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H OSPITALITY AND T OURISM A DVISORY S ERVICES. Future Marketing Strategy for the International Markets November 2006. e. Quality in Everything We Do. The surveys clearly revealed Israel has considerable “growth prospects” in the international markets.

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Future Marketing Strategy

for the International Markets

November 2006


Quality in Everything We Do

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The surveys clearly revealed

  • Israel has considerable “growth prospects”

    in the international markets

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Which strategies / measures are necessary

  • to realize these growth prospects

  • to convert interest into trips?

    Or else:

  • What does the realization of the growth prospects depend on?

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Overcoming the Barrier “Political Situation”

Israel’s political situation acts as a strong barrier, but this should

  • not be an argument for being inactive in the international markets

    In contrast,

  • the political situation should be a spur to be particularly active in the markets

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  • the more present

  • the more attractive

    Israel appears as a tourism destination in the international markets,

  • the more this barrier can be overcome

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Active Marketing

The precondition to realize Israel’s growth prospects is

  • a very active

  • continuous

  • long-term oriented

    marketing in the international markets

    And (in connection thereto)

  • a sufficient / long-term secured marketing budget

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5-Year Marketing Program

In a first step, irrespective of the political situation, an at least

  • “5-year marketing program”

  • with a guaranteed “5-year marketing budget” has to be consequently realized

(For more than 5 years Egypt e.g. is consequently and successfully adhering to its marketing program – independent from political events)

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The Aim for the Int'l Markets:

A realistic target (also considering political setbacks and, on the other hand, aviation reform) is:

  • to double the number of international tourists in the next 5 years

4-5 m

2 m

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The Potential

  • Substantial growth prospects for Israeli economy

  • Doubling the number of annual international visitors by 2011 to 4 million visitors could result in:

    • An annual addition of approximately NIS 18 billion in international travel and tourism receipts in Israel

    • An annual addition of approximately NIS 15 billion to Israel’s GDP

    • The creation of nearly 45,000 new jobs in Israel

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Marketing Strategy for the Int’l Markets

What would be the most important strategies / measures for the international markets in order to reach this target?

At first: to select the right markets for investment

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Priority / “High Potential” Markets

“First Priority” Markets


Great Britain


The “three Big” demand markets worldwide with high Interest Potentials for Israel

The second most important market for Israel at present with a traditionally high affinity towards Israel




A growing market with a high interest in Israel

A smaller but very high spending market and having an above average interest for Israel

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“Second Priority” Markets






A smaller but substantial, high-spending market

A smaller market, but having one of the highest outbound travel intensities

The most important Eastern European source market but altogether a smaller outbound market

A smaller market for overseas trips but having a high ethnic / Jewish share

A smaller market but a growth market, also with an interest in Israel (but only for 1-2 stays in the scope of a multi-destination trip)

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Non-Priority Markets (at least in the next 5 years), among others




Small outbound market, primarily business trips

Smaller / low spending market (religious-inclined market)

Small / low spending outbound market

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“High Potential” / Most Promising Markets for Israel: others

  • France

  • Italy

  • Sweden

  • USA

  • Great Britain

  • Germany

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Marketing / advertising budgets should above all invest in others

  • the first priority / “high potential” markets,

    the markets with the best earning prospects for Israel

and only to a lesser degree in

  • the second priority markets

No specific investment (at least in the next 5 years) in

  • the “non-priority” markets

After 5 years the ranking of the high potential markets / budget allocation should be reviewed and adjusted if necessary

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Future Target Groups / High Potential Segments others

Israel’s growth prospects in the international markets lie above all

  • in the “holidaymaker” segment

  • namely, in the segment interested in “Culture / Tour”

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Additional segments (but only for smaller target groups and/or

single markets):

  • Sun&Beach with affinity for culture

  • religiously-motivated / Pilgrimages

  • ethnic / VFR

    Generally not a target group for Israel:

  • families with small children

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The Future Product Strategy and/or

The absolute main product for all international markets / the product with the best market chances is

  • the Tour

In European markets: primarily Tour only Israel

America: Both, only Israel and multi-destination Tour (Greece, Egypt, Italy)

Asia: Only multi-destination Tours (whereas the visit of Israel is limited to a maximum of 1-2 days)

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Strengths of the Tour and/or

  • highly competitive (due to the uniqueness of the religious sites)


  • less price-sensitive

  • less safety-sensitive

    due to less exchangeable:

    - the “pyramids” can only be found in Egypt

    - the “places of the bible” only in Israel

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Also important for all markets: and/or

  • Tour with a few “relaxing days”

    above all at the seaside (Tour combined with Sun&Beach)

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Further products and/or for the international markets

(although for smaller target groups and not for all markets):

  • Sun&Beach holiday at the Red Sea (especially Great Britain, Sweden)

  • Traditional religious Pilgrimage (USA, Italy, Poland, Canada)

  • Spiritual/ Meditative/ Self-finding trips (Germany, Sweden, Italy, USA)

  • Visiting Israel as part of a cruise (Great Britain, Sweden)

  • Medical stay at the Dead Sea (Russia, Germany)

  • CityBreak (Jerusalem) (Italy)

  • Kibbutz stay (young people) (France, Sweden)

  • Desert trip (Sweden)

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The Future Price Strategy and/or

