Israeli Outbound Travel Surges While Domestic Hotel Industry Sentiment Remains Negative

Recent data from Israel's Central Bureau of Statistics highlights a strong rebound in outbound travel by Israelis alongside ongoing challenges in the domestic hotel sector. In July 2024, approximately 1.3 million Israelis left the country, with 1.15 million traveling by air, marking the highest monthly figure since the outbreak of the war. This compares to about 1.1 million departures in July 2023, the second-strongest post-war number. Experts attribute this surge to pent-up demand for international vacations and the strengthening Israeli shekel.

Conversely, a business trends survey reveals a more complex picture for Israel's hotel industry. The net balance score, reflecting managers’ positive versus negative assessments of their companies’ current economic state, stands at -18% in July, an improvement from -46% in March but still negative overall. While the net balance of Israeli guest overnight stays turned positive for the first time since November 2023, other key indicators remain down, including tourist overnight stays (-42.9%), employment (-2.2%), and company revenues (-6.4%).

The return of major foreign airlines such as Swiss, Condor, Brussels Airlines, and soon KLM, Delta, and United, is expected to further boost outbound travel options and potentially influence airfare prices. Despite the strong outbound travel figures, total Israeli departures from January to July 2024 (4.67 million) are slightly below the same period last year (4.88 million), reflecting the impact of ongoing regional conflict. Harel Insurance economist Ofer Klein noted the disparity between rapid recovery in outbound travel and the slow rebound in inbound tourism remains a defining feature of the sector’s current state.