Anyone said Corona?

The blue-and-white vacationers painted Isrotel green

The reports of the largest hotel chains in Israel show that the Israeli tourist compensated their share for the lack of inbound tourism in the days of the Corona.

When it comes to Isrotel, it has beaten forecasts and even the data for 2019. The test now: to preserve domestic tourism in the post-Corona era

Roast Greenberg

01/04/2022

Friday, 01 April 2022, 08:09 Updated: 08:39

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The Israeli thirst for vacation, along with the corona restrictions imposed on tourists around the world, have led Israelis to a blue-and-white vacation and returned profitability to the major Israeli hotel chains.

Data from the Israel Hotels Association show that in 2021 there will be an increase of about 110% in the number of Israeli person-nights in Israeli hotels, which stood at about 15 million person-nights.

Most of the increase is due to substantial restrictions on entry and exit from Israel, and the abolition of some of the corona restrictions as early as February 2021.

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The largest hotel chains in Israel in numbers (Photo: Walla !, no)

Bypassed 2019 performance

The Isrotel hotel chain was the main beneficiary of the above increase, and even ended 2021 with record revenues of about NIS 1.6 billion. These even surpassed its pre-Corona revenues, which stood at about NIS 1.4 billion in 2019 - the year that was considered a record year Isrotel

's profitability also increased, partly due to the streamlining required of the corona time along with a decrease in wage costs due to the lack of available workers, and the chain became profitable in Israel

. % Compared to the net profit presented by the pre-corona, in 2019, which was about NIS 143.1 million, after in the previous year, the corona 2020, it showed a net loss of about NIS 24.5 million.

The hotel chain notes that 98% of its revenues came from domestic tourism, and only about 2% as a result of foreign tourism, compared to about 78% and 22%, respectively, in 2019. This is also one of the reasons why Isrotel managed to beat other hotel chains in Israel (see Chart).

The mix of the chain's hotel location and character, along with its ability to market them to the Israeli public more efficiently than its competitors, have made it the hotel chain with the best financial results among the three major chains.

The mix includes the chain's 10 hotels in the Eilat (8) and Dead Sea areas (2), which are the favorite holiday destinations for Israeli families, along with 6 luxury hotels that were established and marketed as a 'refuge' for vacationers without the hustle and bustle that accompanies vacations with children.

It should also be noted that the chain began marketing its rooms for the benefit of vacationers even before the end of the first corona closure experienced by Israel, ahead of all its competitors.

Lior Raviv, CEO of the Isrotel chain, record performance against the background of a complex period (Photo: Ariel Beshor)

"Workers still missing"

Lior Raviv, CEO of Isrotel,

told Walla! Silver, that "the hotels in Eilat and the Dead Sea were among the first to open after the first Corona closure and continued the trend of hosting with Israel, which also came to rest in 2021.

Demand also increased for our luxury hotels. , Such as the Orient Hotel in Jerusalem, which also hosted the extensive domestic tourism created in 2021.

The streamlining measures that Isrotel took following the Corona plague contributed to the high profitability, but this was achieved mainly due to the increase in the chain's activity, along with its character.

We are still short of employees, and in this context it is important for me to point out the existing chain employees, who have fully supported everything required to operate the hotels, and are an integral part of the chain's success. "

Isrotel's Genesis Hotel in Mitzpe Ramon.

The distribution of the hotels and their character helped the chain to address almost every need of the Israeli holiday (Photo: Isrotel)

Isrotel, which manages about 4.6 thousand hotel rooms in Israel, is traded on the Tel Aviv Stock Exchange worth about NIS 5.9 billion, after soaring about 236% about two years after its share price fell a few days after the announcement of the corona closure in Israel on March 15, 2020

. Because the average daily trading volume in the chain's share, which is owned by the Lewis family, which holds the majority of the shares (79.92%), is relatively low, and stands at about NIS 461,000.

On the other hand, the average daily trading turnover in the Fattal hotel chain is about NIS 14.8 million.

David Fattal, the controlling owner of the Fattal chain - a jump of almost 500% in the value of the low tide of the peak of the corona crisis (Photo: Creative Commons)

Excellent performance for Fattal: Begin to balance the corona days

Fattal, which manages about 42.9 thousand hotel rooms spread over 19 countries and is controlled by David Fattal (55.71%), is also traded on the Tel Aviv Stock Exchange worth about NIS 7.1 billion, after soaring about 497% since the stock market crash in Corona.

Fattal managed to present value to investors and returned almost all the value it lost during its corona period, which in mid-March 2020 dropped to NIS 1.1 billion, compared to a record value of NIS 8.1 billion only 3.5 months earlier.

The company's revenues were about NIS 3 billion for 2021 - an increase of about 59.7% compared to about NIS 1.9 billion revenues in 2020, but still in the gap from its revenues in 2019, which stood at about NIS 5.3 billion.

The activity of hotels in Israel contributed about NIS 1.3 billion of revenues (about 43%), and alongside it also contributed its activity in England, which was also freed from the restrictions of the Corona earlier than in other European countries.

Fattal's operating profit was NIS 500.4 million for the last reporting year, compared to a loss of NIS 758.8 million in 2020.

At the same time, it presented a reduction in its net loss to NIS 222.8 million, compared with a net loss of NIS 1.3 billion in 2020.

The corona continued to hurt the company's activity, especially in the first quarter of 2021, when its worldwide hotel occupancy was particularly low.

Neutralizing the IFRS (Accounting Reporting Standard), Fattal ended 2021 with a net loss of NIS 16 million, compared to NIS 1.1 billion in 2020.

The company notes that the recovery rate from the corona continues to be slow and unbalanced in various parts of the world. "Various levels of traffic restrictions, vaccination rates and tourist security," she wrote in the report, and that the return of the results of the tourism industry and hotels in the world to the level where pre-Corona were expected from 2024.

Israelis at Ben Gurion Airport: Will the fact that tourists are also allowed to enter balance the loss of income from domestic tourism? (Photo: Reuven Castro)

Will Israelis flee abroad?

Three hotel chains have benefited or will benefit from Corona grants, with Isrotel reporting NIS 1.1 million in grants in 2021, Dan reporting NIS 15.2 million in 2021, and Fattal reporting that she and her subsidiaries have received from various governments in Israel. And in Europe, about NIS 560 million in grants for 2021, of which about NIS 420 million from governments in Europe, and about NIS 140 million from Israel.

During the Corona period, the Israeli public became a captive customer of the Israeli hotel chains, and managed to return the oxygen to the latter recently, with their expectations for 2022 even higher.

In light of the busy queues at Ben Gurion Airport, it is clear that the local hotel chains are expecting a stubborn struggle against the Israeli tourist in front of their competitors abroad, after more countries remove restrictions and open their gates.

It remains for local hotel managers to hope that the demand for inbound tourism in Israel will return to its pre-Corona period, covering the expected decline in domestic tourism (assuming domestic and foreign restrictions will continue to be lifted).

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• Isrotel

• Fatal

• David Fattal

• financial reports

• Corona

• Hotels