Israeli Hotels Lose One Million Overnight Stays in 2026

Israeli Hotels in 2026

According to Israel’s Central Bureau of Statistics (CBS), the country’s tourist hotels recorded 13.1 million overnight stays between January and August 2026, compared with 14.1 million during the same period in 2025. This represents a decline of approximately 7%. Average room occupancy fell from 53% to 50%. The main reason was weaker demand from Israeli residents, who account for the majority of the country’s hotel market.

Israeli residents accounted for 11.2 million overnight stays, one million fewer than a year earlier. Their share of total overnight stays declined from 87% to 85%. International tourists, however, generated a modest increase, with their overnight stays rising from 1.9 million to 2 million and their share reaching 15%. The contraction in Israel’s hotel market during the first eight months of 2026 was therefore driven primarily by domestic tourism.

Security conditions have significantly affected the industry’s performance in recent years. Following the outbreak of war in October 2023, some hotels temporarily closed, while others were used to accommodate evacuated residents. Further military operations in June 2025 and February 2026 disrupted tourism activity again. In March 2026, average hotel occupancy nationwide dropped to approximately 27%. The rate was just 5% in Tiberias and 15% in Jerusalem.

Israeli Hotel Revenue Falls by 11.5%

The industry’s financial performance also deteriorated. In the first half of 2026, Israeli hotel revenue amounted to 5.4 billion Israeli shekels ($1.75 billion), compared with ILS 6.1 billion ($1.98 billion) during the same period in 2025. Revenue declined by 11.5%, or ILS 700 million ($227 million). Domestic guests generated 83% of total revenue, while international visitors accounted for just 17%. A year earlier, the respective shares were 84% and 16%.

Seasonally adjusted figures reveal significant differences between the two quarters. In April–June, average monthly revenue from international tourists fell by 28% compared with January–March. Revenue from domestic guests, meanwhile, increased by 26%. This pattern reflects the impact of restrictions imposed in the spring and the subsequent recovery in domestic demand.

The decline in hotel activity was accompanied by a reduction in employment. The average monthly number of jobs, including staff employed through recruitment agencies, decreased from 41,000 in the first half of 2025 to 38,000 in 2026. The industry therefore lost approximately 3,000 jobs, representing a decline of more than 7%.

Hotel Occupancy Rates Across Israel

Significant differences remain between tourist destinations. The Southern District recorded the highest average occupancy rate in January–August, reaching 65.3%. However, this was still below the 68% recorded a year earlier. The region benefits from strong demand for resort holidays, particularly in Eilat and along the Dead Sea.

In the Tel Aviv District, occupancy stood at 49.9%, compared with 51.7% during the same period in 2025. The Central District recorded a decline from 59.1% to 49.6%, while the Haifa District saw its rate fall from 51% to 48%. The Northern District experienced the weakest performance, with occupancy dropping from 42.3% to 36.2%. In the Jerusalem District, the rate reached 36.4%, compared with 37.6% a year earlier.

Regional statistics indicate that southern resorts continue to enjoy more resilient demand than northern destinations and Jerusalem. The gap between the districts with the highest and lowest occupancy rates is almost 30 percentage points. This creates substantially different operating conditions for hotel businesses within the same country.

Summer Season Improves Hotel Performance

In August 2026, Israeli hotels recorded approximately 2.5 million overnight stays, including 2.2 million by domestic guests and 293,000 by international visitors. Average room occupancy increased to 69%, compared with 67% a year earlier. Summer occupancy was significantly higher than the January–August average, although the total number of overnight stays since the beginning of the year remained below the 2025 level.

Eilat led individual tourist destinations, with hotel occupancy reaching 90% in August. Haifa and Tiberias recorded rates of approximately 72%, while Tel Aviv reached 68%. Jerusalem ranked at the bottom of the list with 51%. Strong occupancy at resort destinations indicates sustained demand for summer holidays, despite the overall contraction of the market during the first eight months of the year.

Haifa deserves particular attention, as its hotel market improved for three consecutive months. In June, occupancy rose to 43.7% from 28.9% a year earlier. In July, the rate increased to 54.8% from 44.4%, while August saw occupancy reach 72.1%, compared with 64.5% in 2025. According to The Jerusalem Post, the number of overnight stays in the city’s hotels increased by approximately 15% in August.

Outlook for Israel’s Hotel Market

As of the end of June 2026, Israel had 443 operating tourist hotels with 51,000 rooms. Another 77 hotels were temporarily closed. A year earlier, 441 hotels were operating. The number of active properties therefore remained virtually unchanged despite weaker demand. Average room occupancy in the first half of 2026 stood at 44%.

The recovery of Israel’s hotel industry largely depends on an increase in inbound tourism. According to the Israel Hotel Association, international guests accounted for approximately 1.29 million overnight stays in the first half of 2026, down 5% from the same period in 2025 and 75% below the pre-war level recorded in 2023. Domestic demand also weakened, with Israeli residents spending approximately 7.2 million nights in hotels, 9% fewer than a year earlier.

Conditions have been particularly difficult in cities that depend heavily on international visitors. In the first half of 2026, hotel occupancy stood at approximately 20% in Nazareth, 29% in Tiberias and 31% in Jerusalem. The Israel Hotel Association warns that domestic tourism remains insufficient to compensate for the shortage of international visitors and has called on the government to provide additional support to the industry.

Analysts at International Investment note that Israel’s hotel market is experiencing uneven performance. The summer season brought higher occupancy rates, particularly in Eilat and Haifa, but total overnight stays declined during the first eight months of the year, while financial results deteriorated in the first half. Domestic guests continue to generate the majority of hotel revenue. A recovery in international tourism remains one of the key conditions for the industry’s future growth.