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Will Israel Tourism Bounce Back Quickly?

Tourism to Israel, badly damaged by rocket fire from Gaza during an Israeli offensive against Islamist militants in the enclave, should bounce back later in the year, Tourism Minister Uzi Landau said on Tuesday.

More than 3.5 million visitors came to Israel in 2013, pumping some 40 billion shekels ($12 billion) into the economy and 1.9 million came in the first six months of the year.

Landau said the tourist industry had been on course for 4-4.1 million visitors in all this year. But the Gaza flare-up that began on July 8 caused a 35 percent plunge in visitors at a cost of $500 million in lost revenue for the third quarter, according to an Israel Hotel Association (IHA) estimate.

That loss was “far too much” for a country that relies on tourism for as much as 6 percent of its GDP , Landau told Reuters in an interview.

“This year we would have had 4 to 4.1 million. It won’t get there. It is not going to be a great year, another record year, as we had hoped, but we still hope for a good year. We hope to have at least the figure of last year. We believe things will be back on track in the next three, four months,” he said.

Calm returned on Tuesday as Israel withdrew ground forces from the Gaza Strip and started a 72-hour ceasefire with Hamas, mediated by Egypt as a first step towards negotiations on a more enduring end to the month-old war.

Over the past month, during the peak of the tourist season, some 3,000 rockets were launched into Israel from Gaza, causing mass cancellations by foreign visitors; many Israelis themselves aborted travel plans within the country for their holidays.

Most of the rockets launched into Israel were intercepted by its Iron Dome anti-missile defense shield, or fell into uninhabited open areas. Overall, the rocket fire caused minor, isolated damage.

Landau said tourism bounced back within four to six months after three recent Israeli military operations – two with Gaza, in 2009 and 2012, and one with Hezbollah in Lebanon in 2006.

“For the entire economy (the war) will be a dent but tourism will be two dents,” he said.

Landau said the recent wave of tourist cancellations arose from the perception that Israel was not safe. He said a directive by the U.S. Federal Aviation Administration last month to ban U.S. airline travel to Tel Aviv for two days after a rocket landed near Ben Gurion airport was unnecessary.

“Our airport is the most secure in the world,” he said. “Hamas tried their best to focus on the airport but they had no success whatsoever.”

Still, German tour operator TUI Deutschland, part of Europe’s largest tour operator TUI Travel, said on Tuesday it had extended a precautionary policy of taking no bookings for Israel until Aug. 31.

Landau said the government was discussing compensation for the Israel’s tourist sector. His ministry had also launched a local campaign encouraging Israelis to travel in the last weeks of summer vacation while also targeting the main foreign markets – the United States, Russia, Germany, Britain, France and Italy.

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