Hoteliers in the bank: the high value of the shekel against the dollar also hurts us
The dollar continues to struggle against the shekel, with Israel’s currency remaining stronger than it has been in years – and that’s bad for tourism, according to the Union of Hoteliers of Israel. In a letter to Karnit Flug, president of the Bank of Israel, the hoteliers urged her to do something about the shekel’s high value, before their business goes bankrupt. According to Amir Hayek, president of the Union, the high dollar has cost hoteliers 300 million NS, and they can no longer compete with alternative destinations without raising their prices in dollars and euros.
But they can’t do it; because if they do, he said, tour groups who have chosen Israel in recent years will choose other cheaper destinations. While a strong shekel is generally seen as a problem for exporters, who cannot raise prices abroad beyond what their competitors do – even if they have to pay their bills in Israel in shekels, that they receive less because of their overseas pricing constraints – the same situation applies to the Israeli tourism industry, Hayek said.
Hotel prices in Israel are already considered high by international standards, but when visitors pay in foreign currency – especially tourist groups, with whom hotels have to negotiate special deals – hotels receive less when that money is converted into shekels, which they must pay. salaries and invoices.
“The hospitality industry employs 40,000 people directly and 150,000 indirectly,” Hayek wrote to Flug on behalf of the hoteliers. “40% of our income comes from overseas on average, while in places like Yerushalayim and Tel Aviv the figure could reach 70%. “The fall in the dollar / shekel exchange rate” is a plague for us, we find ourselves in a storm, with declining income. We cannot continue to absorb losses of this type, and unfortunately there does not appear to be any change on the horizon on the exchange rate, ”he added.
The economists cited by The felt said the dollar is likely to strengthen against European and Asian currencies in the near term, as the United States raises interest rates. However, that doesn’t necessarily mean the shekel will weaken. According to economists, the strength of the shekel is due to three factors: The increased supply of foreign currency due to increased sales of natural gas, the outflows of high-tech companies that bring in foreign currency, and the significant growth of the Israeli economy. .