Israel’s battered tourism industry is showing the first clear signs of recovery, with fresh data for 2025 pointing to rising visitor numbers, renewed airline confidence and a slate of major infrastructure and airline investments timed to unlock further growth from 2026 onward.

After two bruising years marked by war in Gaza, repeated flight suspensions and steep revenue losses, officials and industry leaders are now betting on an expansion phase that will test both Israel’s capacity and its ability to reassure wary travelers.

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From crisis to cautious recovery in 2025

Tourism ministry figures for 2025 indicate that roughly 1.3 million foreign visitors entered Israel during the year, a 38 percent jump on 2024 but still far below pre-war volumes.

Before the Gaza conflict erupted in October 2023, Israel had been on track to surpass its 2019 record of 4.5 million tourists and was targeting 5.5 million arrivals in 2023.

Instead, the war triggered an abrupt collapse in demand, with an 80 percent plunge in arrivals in late 2023 and a net tourism loss estimated in the billions.

The rebound in 2025 has been driven in large part by North American and European travelers. The United States alone contributed about 400,000 visitors, by far the largest single source market, followed at a distance by France and the United Kingdom.

Other key markets, including Russia, Germany, Ukraine and Romania, are also reappearing on arrival boards even as many group tours and religious pilgrimages remain below historic levels.

Officials stress that the current upswing is beginning from an exceptionally low base. In mid-2025, some months still showed double-digit percentage drops compared with already depressed 2024 figures, particularly during periods of heightened regional tension that prompted temporary pullbacks by foreign carriers. Yet the broader trajectory over the year has been upward, aided by the easing of some travel advisories, the re-entry of major airlines and the perception, among many visitors, that day-to-day life in Israel has stabilized sufficiently for tourism to resume.

Tourism accounts for roughly 3 percent of Israel’s economy and supports about 200,000 direct jobs, from hotel staff and tour guides to transport operators and restaurant workers. The sector’s partial revival in 2025 is therefore being closely watched by policymakers as an early indicator of wider post-war economic normalization.

Ben Gurion Airport braces for a new wave of passengers

Nowhere is the shift from crisis management to future planning more visible than at Ben Gurion International Airport, the country’s primary gateway near Tel Aviv. Passenger traffic there rose by about a third in 2025, to 18.5 million travelers, as foreign airlines returned and Israelis resumed outbound leisure and business trips in large numbers. December 2025 alone recorded a near 60 percent year-on-year jump in passengers, underlining how quickly volumes can snap back once security conditions and airline schedules permit.

To cope with expected growth through the end of the decade, the Israel Airports Authority has accelerated a multi-year expansion program. A centerpiece is a roughly 310 million shekel project to enlarge Terminal 3 by about 7,000 square meters over four floors, upgrading security and border control areas and creating a new ground-level “Tel Aviv Gate” for passengers arriving by bus. Construction, expected to last around 30 months, will take place while the airport remains fully operational, forcing carefully sequenced works to minimize disruption.

Additional projects include an expanded duty-free food court, enlarged baggage and security screening zones and the rollout of new automated passport control systems designed to speed throughput during peak times. Earlier in 2025, a new check-in and security “plaza” opened in Terminal 3, adding 22 counters and upgraded screening equipment. Terminal 1, the lower-cost facility used by many budget carriers, has also been gradually restored to full international operations as European aviation authorities lifted safety advisories.

Airport planners warn that even with these upgrades, Ben Gurion could be pushed close to its practical capacity by 2030 if visitor growth approaches pre-war projections. Long-debated ideas for a second major international airport remain on the table but unresolved. In the meantime, the focus is on squeezing more capacity and smoother flows out of existing facilities, in order to support an anticipated tourism expansion from 2026 onward.

Low-cost carriers, new hub plans and competitive tensions

The airline mix serving Israel is also shifting as carriers recalibrate their post-war strategies. While Israeli flag carrier El Al remains the single largest airline at Ben Gurion, its market share fell from roughly half of passenger traffic in 2024 to just over a third in 2025 as foreign airlines ramped up their schedules. Smaller domestic players Israir and Arkia have defended their niches but face intensifying competition on popular regional and European routes.

