SMART-RFA-001

The tourism industry in the West Bank and Gaza, as around the world, experienced a near total shutdown during 2020 and much of 2021 as a result of COVID-19. The Tourism Rapid Recovery Program, launched in November 2021, is supporting the Palestinian tourism industry by identifying and mobilizing potential and existing market demand among Arab citizens of Israel, while simultaneously supporting hotels and handicraft producers to restart operations from low or non-existent levels.

LOCAL MARKET DEVELOPMENT

Prior to COVID-19, Arab citizens of Israel comprised more than one third of hotel occupants in WBG. As vaccination rates rise, our research shows that Arab citizens of Israel are again ready to travel to visit friends and family, as well as to reconnect with important religious, cultural, and historical sites. This demand provides a critical market opportunity for tourism actors—particularly hotels and handicraft producers—to restart COVID-compliant operations.  

In partnership with the Arab Hotel Association (AHA) and a local marketing agency, SMART is launching a comprehensive domestic tourism marketing program, promoting visits and lodging options in the West Bank. The marketing agency that will develop this program will be selected through a competitive process based on 1) their experience and ability to target Arab tourists from Israel, 2) an understanding of market preferences, and 3) contacts with influencers in both Israel and the West Bank. The marketing agency will rely on thorough research and technical expertise from the tourism sector and will work with a diverse network of local authorities, private sector and tourism operators, tourism associations and intermediaries to implement this promotional program.

HOTEL RECOVERY

SMART supports local hotels to restart their businesses in preparation for returning clientele. Prior to the COVID-19 pandemic, West Bank and Gaza had 200 hotels (with 9,000 rooms) operating at 80% capacity and supplied 6,000 jobs. After conducting a rapid assessment, SMART found that there are now 163 hotels, of which 27 are partially operational (with occupancy rates approaching 0%).  

As a result, SMART launched a competitive grants process to identify approximately 40 hotels for recovery support. To be eligible, hotels must be formally licensed and registered and must have demonstrated growth potential and willingness and ability to benefit from this market opportunity.

Successful hotels who apply for assistance will qualify for in-kind grants with an individual award ceiling of USD 70,000 based on hotel size and risk profile. The primary function of these grants will be to support discrete capital expenditures necessary to reinitiate operations in anticipation of increased occupancy in the near future. Capital expenditures are expected to include required upgrades and refurbishments of hotel facilities. In addition, SMART supports the repair and replacement of critical equipment and systems. Grants includes critical training for new and existing staff on COVID-19 protective protocols per regulations issued by Ministry of Health and Ministry of Tourism.

Following a competitive selection process, SMART is providing In-Kind Grants to cost share up to 50% of capital expenditure, 100% of online trainings and 70% of any additional certification trainings.

HANDICRAFT EXPORT SUPPORT

The Palestinian handicraft sector is critical to both economic recovery and cultural preservation in WBG. Traditional techniques have been passed down from master to apprentice for generations across 17 unique sub-sectors including furniture making, wood carving, glass blowing, and embroidery. Prior to COVID-19 approximately 10,000 workers were employed in 500 small workshops and artisan shops clustered in Bethlehem and Hebron. Sector sales were estimated at USD 50 million, with about 30% sold domestically, 35% destined for the Israeli market, and the remaining 35% exported to Europe, the US, and other Arab countries.

Following meetings with sector representatives and manufacturers to examine the impact of COVID-19, SMART found that the sector has been badly affected and most of the workshops were closed. However, the Handicraft Village in Beit Sahour—initiated under the USAID’s Compete Project, and now called Bethlehem Fair Trade Artisans—was able to survive and continue minimal exports to some US and EU buyers.

SMART will build on the Compete Project’s success, preserve past USAID investment in the sector, and support at least one handicraft trade center to be able to expand business cooperation with handicraft producers, and perform as a buying house function. USAID support will focus on marketing skills (including digital marketing) and outreach to new buyers and markets