Faced with a global economic crisis, missile attacks, and a war with Hamas, the Israeli tourism industry is dealing with tough times. After witnessing a boom in visitors for the last 3-4 years, ‘09 is shaping up to be a year not seen since 2001-03 when the internet bubble burst and 9-11 happened.
The Israeli Ministry of Tourism is pushing a $6.5 million campaign aimed at getting tourists back to the holy land.
According to the Jpost: “The
marketing campaign will aim to show that Israel is a safe place for tourists, the
ministry said, adding that work has begun on a program of activities to increase tourism, including advertising campaigns, participating in fairs worldwide and meeting with the largest tourism wholesalers.This month the
ministry hopes to target Germany, Russia, Italy and France. Soon thereafter, the plan calls for advertising campaigns to target North America and Britain, as well as varied marketing activities in South Korea, Poland, Brazil and China.”
What would be interesting to see is where the drop in tourism is coming from. Is it Jewish tourists, who have really been hit by the economic meltdown, that have stopped coming? In the past we have seen that Christian tours that focus on holy places have showed strength when other groups have cancelled trips. Is the same theme going to hold true this time as well?
Believe it or not but the current turmoil taking place in South Ossetia, and the capital, Tskhinvali is impacting Israeli businessman as well. According to report in Globes, ” The former Georgian ambassador to Israel estimates that Israeli real estate, defense, and other investment in Georgia exceeds $1 billion, and that the Russia-Georgia war is putting these investments at risk.”
Tourists have started returning to Israel and companies located in the surrounding areas have begun to evacuate their employees. Israel has come under pressure over the last 24 hours to halt arms sales to Georgia. The Jpost reports that actually, Israel halted shipments of arms a couple of months ago as the government sensed that conflict was imminent. According to an Israeli defense official, the article quotes: “Several months ago, we carried out an evaluation of the situation in Georgia and realized that Georgia and Russia were on a collision course. We have good relations with both, and don’t want to back either in this conflict,” the official said. “We therefore made a decision to drastically minimize sales of weapons to Georgia.”
Israel has successfully forged very good relations with both Russia and Georgia. Let’s hope that this current conflict doesn’t change that.
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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
