Israeli tourism sector crumbles as war on Gaza rages

By Al Mayadeen English
Source: Israeli media
2 Jan 2024 17:23
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The Israeli Phoenix Gamma index shows that the tourism and food and beverages sectors have seen great losses, year-on-year, as a result of the Israeli war on Gaza.

A picture shows a completely empty beach near the occupation's coastal city of "Tel Aviv", occupied Palestine, on October 12, 2023. (AFP)

The Israeli tourism sector has received a huge blow due to the Resistance's response to the occupation's crimes since October 7, the Israeli Phoenix Gamma index showed.

Analyzing the shopping cycle, transaction numbers, and weekly average purchase amounts, the latest figures for the last quarter of 2023 paint a grim picture for one of the Israeli occupation's vital sectors.

The tourism sector witnessed a staggering 73% decrease in turnover compared to the end of 2022. Transactions plummeted by 64%, accompanied by a 26% drop in the average transaction amount.

Restaurants, cafes, and fast-food establishments faced a 16% dip in turnover, with transactions dropping by 1.5% year-on-year. The initial two weeks of the war on Gaza saw near-zero activity, which may be linked to large barrages of rockets launched from the Gaza Strip toward occupation cities on a daily basis. Due to such circumstances, Israeli settlers opted to remain indoors resulting in a nearly 40% decrease in turnovers and transactions for restaurants.

The study found that despite businesses adapting to "a war routine" and the public returning to shopping, a large number of businesses remain closed in northern and southern occupied territories.

Israeli economy hit hard

The slump experienced by the tourism sector is a reflection of a larger-scale downturn in the Israeli economy. On Monday, the "Bank of Israel" cut short-term borrowing rates for the first time in almost four years, in response to statistics suggesting a weaker economy and reduced inflation as a result of the war on Gaza.

The Central Bank cut its benchmark rate (ILINR=ECI) by a quarter point, lowering it from 4.75% to 4.50%.

According to a statement by the central bank, "The war is having significant economic consequences, both on real economic activity and on the financial markets," explaining that "uncertainty" regarding the expected duration of the war, as well as its severity, are affecting the extent of the impact on activity.

An analysis by The Washington Post on Sunday revealed that the war on Gaza is imposing a staggering daily cost of $220 million on "Israel", totaling nearly $18 billion thus far. According to the financial newspaper Calcalist, if the war persists for an additional five to ten months, the potential cost to "Israel" could soar to $50 billion, equivalent to 10% of the regime's GDP.