Israel tourism crisis deepens as hotel occupancy drops to 44%
The industry hoped for recovery after the 2024 low point, but renewed conflict with Iran and flight disruptions have delayed the return of international visitors.
Following the second round of war with Iran in March, known as Operation Roaring Lion, and the subsequent suspension of flights to Israel and collapse in tourist arrivals, inbound tourism in the first half of 2026 is shaping up as another lost period for the industry.
According to a report on hotel overnight stays and occupancy published Tuesday by the Israel Hotel Association, tourist overnight stays in Israeli hotels declined by about 5% in the first half of 2026 compared with the first half of 2025, which was itself affected by the war and Operation Rising Lion in June.
The report found that foreign tourist overnight stays in Israeli hotels totaled just 1.29 million between January and June 2026, compared with approximately 1.35 million in the first half of 2025. While the figure represents an improvement from 2024, the lowest point for Israeli tourism during the Swords of Iron War, when only 971,000 tourist overnight stays were recorded, it remains dramatically below prewar levels.
Compared with the first half of 2023, before the October 7 massacre and the outbreak of the war, inbound tourism has effectively collapsed. Tourist overnight stays in hotels during the first half of 2026 were down 75% from the same period in 2023, when foreign visitors accounted for approximately 5 million overnight stays.
Domestic tourism also weakened, with Israeli overnight stays in hotels declining by about 9% in the first half of 2026 compared with the same period in 2025, reaching approximately 7.2 million. However, compared with the first half of 2023, domestic overnight stays increased by about 6%, reflecting a shift among Israelis toward vacations inside the country amid flight disruptions and continued security concerns.
The record year for Israeli hotel overnight stays was 2024, when domestic overnight stays reached 10.3 million, but largely due to exceptional circumstances. According to the association, approximately 49% of those stays were by residents evacuated from border communities during the war.
A regional breakdown shows that Herzliya recorded the highest hotel occupancy rate in the first half of 2026 and was the only city where occupancy improved compared with the first half of 2025. The Hotel Association said that occupancy declined across all other regions compared with both 2025 and 2024.
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The national average hotel occupancy rate in January-June 2026 stood at 44%, compared with 50% in the first half of 2025, 62% in 2024, and 63% in 2023.
Herzliya recorded the highest occupancy rate at 70%, followed by Eilat at 66% and the Dead Sea at 48%.
Below the national average were Netanya with 43% occupancy, Tel Aviv with 40%, Haifa with 38%, Jerusalem with 31%, Tiberias with 29%, and Nazareth with just 19%.
The Hotel Association said that foreign tourism has "almost completely disappeared since October 7 and has failed to recover," creating significant pressure on hotels, particularly those that traditionally rely on international visitors.
The association added that domestic tourism by Israelis has not been sufficient to offset the disappearance of foreign visitors and called for government assistance to help the industry survive what it described as an unprecedented crisis.
