GOOD RETURN ON MARKETING INVESTMENT BY THE TOURISM MINISTRY AFTER OPERATION PILLAR OF DEFENSE: NIS 33 MILLION CAMPAIGN INVESTED IN ISRAEL AND OVERSEAS FOR A RETUNR OF NIS 400 MILLION FROM INCOMING TOURISM AND NIS 150 MILLION FOR DOMESTIC TOURISM
TOURISM MINISTER DR. UZI LANDAU: “Once again, the numbers prove the great value of the tourism industry; this is a direct and positive relationship: about NIS 15 of income for every shekel spent on marketing. A significant amount goes directly to the periphery and helps provide and maintain employment. The marketing activities of the ministry should be increased with the different target markets”.
There has been a swift and consistent recovery in incoming and domestic tourism thanks to the increased marketing investment made by the Tourism Ministry following Operation Pillar of Defense. The ministry allocated NIS 33 million shekel (of which NIS 22 million came from the Finance Ministry) for intensive marketing and advertising activities in order to quickly come out of the tourism crisis caused by the effects of Operation Pillar of Defense. NIS 28 million was allocated to incoming tourism and NIS 5 million to domestic tourism.
The effects on domestic tourism: Advertising, combined with special offers in hotels, generated an additional 300,000 bed-nights in hotels, contributing an additional NIS 150 million to the economy and an all-time record in bed-nights in hotels in Israel.
In order to strengthen domestic tourism, the ministry launched a NIS 5 million campaign during December-January jointly with the hotels offering special deals to Israelis. This led to an increase in bed-nights in December-January of 8%, as opposed to a decrease of 18% in tourist nights during the same period. The largest increase for domestic tourism was registered in March 2013 – 42% as compared to the same period last year, 50% more than 2011 and 27% more than in 2010 (similar period in terms of holidays). During this same period, there was a decrease of 8% for tourist nights as compared to 2012.
Comparing 2013 to 2010: The NIS 5 million investment in domestic tourism led to an increase of 300,000 Israeli bed-nights – an all-time record in hotels. This can be valued at about NIS 150 million in revenue, of which NIS 100 million goes to the hotel industry.
The effects on incoming tourism; as a result of the investment, there was an increase of at least 70,000 in incoming tourism and the economy grew to date by at least NIS 400 million.
The ministry’s ongoing overseas marketing budget was increased in Russia, Germany and the States as compared to last year. According to data for March-April 2013, when the Easter/Passover holidays took placel, incoming tourism increased by 1% vs 2012 – a new all-time record for these months. The ministry believes that the increased marketing activity helped the industry come out of the crisis caused by Operation Pillar of Defense within four months, benefiting employment and the economy.
Tourism from Russia, for example,(the second largest source country for incoming tourism) is very susceptible to changes in campaign levels and Russian tourists are very flexible in their vacation decisions. As a result of the campaign in Russia during March and April, incoming tourism grew by 16% as compared to the same period last year.
According to ministry statistics, it would appear that incoming tourism grew, as a result of the increased investment, by at least 70,000, with revenue to the economy benefiting by at least NIS 400 million. This would mean that, according to ministry estimates, the financial benefit to the economy is likely to grow further, as the speed of response in markets such as the States and Germany is slower than in Russia.
In a letter sent recently by outgoing Tourism Ministry D-G Noaz Bar-Nir to Yonni Regev, deputy head of the budget department in the Finance Ministry, Bar-Nir wrote: “The missiles that hit Rishon leZion and Tel Aviv during Operation Pillar of Defense and the alarms that were heard in Jerusalem and Tel Aviv received international media coverage, leading to cancellations and a slow-down in future tourist reservations. In the second half of November, immediately after Operation Pillar of Defense, incoming tourism fell by 25%.” Bar-Nir also compared the time taken to come out of that crisis with Cast Lead in 2009: “It took 9 months to come out of the Cast Lead crisis, when there was no budget allocation (this was also the time of the global economic crisis, but there were no hits in the Jerusalem or Tel Aviv area)- as opposed to 4 months this time! The economy grew by at least NIS 400 million.” He continued that the single biggest damage to incoming tourism happened in Eilat where charter flights were canceled. As a result, Eilat received a larger allocation of budget to encourage domestic tourism, thereby minimizing the damage to almost nothing as a result of the large number of reservations made by Israelis.