The realization of Israel’s growth prospects will also significantly depend on

  • the price strategy Israel follows in the future

In this context, it is decisive:

  • prices must not constitute a second barrier (beside the political barrier)

    on the contrary,

  • prices should be an instrument to somewhat compensate the risk of the political situation

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Given moderate prices, and/or

  • the political barrier can be brought down


  • a much broader target group can be reached (a large part of the Israel potential, especially in Europe, comes from the middle income brackets)

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Therefore, in the international markets, Israel should primarily follow a

  • “mid-priced” strategy

Thus important:

  • A sufficient offer “good quality mid-grade accommodations” (3-star hotels, particularly also with a sense of place)

  • inexpensive air fares

Focusing on a mid-priced offer does not exclude high-priced offers, but the main emphasis should remain on good quality mid-grade offer

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The Future Distribution Strategy primarily follow a

The main distribution channel for Israel in the international markets should be

  • Tour Operators / Travel Agencies

In order to better exploit the large interest potential, Israel needs to

  • strongly cooperate with tour operators / travel agencies

    and should

  • significantly increase the number of tour operators / travel agencies offering Israel

    This represent a central marketing task in the next years to come

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What do tour operators expect from Israel? primarily follow a

  • Financial support in subsidizing aviation in the form of a safety net for seat occupancies / cancellations(although only relevant to large tour operators with own charter flights)

  • Well-priced flights(generally more important because this also benefits the small and medium-sized tour operators)

  • Free information trips(particularly important for tour operators not offering Israel)

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But: primarily follow a

The by far most important sales-supportive measure from the tour operators’ / travel agencies’ view would be

  • a more “moderate price policy”

    and conducting

  • a continuous / intensive “consumer advertising”

    both in order to activate / increase the consumer demand

Therefore, the so-called “safety net” would be an important but only flanking measure (for large tour operators with own charters only)

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Expected support in the case of an “acute crisis”: primarily follow a

  • fast, honest and reliable information

  • professional first response / evacuation measures

  • assumption of all costs (cancellations / transportation, etc.)

    and a “post-crisis management”, including:

  • advertising to rebuild the clients’ trust

  • reduction of prices / special offers in the following season

That means, decisive for the tour operators are:

  • moderate prices

  • and consumer advertising

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The Internet as a Sales Channel primarily follow a

The tour operators themselves are increasingly offering online bookings

At least for the next few years, Israel should refrain from its own online sales because:

  • personal contact and consultation are very important in the case of Israel


  • it would be counterproductive for a good and close relationshipwith tour operators

Except: Flight bookings for repeat / VFR-visitors

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The Future Communication Strategy primarily follow a

The image of Israel (above all in Europe) is a negative image shaped by the political situation

It is a “must” to contrast this negative (news) image in the future

Therefore, if Israel wants to better exploit its large interest potential, it is a precondition (irrespective of the present political situation):

  • to run a strong consumer “advertising campaign”

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With highest priority, Israel has to set up a second / positive / peaceful

in the markets / in the consumers’ minds

a “touristic” image

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The development of such a second / touristic image cannot be done overnight

This is:

  • a long-term process

  • following a long-term concept

  • which should only be briefly interrupted in the case of a political event

    It is a measure which is also long overdue from a touristic point of view – but not only:

  • such a campaign would also have an extremely important function for Israel in general

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In a first step, a done overnight

should be provided for the international markets

This budget would be in line with the competitors

And this budget represents a precondition to realize Israel’s growth prospects

  • 5-year budget of 250 million USD

  • 50 million USD per year

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In this context, it should again be mentioned that done overnight

  • tour operators give such a touristic image campaign a higher priority

  • than a so-called “safety-net” (subsidizing in the aviation sector)

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ROI of 9:1 done overnight

  • Our analysis suggests that for every additional dollar invested in marketing, the return on investment will be $9 in additional spending

  • An annual increase in marketing spending to $50 million could initially yield an annual average of $447 million in spending and over 510,000 additional visitors.

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In general important for the future advertising measures: done overnight

It is not recommendable to

  • provide “ad hoc budgets at the end of the year”

  • sporadically place one or two ads or TV commercials

  • change the advertising concept / line within short intervals

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Additional communication measures: done overnight

  • Development of a “crisis plan”


  • a superlative Israel “website” as the central information system

In contrast: Printed promotional material as a Tourist Board service abroad can be dispensed with

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Summary done overnight

Israel has

  • a large unexploited interest potential in international markets

  • and thus considerable growth prospects

  • The political situation acts as a barrier but it can be overcome via

    • the establishment of an attractive “touristic” image

    • and a “moderate price” policy

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Israel’s done overnightmost important strength is

  • its worldwide unique “religious culture / history”

    (but primarily in a touristic culture / sightseeing than a pure religious sense)

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Recap of Core Measures for Int’l Markets: done overnight

  • Concentration on the first priority / high potential markets

  • Concentration on the core product “Tour”

  • Implementation of a 5-year image campaign(with a budget of 250 million USD)

  • Following a “mid-priced”strategy

  • Close partnership with tour operators / travel agencies as the central distribution channel

  • Improvement of the offer quality / orientation on the core product “Tour”

  • Improvement of the flight offer / cheaper flight prices

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Great prospects for Israel done overnight

Take your chance!