In 2006 there were 331 tourist hotels in Israel (hotels recommended by the Ministry of Tourism), with approximately 47,000 rooms. Rooms in tourist hotels constitute 77% of all accommodation rooms. Accommodation rooms also include rooms in hotels which are not tourist hotels, rooms in rural tourism, in youth hostels and in field schools.
Since 1990, the number of rooms in tourist hotels has increased by more than 50%.
The average number of rooms in tourist hotels increased from 34 at the beginning of the 1960’s to 141 in 2006.
In tourist hotels, the average number of beds per room is 2.5, compared to 4 per room in rural tourism, field schools and youth hostels.
36% of the rooms in tourist hotels are in the Southern District (mostly in Elat and along the Dead Sea shore). The rest of the rooms are distributed almost equally (approximately 22%) among the Haifa and Northern Districts, the Tel Aviv and Central Districts, and the Jerusalem District. By comparison, 79% of the rural tourism rooms are in the Haifa and Northern Districts.
Until 1996, the largest number of rooms was in Jerusalem; since 1997 - in Elat.
The number of person-nights in tourist hotels in 2006 was similar to that of 2005 – 19 million (which comprises 81% of person-nights in all accommodation units). The number of person-nights in the first half of 2006 was 13% higher than in the first half of 2005. However, in the wake of the Second Lebanon War, in the second half of 2006 there was a sharp drop in the number of tourist person-nights, and as a result the number of person-nights in this half was 8% lower than the number of person-nights in the second half of 2005.
64% of all person-nights in tourist hotels (12.3 million) were spent by Israelis, and the rest (6.8 million) by tourists, similar to the distribution in 2005.
In 1990-2006 there were fluctuations in the number of tourist person-nights. Their number was doubled from an average of approximately 5 million in 1990-1991 to nearly 10 million in 2000, but after terrorist attacks their number dropped sharply to an average of nearly 3 million in 2001-2003. In 2004 and 2005 the number of tourist person-nights increased compared to the previous year, but in 2006, following the Second Lebanon War, the number of tourist person-nights was similar to 2005. On the other hand the number of Israeli person-nights increased steadily from the 1990’s to 2002, and from then on has remained at the same level.
The number of person-nights of tourists from Europe in 2006 (3.2 million) was 40% less than in 2000; while the number of person-nights of tourists from America in 2006 was similar to that in 2000 (2.5 million).
Close to one-half (47%) of all Israeli person-nights in 2006 were in Elat. Slightly more than half of all tourist person-nights were in Jerusalem and Tel Aviv-Yafo (34% and 23%, respectively).
Tourist person-nights comprised over 73% of all person-nights in Jerusalem and Tel Aviv-Yafo, 50% in Netanya, 23% in Tiberias, 14% on the Dead Sea shore and 11% in Elat.
Rural tourism is mainly located in the northern part of Israel (close to the border with Lebanon) and was therefore affected most strongly by the Second Lebanon War – the number of person-nights decreased by 6% in 2006, compared to 2005, and that in spite of the 10% increase in the first half of 2006.
In 2005-2006, the rate of room occupancy in hotels was approximately 58% - higher than in 2004 (51%) and in 2001-2003 (45% on average).
In 2006, room occupancy ranged from 44% in the Northern District to 66% in the Southern District. Compared to 2005 occupancy was lower in the Northern and Haifa Districts, most probably because of the Second Lebanon War.
In the northern cities of Haifa and Tiberias room occupancy in 2006, following the Second Lebanon War, decreased by 2%-3% compared to 2005, while in cities located in the central and southern areas there was an increase. Many Israelis left their homes during the war, and stayed in hotels in the central and southern areas of the country. Along the Dead Sea shore and in Elat, where the percent of Israeli person-nights in hotels is usually high, room occupancy reached 71% and 68%, respectively.
REVENUE1 AND EMPLOYMENT
In 2006 hotel revenues amounted to NIS 6.5 billion – a rise of 7%, compared to 2005. In the first half of 2006 the revenue increased by 21% compared with the first half of 2005, but in the second half, following the Second Lebanon War, the revenue was less than in the second half of 2005.
The total 2006 revenue almost reached the 2000 peak (NIS 6.6 billion). The revenue from Israelis2 was 15% higher than in 2000, and the revenue from tourists was lower by 20%.
The share of revenue received from tourists, out of total revenue, increased from 26% in 2001- 2004 to 37% in 2005-2006, but was lower than in 2000 (45%).
Revenue per tourist person-night was $78.
Revenue per room was $33,000 – 9% more than in 2005.
Approximately 39% of the revenue of tourist hotels was received from hotels in Elat and along the Dead Sea shore, and approximately 35% from hotels in Jerusalem and Tel Aviv-Yafo.
In 2006, revenue from rural tourism was approximately NIS 330 million. The average price for a person-night was NIS 162. In kibbuzim and collective moshavim the average price was lower – NIS 143; and in private rural accommodation the price was approximately NIS 207.
In 2006, approximately 25,000 thousand people were employed at hotels (excluding workers of employment agencies) – a 5% increase compared with 2005, but a 17% decline compared with 2000 (following the tourism crisis, hotel workers were laid off).
INCOME, EXPENDITURE AND PROFIT1
In 2006, the profit of tourist hotels (surplus of income over expenditure) amounted to more than NIS 650 million – approximately 12% of the income.
The income of tourist hotels is obtained from rental of rooms (approximately 50%), from food services for hotel guests and outside clients (approximately 40%), and from other sources such as operation of stores and clubs, and organization of events and conferences (approximately 10%).
Expenditures consist of labour costs (40%-45%), purchase of food (12%-16%), and other components such as operating and management costs, taxes, rental, and advertising.
Food purchases constitute on average 35% of the income from food, with a rate ranging from approximately 30% in high-level hotels to approximately 50% in popular hotels.
Of total expenditures, those on taxes, fees and insurance comprise approximately 6% (regardless of the level of the hotel); on publicity and sales promotion, approximately 3%; on culture and entertainment teams, approximately 1.5%; on management, approximately 1.5% (between 1.7% in high-level hotels and 0.8% in popular hotels).
In 1991-2000, there was a steady increase in the revenue of hotels, which was accompanied by a concomitant increase in expenditures. During that period, hotel profits ranged from 10% to 19% of income.
During periods of crisis in tourism, hotel income declines more rapidly than expenditures. When a crisis begins, reservations are cancelled but expenditures – particularly labour costs – do not shrink immediately. In 2001, hotel income dropped by one-fourth, but expenditures by only 18%. In 2002, income and expenditures dropped at a similar rate (11%). The percentage of profit out of total income dropped from 12% in 2000 to close to 4% in 2002. In the years 2003-2006 income and expenditures grew and the increase in income was faster than the increase in expenditures - a phenomenon which characterizes recovery.
1 In 2006 prices.
2 Revenue from Israelis includes also revenue from different hotel activities, such as events and
1 The last survey was carried out for 2004. For 2005-2006, estimates were calculated.