Tourism is a sensitive industry that’s vulnerable to existing economic and political conditions. The same is true for the hospitality industry. At Le Cordon Bleu Australia, we are training our students to enter the services economy and contribute to industries like tourism and hospitality. As such, they need to develop an acute awareness of external environmental factors that affect such industries, writes lecturer Dr Al Marshall.
Given the substantial costs of political conflicts, economists have often seeked to measure the impact of violent conflicts in history such the American Civil War, World War 1, and World War 2. Tourism will usually go into rapid decline when there is such conflict.
Since 1967, Israel has been involved in a number of wars and large-scale military operations including the Six-Day War, the Yom Kippur War, the First Intifada, the Second Intifada, and now the 2023 Israel–Hamas war. In fact hostilities and acts of violence between the Palestinians and Israelis have, intermittently, discouraged tourists for the past 40 years. After the Second Intifada, Israel lost approximately one third of its tourists.
Positively, Israel is used to periods of conflict and its economy has learned to recover quickly. The tourism industry is particularly vulnerable. Tourist Israel, one of the country's largest tourism organisations, says the industry is accustomed to bouncing back. Israel only reopened for touristsin January 2022.That year, it recorded almost 2.7million tourists (about 41% lower than the more than the 4.5 million visitors in 2019. However until the events of October 7, tourism numbers for 2023 were trending closer to pre-pandemic levels in 2023.
Since the start of the current Israel-Hamas conflict, thousands of tourists have departed Israel, foreshadowing a big slowdown for the country's tourism industry. Departure of the tourists is a big blow to Israel's tourism industry, just as it was recovering from the Covid pandemic.
The Israeli war on Gaza has also had a moderate impact on tourism to Egypt, particularly in South Sinai, which accounts for 32% of Egypt’s total tourism bookings. In fact, “Since the beginning of the conflict, more than half of trips to South Sinai have been cancelled” according to the Egyptian Association for Tourism and Friendship among Nations. International tourism is a big source of foreign revenue for Egypt.
In Jordan and Lebanon, too, there have been negative impacts on the tourism industry, where the high season runs from October to late May, and where tourism is also a major foreign currency earner. None of these other three countries are in an economically strong position. Lebanon is suffering from financial collapse that started four years ago. Egypt has a foreign exchange crisis and high inflation, while Jordan’s economy has been at a standstill for the past decade or so.
Since the start of the current Israel-Hamas conflict, thousands of tourists have departed Israel, foreshadowing a big slowdown for the country's tourism industry. Departure of the tourists is a big blow to Israel's tourism industry, just as it was recovering from the Covid pandemic.
Turning to specific players in the tourism industry, impacts have been felt by airlines, cruise ship lines, tour companies, hotels and restaurants. Major global airlines like United and American Airlines have changed schedules – most typically cancelling flights in and out of Israel. Some airlines have also suspended services to Lebanon while the national carrier, Middle East Airlines, has cut flightsby more than half. Discount carriers like Easyjet have cancelled packages into Israel, while others have let tourists rebook dates sometime in the future, or get a refund.
Cruise ship line companies have also cancelled their ports of call in Israel, either shortening their schedules or calling at other ports in the eastern Mediterranean instead. Those who had based some of their capacity in home ports like Haifa in northern Israel (such as Royal Caribbean) have now chosen home ports in other countries. With land-based tours, tour operators have been forced to cancel because of the security situation in Israel and in the West Bank, or because tourists themselves have cancelled or postponed their travel to the country.
In terms of accommodation, some hotels in Israel have been forced to shut, including some InterContinental Hotels, and Isrotel – one of Israel's major chains. This is due to two factors – the collapse in bookings, and hotel staff being called up to serve in the Israeli military. The latter has also affected other parts of the hospitality industry, with restaurants being forced to close due to their staff being mobilised. There is less to see in the country too now with historical sites closed, along with national parks and reserves.
The tourism situation in Israel is looking grim right now, though Israeli tourism planners and investors would no doubt point to the extended cycle of past conflicts in the region, and the industry’s record of always having bounced back from these conflicts, as reason for optimism about the medium term (if not the short term) future.
