Israel’s Tourism Industry Begins Leaving COVID Behind but Problems Remain

Israel’s Tourism Industry Begins Leaving COVID Behind but Problems Remain

National carrier El Al reports revenue like before COVID, even without full capacity

Israel’s national airline, El Al, reported revenue for the third quarter of 2022 at figures like those before the pandemic began. Together with the number of tourists entering the country during the period reported by the Tourism Ministry, this indicates a near-total recovery of the Israeli tourism industry. But some challenges remain to be dealt with.

EL AL reported revenue of $626 million from July to September, which is about three times the revenue that the company reported at the end of the same quarter in 2021. The Israeli flag carrier also reported $640 million in bookings from September to November.

“The volume of revenue in the third quarter is similar to pre-corona levels, while the aircraft fleet was operating at only 72% of capacity, compared to the corresponding quarter in 2019,” El Al said in a statement on Thursday.

Alex Coman, a senior Israeli economic consultant, told The Media Line that EL AL, like many other international airlines, has “recovered virtually completely from the COVID crisis.”

Kobby Barda, deputy director-general of the Tourism Ministry, noted that Israel’s tourism industry has also registered an increase in the number of tourists entering the country. For one example, in August the country broke a record of incoming tourists from the United States.

“We do see impressive numbers of tourists coming to Israel,” Barda told The Media Line. He added that the Tourism Ministry is very optimistic about the direction in which the industry is developing. However, he said the industry, devastated during the pandemic, still faces some of its ramifications today.

The biggest issue, said Barda, is the worldwide lack of workers in the industry. “You can see this all across the tourism infrastructure anywhere in the world, from hoteliers down to immigration customs inspectors, among others,” he said.

A second difficulty, he added, is the collapse of the supply chain. He noted how because of that, many sectors of the industry have no access to the materials or assets that they normally use to operate. For instance, he cited the industry’s problem with the availability of flights.

Said Coman, “Airlines are doing extremely well; people have started to leave the country after feeling claustrophobic.” To meet the surging demand for flights and destinations, he added, “You can see companies leasing airplanes from other airlines.”

“These are things that still haven’t been solved and nobody knows if they will be solved,” said Barda. One example is China, whose zero-COVID policy will stay in effect until 2027, and this could be reflected in various ways on the supply chain.

Barda asserted that the signs of Israeli tourism’s recovery indicate the importance of the fact that Israel needs another airport in the North before experts say the country’s airports could reach full capacity by 2026.

“We might get to the point, in three or four years, where we will not be able as a country to supply slots for planes to come to Israel,” he said, adding, “I think it’s very urgent for the new government to start to deal with this.”

Meanwhile, the Tourism Ministry is working on different ways to get tourists to Israel, such as the cruise ship industry or increasing the number of low-cost airline flights from Europe to Eilat’s Ramon Airport, in the South of the country.

Coman expressed wonder at the high number of tourists arriving in Israel, considering the current high rate of the Israeli shekel. “I think foreign tourism has almost come back to normal, which is very surprising because the shekel is very strong. The fact that the shekel is strong makes tourism in Israel expensive,” he added.

Coman predicted that the fact El Al is doing so well will have positive effects on the country’s economy. “EL AL is the major airline in Israel. It employs pilots, technicians, and ground support, and there is a whole industry developed around it. Since EL AL is not a low-cost airline, it includes catering as well as other services,” he said.

However, he added, as the airline returns to normal, he anticipates seeing “strikes, or bodies of employees demanding that their salaries go return to the level they were before COVID.”

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