In good years, Vittorio Di Cesare's tours of Jerusalem's holy sites for November and December are booked up well in advance. This year, he doesn't have a single booking.

A wave of gun, knife and car-ramming attacks in Jerusalem and other cities, as well as clashes between Israeli security forces and Palestinian protesters, have sparked fears of a full-scale Palestinian uprising against the Israeli occupation.

At least 54 Palestinians and one Israeli Arab have been killed while carrying out attacks or in violent clashes with police, while eight Israelis have died in attacks.

Amid such tensions, usually bustling markets have had only a fraction of their shoppers and the tourism industry, worth an estimated $5 billion (4.5 billion euros) a year and employing some six percent of the Israeli workforce, is under threat.

With Christmas on the horizon and the potential for its usual flood of visitors to the Old City in Israeli-annexed east Jerusalem and Bethlehem in the occupied West Bank, tour operators are praying calm can be restored soon.
Tourist numbers were finally starting to rebound after last summer's Gaza war before the latest violence broke out in early October, usually the country's busiest month for visits.

"We... had almost one year of very few incoming (tourists)... but we started to work well in the last months," Cesare said.

"Because of the new situation, things are going very badly," added the 58-year-old Italian tour guide, who has lived in Israel for 30 years.

Business at the central Mahane Yehuda market in west Jerusalem, a popular destination for tourists, has been around five times lower than normal, shopkeepers there say.

In east Jerusalem's Old City, where Christians follow the path of Jesus's Stations of the Cross and tourists wander mazes of souvenir stalls and hummus joints, policemen and security guards have been posted in the narrow alleyways.
- 'Getting worse and worse' -
John Jessor, a 50-year-old Palestinian who runs a small shop at the entrance to the Church of the Holy Sepulchre, revered as the location of Jesus's crucifixion and tomb, said trade had fallen since the beginning of the month.
"The situation keeps getting worse and worse," he said.

In Bethlehem clashes have taken place only a few hundred metres (yards) from the Church of the Nativity, with coaches of tourists occasionally caught up in violence.

While many of the most popular tourist sites, including Bethlehem and Jerusalem's Old City, are technically in Palestinian areas, tour operations are predominantly based in Israel and tend to organise only brief visits.

The sector still makes up around 15 percent of the Palestinian economy, according to the International Chamber of Commerce, though the Palestinian economy is more than 20 times smaller than its Israeli counterpart.

"We feel that there is a decline in tourism," said a representative of Bethlehem's chamber of commerce. So far no figures have been released and the Palestinian tourism ministry is studying the impact of the unrest.

Sitting outside the Holy Sepulchre, Slovak tourist Marek, 22, said he and his parents were not too worried about their safety despite the violence.
"Nothing will happen to you in Israel, because for every tourist there is a policeman," he said.

Last year's Gaza war cost the tourism industry around one billion shekels ($260 million/230 million euros) in lost bookings, according to the Israel Hotel Association (IHA).

Tourist numbers for the first eight months of the year were down eight percent on 2014, according to the Israeli tourism ministry.

It is too early to assess the longer-term impact of the violence, said Amir Halevi, director general at the ministry.

"Right now (tourists) are continuing to come," he told AFP. "There are cancellations but they are small numbers."
"There are people that changed and (are) going more to Tel Aviv and less to Jerusalem, but we can understand that."

Pnina Shalev, spokeswoman for the IHA, said Israeli hoteliers were anxious about the coming months.

"October and November should be the best months during the year for incoming tourism. But we are (concerned) about December, January and February," she said.

 

- Palestinian economy at risk -

 

For Israel's economy more generally, the unrest could have a significant impact.

The previous Palestinian intifada, or uprising, which ran from 2000 to 2005, slowed growth by seven percent, according to Assaf Razin, economics professor at Tel Aviv University.

He said small short-term impacts of the recent turmoil were already being felt, with a weakening in the currency. A drawn-out crisis could have a more "formidable" effect, he said.

"Israel will have to increase security and defence expenditure at the expense of social expenditures such as education," said Razin.

A decrease in foreign investment and an exodus of the country's brightest minds were other threats, he added.

But the impact for the Palestinian economy would be even more pronounced, said C. Ross Anthony, director of the Israeli-Palestinian Initiative at the US-based RAND think tank.

In a recent study, he assessed the economic impact of potential political scenarios over 10 years.

A return to outright conflict would overall hurt the Palestinian economy more than four times more than the Israeli economy in terms of percentage of GDP lost, it concluded.

Source: AFP