Israel Tourism Paradox: Visitor Numbers Plummet While Card Spending Holds Steady

Despite a dramatic drop in tourist arrivals, spending via foreign bank cards in Israel has nearly recovered to pre-war levels, creating a puzzling economic paradox. In the first half of 2026, foreign card transactions totaled 9.7 billion shekels, a mere 7.8% decrease from the same period in 2023, when spending reached approximately 10.5 billion shekels. This data comes from SHVA, the national payment system operator, and was reported on Tuesday, September 29.

In stark contrast, the number of tourists entering Israel has plummeted. According to the Ministry of Tourism, only about 430,000 tourists visited in the first six months of 2026, a staggering 78% decline from the 1.97 million recorded in the first half of 2023.

The true state of the tourism industry is better reflected in where these foreign card payments are being made. Spending on hotels and guest rooms has fallen by 43.9%, restaurants and cafes by 36.5%, and duty-free shops by 52.8%. In five key tourism sectors, including car rentals and travel agencies, expenditures dropped over 40% to 2.62 billion shekels from about 4.3 billion three years prior.

Several factors may explain the discrepancy. Online purchases using foreign cards have increased by about 1%, while in-person spending has decreased by approximately 18%. SHVA suggests that some online payments might be from Jewish organizations abroad purchasing equipment for affected communities in Israel, which are counted as foreign card expenses even without a visit. Additionally, spending by non-tourist residents using foreign cards could be inflating the figures, as indicated by a 52.4% rise in spending at delicatessens, butcher shops, and bakeries. This could also include purchases by organizations for local communities.

Immigrants continuing to use foreign cards for daily expenses and settling in could also contribute. While overall immigration has decreased, driven by fewer arrivals from Russia and Ukraine, immigration from France, the UK, and the US remains stable or is growing. Other potential contributors include spending by diplomats, journalists, and international humanitarian workers. Furthermore, inflation approaching 10% during this period means that similar spending amounts represent a smaller volume of actual purchases.