One of the most consequential developments for 2026 is the planned establishment of a hub by Hungary-based low-cost giant Wizz Air. The airline’s chief executive has said Wizz aims to open a base in Israel by March or April 2026, stationing up to 10 aircraft, launching around 50 routes over several years and investing as much as 1 billion dollars in the country. The company is weighing whether to anchor the hub at Ben Gurion or at Ramon Airport near Eilat in the south.

Israeli officials, including the transportation minister, have hailed the prospective Wizz hub as a lever to increase competition, push down airfares and expand direct connections to secondary European cities that currently require connections. However, domestic airlines and labor unions have criticized what they see as preferential treatment for a foreign carrier, including concerns over security cost-sharing and labor standards. The debate underscores a broader policy dilemma: how to attract investment and capacity from global low-cost players without undermining local airlines still recovering from the shocks of war.

The picture is further complicated by the retreat of some other budget operators. Ryanair, Europe’s largest low-cost carrier, has suspended its low-fare operations to Tel Aviv for the winter 2025 to 2026 season after a dispute with the airport over use of the cheaper Terminal 1 versus the main Terminal 3. The Irish airline has warned that it will not commit to future schedules, including for summer 2026, without clearer guarantees on slots and terminal access, demonstrating how infrastructure constraints and security-driven operational changes can directly affect route economics.

Hotels pivot from evacuees back to tourists

On the ground, Israel’s hotel sector is in the midst of a complex rebalancing. During the height of the Gaza conflict and related tensions on the northern border, the Tourism Ministry and other agencies commandeered hundreds of hotels and guesthouses across the country to house more than 100,000 evacuees from frontline communities. That emergency program, which peaked in 2024 and continued into mid-2025, provided a financial lifeline for many properties even as international tourism dried up.

With large-scale evacuations rolled back in 2025, hotels have gradually pivoted back toward commercial guests. Industry data show that domestic tourism remained robust throughout much of the crisis, with Israelis taking millions of overnight stays in coastal cities, the Galilee and the Negev when security conditions allowed. This steady local demand helped some hoteliers keep staff employed and maintain basic operations until foreign visitors began returning in larger numbers.

As international arrivals ticked up in 2025, particularly from the United States and Europe, average spending by independent travelers also rose. Surveys conducted by the Tourism Ministry suggest that foreign visitors spent on average more than 1,600 dollars per trip excluding airfare, up significantly from the previous year, even as the average length of stay shrank slightly to around nine nights. Industry executives interpret this as evidence that those willing to travel to Israel in a period of lingering tension tend to be higher-spending, purpose-driven visitors, including business travelers, diaspora tourists and religious pilgrims.

At the same time, hoteliers must now navigate rising operating costs, including wages, energy and security outlays, while contending with the possibility of renewed disruptions. Several major international chains have reiterated their long-term commitment to Israel and are pressing ahead with renovations or new properties planned before the war, although some projects remain delayed. Looking ahead to 2026, developers are prioritizing flexible designs that can serve both leisure demand and, if needed, temporary housing for evacuees or emergency workers.

Marketing Israel abroad while managing security perceptions

For the Tourism Ministry, the next phase of recovery hinges on rebuilding Israel’s image abroad as a safe and rewarding destination, even as the underlying political and security situation remains fragile. Ministerial statements over recent weeks have framed 2026 as a “year of recovery,” with new marketing campaigns being prepared for major source markets in North America, Western Europe and selected emerging markets.

Officials are emphasizing not only religious and historical attractions in Jerusalem, the Galilee and the Negev, but also Israel’s contemporary cultural and culinary scenes in Tel Aviv, Haifa and other urban centers. There is a renewed push to attract city-break travelers, conference organizers and tech-sector delegations, segments seen as more resilient and less price-sensitive than traditional package tours. Digital campaigns are expected to target independent travelers who research and book directly online, highlighting updated safety information and flexible booking policies.

