On a recent afternoon in the Old City of Jerusa-lem, while fighting raged in Gaza, Bilal Abu Khalaf hosted a group of Israeli tourists at his textile store in the Christian Quarter?one of Jerusa-lem?s tourist gems.
Dressed in a striped galabiyya and tasselled red tarbouche, Khalaf showed his visitors exotic hand-loomed silks and golden-threaded garments from Syria, Morocco and Kashmir that adorn Israel?s most luxurious hotels and ambassadors? homes. The Israelis were entranced, but they didn?t buy anything.
?That?s the first group I?ve had here in more than a month,? Khalaf said. ?There have been whole weeks when no one has been inside the shop. I?ve sold almost nothing the entire summer. Business hasn?t been this bad since the first intifada in 1989, when the Palestinian groups ordered us to shutter our stores.?
Nearby, the vast Church of the Holy Sepulcher marking the site where many Christians believe that Jesus was buried, usually packed with pilgrims, was echoing and empty.
?It?s been catastrophic, horrific,? says Mark Feldman, chief executive of the Jerusalem-based Ziontours, who estimates he lost 20% of his annual business. ?We lost 95% of our incoming tourism. Every single family-oriented group cancelled. For the last month, there have been no forward bookings and no inquiries for December or the Jewish festivals. Our hope is that the truce will hold and people will start considering coming to Israel in 2015; 2014 is gone.?
By early September, a few tourists had returned to the empty alleyways. Josef Gurian, a physician from Washington, DC, says he had decided to skip his sister?s wedding in Israel, then rebooked after a ceasefire on August 26 ended 50 days of conflict.
?If the ceasefire hadn?t been announced, I would not have come,? Gurian says. ?I?m the breadwinner for a household of six, and I didn?t feel that any increase in my risk was worth the price.?
His mother, Elaine, a museum consultant and former deputy director of the Holocaust Memorial Museum in Washington, arrived during the fighting. ?I was coming anyway,? she says. ?Two weeks ago, I was in Ukraine for work. I was more worried there than here.?
This year should have been a record year for Israeli tourism. In 2013, Israel attracted 3.6 million foreign visitors. Numbers from January to June showed a 15% increase. Then the war began in July, and the number of visitors slumped. In July and August, the number of tourists fell to 4,00,000, down from 578,000 in the same period last year, a 31% decline; 90% of cruise ship visitors cancelled.
United States flights to Israel were banned for 24 hours after a rocket landed near Ben-Gurion airport. There was little damage and few casualties, but those who came found themselves running for shelter as air-raid sirens wailed in Tel Aviv.
The Israel Hotels Association says occupancy rates, usually 80% in July, fell below 40%. Top hotels offered deep discounts. The new Ritz-Carlton in Herzliya slashed its room rate to $400 from $575. In Jerusalem, Hilton?s new Waldorf-Astoria offered a 10% discount online and a 20% discount for inquiries by phone.
Dan Hotels, which owns the King David in Jerusalem, warned shareholders in August that third-quarter revenue was liable to fall by 30% because of war-related cancellations.
?We lost close to 50% of our business from July to the end of the year. All we are looking at is how to recover and how to promote 2015,? says Shmuel Maron, chairman of the Israel Incoming Tour Operators Association, which represents businesses handling groups from abroad.
In east Jerusalem, many hotels were almost empty from mid-July to late August. The American Colony, a favoured haunt of diplomats and foreign correspondents, found itself hosting a replacement roster of war-related guests.
?The American Colony also suffered cancellations like other hotels, but was fortunate that some of the lost reservations were replaced by an influx of foreign journalists,? says Jeremy Berkovits, a senior executive at the Colony.
Tourism contributes 2% directly to Israel?s gross domestic product and a further 5% indirectly?a total of some $11.6 billion in 2013?and is the country?s largest source of foreign currency. The tourism ministry estimates industry losses from the war at 2.1 billion shekels (about $597 million). The government has yet to approve a compensation fund to assist tourism businesses that lost revenue because of the war.
Government ministers are more optimistic than industry executives. The minister of tourism, Uzi Landau, says a government campaign to boost domestic tourism had compensated for foreign cancellations.
?This last weekend, it was impossible to find a vacancy in the hotels around the country,? Landau says. ?We are refocusing our efforts on major countries of origin, so we can maintain those that already made reservations. We wish to boost up again and put the entire Israeli tourism industry back on track in a few months.?
Israel?s minister of finance, Yair Lapid, says he would make a final assessment of the economic damage caused by the war in October after the Jewish High Holy Days.
?You have to remember that in Israel the high tourism season is October and May, not July-August, so we still have hopes about a quick rebound in tourism,? Lapid says. ?But we?re not going to sit around and wait for this. We?re going to be proactive in helping Israeli tourism. We need a few weeks… and then we?ll be able to understand more the impact and the swiftness of the rebound.?
Other sectors also suffered. International soccer and tennis matches were called off. The music industry was
battered after concerts were cancelled by Neil Young, America, CeeLo Green, Lana Del Rey, Megadeth and the Backstreet Boys.
?I had a lot of cancellations, which wreaked havoc in the entire business,? says Hillel Wachs, a concert promoter at 2b Vibes Music. ?Everybody decided it was not safe to play in Israel. Everybody?s licking their wounds right now and hoping for better times, which will happen.?
Thousands of wedding and bar mitzvah guests pulled out, including close relatives of brides and grooms.
?The last eight weeks we?ve probably lost about 30% of our work, about 100% of the guests that were coming from abroad,? says Paul Assenheim, a top Israeli caterer. ?Eight of the 30 events we had for July and August were cancelled. I?m now looking at events in October, and people are saying they?re not quite sure if they?re going to come.?
Karen Tsafrir, whose company, Live Production, plans celebrations and company parties, says next year?s business is already suffering.
?The first to cancel were a couple whose son?s bar mitzvah is in August 2015. They said they couldn?t bear the thought of a year filled with worrying about what would happen if things are like this,? she says. ?They have friends and family who were supposed to come this summer who cancelled their holidays and lost money on flights and hotels. They couldn?t bear to put their family through that.?
Matthew Kalman