With 0% VAT for foreign tourists and 17% for domestic guests Israel applies today de facto a reduced VAT rate for hotels, as by far most of the countries in Europe do. 23 of 27 EU member states do apply a reduced VAT rate for accommodation. For very good reasons as the recent German case documents: In January 2010 the VAT rate for accommodation was reduced from 19% to 7% and since then the German hotels were able to invest about €1 bn per year on top and created 15,000 additional jobs. The price-value-ratio of German hotels improved considerably and total guest-nights are rising year by year significantly. Yes, tourists are price-sensitive.

Hotels may have to charge VAT but apartment owners are paying arnona! To say they are tax free is wrong. BTW NYC is one of the most expensive cities in the world. Our tourists pay all taxes AND a hotel tax on top of what residents pay. Yet, they keep coming. Give people a product they like and they will figure out how to pay for it.

don't forget the currency ;today the shekel is higher than the dollar or the euro about 10 % versus next year ; i am not sure tourists will go to PA but sure to refrain from spending money they don't have anymore

So if you dont want to rent or sale to israelis, ( i guess you are not living in China because your freedom of speech) and here in israel some safed rabbis believe israelis canot rent or sale properties to gentiles or non jews, what new ideas you think the israeli PM have in mind?

I am the former Director of New Route Development for Ryanair, Europe's leading low cost carrier and now its largest airline. I know as a result a thing or two about the price elasticity of tourists. Just as Ryanair's low fares has brought massive tourist numbers to many new destinations, the proposed 18% VAT on tourist services in Israel will severely damage Israe's viabilityl as a tourist destination, resulting in far less visitors and significant job losses in the hospitality sector. This proposal accordingly is sheer madness and needs to be dropped. It could very well be the case that the drop in the number of tourists will result in a greater loss in revenues than this new tax will ever be able to achieve. As a Zionist and regular visitor to Israel, I am bitterly dissapointed by the stupidity of this proposal.

While I had to pay a change fee to USAIRWAYS, it was a pittance compared to the 18% vat that I would have paid on 14 nights of hotel stay, and auto rental. Thank you, Lapid. I wasn't crazy about visiting in July, anyway. I read a Min of Finance comment stating that airfares will come down due to Open Skies agreement. My ticket from the east coast was over $ 1750, not exactly cheap. I'll use this savings fr two European trips.

When I see you move your residence to Logan Heights, is when I will believe that you'd consider a hotel in Ramallah to be cost-effective way to see Israel. Ho hum, another yammering Limousine Leftist hipster.

Well -- since you asked -- I think that Israel should throw out all of the Neturei Karta and Satmer leeches. Following that, we should throw out all of the Arabs who do not pay taxes, That is what I have in mind. Riddle me this: would you rent your home to an Israeli? Didn't think so ....

The fact that you somehow think that's racist shows even further your ignorance. Trust me, I've been to every continent, basically every single Muslim/Mideastern country and I've experienced all types/ price classes of accomodation. But those prices are mere ruthless, for half the price I've gotten the most luxorious accomodation during Safari trips, basically with personal servants who'd have wiped your ass if you wanted. So I know very well what I'm talking about. Sorry to give you your wake-upp call so harshly.