However, persuading risk-averse travelers and large tour operators to return in force will take time. Many governments still maintain travel advisories for parts of Israel, and sporadic incidents, including missile strikes and cross-border flare-ups, can quickly reignite concerns. Industry insiders acknowledge that global media coverage of the Gaza war and its aftermath has left deep impressions on potential visitors, some of whom may associate Israel primarily with conflict imagery rather than tourism offerings.

To counter this, the ministry and private operators are seeking to leverage strong satisfaction scores from those who did visit in 2025. Surveys show that nearly nine in ten foreign tourists rated their trip positively, and more than four in five said they would recommend Israel to others. Travel agencies report that word-of-mouth and firsthand testimonies from returning visitors are currently among the most effective tools in convincing hesitant travelers to book.

Domestic travel and regional shifts reshape demand

Even as inbound tourism recovers, domestic travel patterns within Israel have shifted in ways likely to influence investment decisions for 2026 and beyond. During periods of heightened tension near Gaza and on the Lebanese border, many Israelis redirected leisure trips to relatively quieter central and southern regions, boosting demand for coastal resorts along the Mediterranean, desert lodges in the Negev and urban stays in Tel Aviv and Jerusalem.

This internal resilience has encouraged some developers to prioritize mixed-use projects that can cater to both local and foreign guests, reducing reliance on any single source market. Boutique hotels and short-term rental properties in Tel Aviv, Jerusalem and Haifa, which draw heavily on Israeli weekenders as well as international visitors, have proved particularly adaptable. Rural guesthouses and kibbutz-based accommodations are also investing in upgrades, betting that nature-based and wellness tourism will remain attractive to both audiences.

Regionally, the government continues to promote Eilat and the Negev as strategic growth corridors for tourism, banking on improved road links, the relatively new Ramon Airport and year-round sun. Yet the pace of development there depends heavily on air connectivity, including the outcome of Wizz Air’s hub location decision and whether other carriers follow with additional seasonal or year-round routes. Any prolonged absence of major low-cost players could limit Eilat’s ability to capture budget-conscious European travelers seeking winter sun alternatives to traditional Mediterranean destinations.

At the same time, geopolitical realignments in the broader Middle East, including fluctuating ties with Gulf states and shifting aviation routes due to Red Sea security risks, create both headwinds and opportunities. Israel’s tourism planners are watching closely to see whether multi-country itineraries that once paired Israel with Jordan or Egypt can be revived at scale, or whether new regional circuits might emerge as political dynamics evolve.

Infrastructure bets point toward a 2026 expansion phase

Despite the unresolved security and diplomatic challenges, the scope of current infrastructure and airline investments indicates that both public authorities and private players expect tourism flows to grow substantially from 2026 onward. The Terminal 3 expansion, new security and check-in facilities, revamped duty-free zones and planned Wizz Air hub all reflect medium-term confidence that demand will justify the added capacity.

If the current ceasefire in Gaza holds and broader regional tensions can be contained, officials believe Israel could move from partial recovery in 2025 to a more pronounced expansion phase in 2026 and 2027. Under that scenario, tourism receipts would rise sharply from the depressed levels seen in 2024 and early 2025, helping to recoup some of the estimated multi-billion-shekel losses incurred during the war. The sector’s labor market could also tighten as hotels, tour companies and airports compete for experienced staff, potentially pushing up wages and spurring new training initiatives.

However, industry leaders caution that forecasts remain highly contingent on politics and security. Any renewed large-scale conflict would almost certainly prompt fresh flight suspensions, insurance complications and travel advisories, eroding the fragile gains of the past year. Environmental and regulatory pressures, including debates over short-term rentals, coastal development and crowding at heritage sites, add further layers of complexity to long-term planning.

For now, Israel’s tourism industry enters 2026 with a mix of hard-earned realism and measured optimism. Visitor numbers are climbing from a deep trough, airports and hotels are investing for growth, and foreign carriers are once again weaving Israel into their route maps. Whether those strands coalesce into a sustained expansion, or are cut short by events on the ground, will determine if the tentative recovery of 2025 marks the beginning of a new chapter or merely a brief respite in a volatile decade.