Israeli Hotels Facing a Crisis As Jewish Tourism Drops Sharply

Israel’s hotel industry is facing a crisis. Tourism, particularly Jewish tourism, has declined sharply in recent months, since the Palestinian uprising in the administered territories began and became a staple of nightly television all over the world. Representatives of the Hotel Owners Association met here Sunday with Tourism Minister Avraham Sharir to discuss the situation.

The association’s chairman, Eli Paposhado, said figures showed that some non-Jewish tour groups and individuals, especially those from West Germany, have been loath to cancel their bookings. But Jews from the diaspora are canceling in droves, he said. Paposhado and his colleagues asked the government and the World Zionist Organization to launch a worldwide campaign immediately among Jews, urging them to visit Israel “davka (especially) at this time of difficulties for us” in Paposhado’s words.

He and other tourism officials stressed that holidays in Israel could be enjoyed without any fear of discomfort or danger.

But that assurance has yet to reach the tourist market overseas, especially Jews who normally account for 70 to 80 percent of visitors to Israel each year.

The situation is such that Jerusalem’s newest, largest and most modern hotel, the Hyatt, was forced Monday to issue a denial of rumors that it was contemplating closure for lack of bookings.

The management insisted the rumors were unfounded and spoke of plans to add a million-dollar health spa to the hotel. It hopes to weather the present lull in overseas bookings by attracting Israeli guests.

But the Hyatt’s occupancy rate is down to 40 percent, considered unsatisfactory. The management hinted that this situation could not continue indefinitely.

SUMMER PROMISES DISAPPOINTMENTS

The hotel industry as a whole is in the same perilous state. The Passover-Easter season that recently ended was weak, and the summer high season promises further disappointments. Cancellations exceed new bookings.

The Hyatt may be particularly vulnerable because it is located in East Jerusalem, at the foot of Mount Scopus, and because it opened only last year. But other hotels are feeling the pinch too.

Many of the smaller ones have closed for lack of business. Luxury five-star establishments in West Jerusalem report occupancy rates below their break-even points. The Jerusalem Hilton said Sunday that its present rate is 30 percent against a break-even rate of 50 percent occupancy.

Hotel industry sources say the Tourism Ministry has been trying to “dress up” the statistics by comparing March 1988 tourism with March 1987, showing a slight rise. The sources point out that Passover occurred late in April in 1987, whereas this year it began April 1, which accounted for increased tourism in March. Moreover, this year Passover and Easter coincided in the same week.

But the hotel industry as a whole has a good deal of resilience. It had an exceptionally good year in 1987 and could have another good year if the disturbances in the territories end.

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