated procedures of planning and construction approvals, Kosher certification, security, lifeguard services, fire and emergency regulations and more. In addition, the minimum wage is higher in comparison with neighboring countries. All of the above, and more, combine to higher accommodation prices and make it difficult for local hotels to compete with those in other nearby countries.

Outbound tourism

The Open Skies agreement between Israel and the EU is gradually changing outbound tourism. This agreement, which went into effect in 2014, encouraged many low-cost airlines to enter the market, creating many new flight routes for scheduled and low-cost airlines to new destinations. The increase in competition,

along with the drop in gas prices, caused flight prices to drop drastically, making flights far more affordable and allowing a greater number of consumers to travel overseas, with some even flying several times a year.  As a result, we have seen a substantial rise in outbound tourism during the past few years.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development of e-commerce in tourism:

Among the various retail markets, tourism is one of the markets in which e-commerce is developing most rapidly. Accessibility of verbal and visual information, the ability to compare various options and the ease with which booking can be done online have all contributed to consumers' shift to booking flights and accommodation online. Booking websites and applications such as Booking.com and Trivago have become very popular among Israelis. Therefore, they will typically begin searching for accommodation or flights in these websites, even if they do not actually book through them.

Another online accommodation booking platform which has gained popularity in recent years is Airbnb. The lack of regulation and taxes allows Airbnb to offer tourists far lower prices than hotels, attracting tourists with lower budgets who would previously be unable to afford a visit in Israel.

 

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