A tourist rests during a visit at the Church of the Holy Sepulchre in Jerusalem's Old City
A tourist rests during a visit at the Church of the Holy Sepulchre in Jerusalem's Old CityReuters

The Israel Hotel Association is situated in the corner of a shabby mall-like complex at the southern end of Tel Aviv's beachfront strip. On the eight floor, Shmuel Zurel is greets me with a warm handshake and offers me a coffee.

Like many of the businesses and officials who I've met with on this trip, the director-general has the weary countenance of a man that's grown accustomed to dealing with bad news.

The association is an umbrella organisation for the Israel's hotels and acts to expand tourism in the country, which has just been decimated by the war with Hamas militants in Gaza. More than 2,100 Palestinians were killed in the fighting, most of them civilians according to the UN and Palestinian officials. On the other side, Israel lost 66 soldiers and seven civilians were killed.

The 50-day war sparked a wave of cancellations at Israeli hotels, as Hamas rockets landed in Tel Aviv and Gaza was pounded, first by Israeli fighter jets and later by ground forces.

"The total loss of traffic for the months of July and August is around, I believe, 330 million Israeli shekels until this moment. It represents a loss or decline of more than 35% of the average incoming occupancy of the hotels," Zurel says.

The war brought a screeching halt to the number of foreign visitors arriving in Israel, depriving hotels of their main customer base during the summer months. Zurel told IBTimes UK that the losses would be felt in the wider economy.

"Tourism is not a pure hotel, or other segment of the industry, business. It's a national business and if hotels are hurt, for every dollar that is lost in the hotel, two dollars are lost outside the hotel. If one hotel employee is let go, two outside the hotels are losing their jobs as well."

2014 was meant to be a record year for Israeli tourism. An increase in the number of low-cost flights to the country from the European Union was supposed to boost the appeal of the country to a younger urban crowd from European countries.

Indeed, the previous year had been a record breaker for the country, as more than 3.5 million people visitors arrived in Israel. Businesses had invested heavily in extra staff in a bid to capitalise on the predicted boom period.

"We made the preparations for a summit year," Zurel says. "You can imagine that the losses due to this are much higher because everybody got ready for the summer, recruiting manpower to the summit of its ability. All kinds of renovations and investments took place toward this demand. Therefore the loss is much higher than a regular year."

With tourism not expected to recover fully until next spring, the prospect of job cuts is hanging over staff that work in the sector.

"It will be a very tough period for everybody. I'm not so sure we'll be able to maintain employment of all of our employees," Zurel says.

"We'll try with the government to find some creative solutions of educational periods, training periods, any alternative rather than to fire those employees… with all these solutions I believe we'll be able to overcome it."