Israel’s struggling tourism sector is expected to take another hit from Sunday, when new restrictions barring entry to non-nationals for two weeks are expected to take effect to prevent the spread of the COVID-19 Omicron variant.

Israeli Tourism Minister Yoel Razvozov said on Sunday that the government would formulate a “compensation plan” for those working in the tourism industry within a week, a day after Israeli ministers approved the new restrictions.

Razvozov said he had asked the government to approve a decision for a “compensation plan within a week for industry professionals, including tour guides, tour operators and hotels that work with incoming tourists.” . The minister said there was broad agreement and that work on the plan would start in cooperation with the finance ministry.

Razvozov also said the compensation plan could include funds for Israelis who have had to cancel upcoming flights and trips. Head of the Israeli arm of travel solutions company Amadeus, Avishay Cohen, on Sunday told Ynet that less than 10% of trips booked with the company had been canceled since South African officials rang the bell. alarm about the variant at the end of last week. However, he noted that there had been a drop of around 50% in the number of new trips booked.

The new travel restrictions are expected to take effect Sunday night at midnight and will prevent foreign nationals from entering Israel for 14 days, barring foreign nationals from entering Israel for 14 days unless they are given special permission of a government panel. On Saturday evening, ministers also extended the mandatory quarantine to vaccinated Israelis arriving from abroad and gave the green light to the Shin Bet security agency to resume tracking those infected with the new variant.

The move dealt yet another blow to Israel’s tourism and aviation industries, which have been devastated by the pandemic and the restrictions that accompany it and have not had time to recover. The vast majority of tourists have effectively been banned from entering Israel since just before the country’s first pandemic lockdown in March 2020.

Israel did not reopen its skies to foreign tourism until early November, allowing people who have been vaccinated or who have recovered from the disease.

The decision to reinstate an entry ban for foreign travelers is “very serious because we have just reopened the skies and the industry needs stability,” Razvozov said on Sunday.

At the same time, Razvozov said the decision was justified given that even vaccinated Israelis returning from abroad will have to be quarantined under the new restrictions.

Medical authorities said they needed about two weeks to better understand the threat posed by the Omicron variant.

Under the new restrictions, vaccinated citizens – who under existing rules were required to take a coronavirus test on landing and remain in isolation until they test negative – will now be required to enter quarantine for 72 hours and take another COVID test on the third day. after their arrival. Unvaccinated Israeli travelers must remain in quarantine for at least a week and can leave isolation after receiving a negative test result on the seventh day. Israelis coming from high-risk “red” countries must self-quarantine in designated public hotels until they receive a negative virus test result.

“If we impose quarantines on Israelis, we have to impose them on tourists and there are no tourists who want to come here and sit in quarantine,” the minister said.

Razvozov also said the next Miss Universe pageant, which Israel is planning to host next month in Eilat, will go ahead as planned. He said participants would benefit from waivers and possibly have to undergo PCR testing every 48 hours.

“This is an event that will be broadcast in 174 countries – a very important event,” Razvozov said.

‘It’s an emergency’

In a letter to the ministries of finance and tourism on Sunday, the president of the Israeli Hotel Association Avi Nissenkorn wrote that “until the barriers to entry are removed, hotels that welcome incoming tourists will not recover ”.

Nissenkorn, who was previously justice minister in the last government, said the industry “needs help to survive this critical time until tourists return. For us, this is an emergency … So that the infrastructure of hotels that work with tourists is not fatally damaged, an updated plan must be drawn up and assistance must be provided to [the sector] at once.”

Before the pandemic, the tourism industry employed around 140,000 people (at the end of 2019, according to the Ministry of Tourism) and contributed more than 2% to the gross national product.

The number of inbound tourists fell 80% in 2020, a drop from record numbers in 2019 which were worth $ 7.2 billion to the economy when a record 4.55 million visitors that year.

Amid the pandemic, the government announced a stimulus package of around NIS 300 million ($ 85 million) in June 2020 to help the struggling tourism sector, but it is unclear how much of the amount was distributed. .

Separately, the finance ministry last week announced an additional bailout for Israeli airlines affected by the pandemic, approving an aid package that would not exceed $ 44 million and take the form of three-way bonds. years without interest.

The plan follows another plan to help the national airline El Al, approved in March, to purchase $ 210 million in advance tickets for security personnel.

El Al recorded a massive loss of half a billion dollars in 2020 as its passenger flights were stranded for most of the year due to the pandemic. The struggling airline put most of its staff on leave with the start of the pandemic and has since cut around 2,000 jobs. The company was acquired by Kanfei Nesharim, controlled by Eli Rozenberg, last September.

The scared markets

Global markets reacted strongly to the discovery of the new Omicron variant and its spread across the world on Friday as the European Union and the United Kingdom both announced travel restrictions from southern Africa. After the market closed, the United States also imposed travel restrictions on people coming from South Africa as well as seven other African countries. Israel followed a day later with the announcement of a ban on all non-Israeli citizens from midnight Sunday.

Shares fell on Friday as the Dow Jones Industrial Average briefly fell more than 1,000 points. The S&P 500 Index lost 106.84 points, or 2.3%, to close at 4,594.62. It was the worst day for the Wall Street benchmark since February.

The index was dragged down by banks, travel agencies and energy companies, among others, as investors tried to reposition themselves to financially protect themselves from the new variant. The price of oil has fallen by about 13%, the biggest drop since the start of the pandemic, amid fears of a further slowdown in the global economy. This in turn lowered energy stocks.

On Sunday in Israel, the Tel Aviv 35 index of the 35 top-listed companies fell 1.5% at the end of the day. The Tel Aviv 90 Index, made up of 90 stocks with the highest market value on the Tel Aviv Stock Exchange, fell 1.9%, according to the financial daily Globes.

Those numbers were modest compared to March 2020 when, just before the government imposed a national lockdown, the Tel Aviv 35 index fell 8% and the Tel Aviv 125 index fell more than 7%.

Among the Israeli companies hardest hit on Sunday was the hotel chain Fattal, whose shares fell more than 8%.

Globally, investors have shifted money to companies that have benefited greatly from previous waves, like Zoom Communications for meetings or Peloton for home exercise equipment. Shares of both companies rose nearly 6%.

Airlines shares quickly sold off, with United Airlines losing 9.6% and American Airlines 8.8%

Coronavirus vaccine makers have been among the biggest beneficiaries of the emergence of this new variant and the investor response that followed. Pfizer stock rose more than 6% while Moderna stock jumped more than 20%.

Shoshanna Solomon and AP contributed to this report.