The first quarter of 2009 saw a 30% drop in travel agency activity, data collected from travel agencies between the months January-April showed.
A slight rise in the number of Israeli travel abroad was briefly noted during the Passover holiday period, but did not last beyond that.
"What's been happening in recent months is simply a collapse," a senior member of the travel branch industry said on Wednesday, "Those that were hit the hardest are the mediocre travel agencies, that make a living from business tourism."
According to the source, the thing that is preventing the industry from complete collapse is the competition between airlines that has led to a drop in flight fares and is encouraging people to take vacations.
Meanwhile, Mickey Federman, chairman of the Dan Hotel chain warned on Wednesday against the proposed annulment of Israel's tourist tax exemption.
Federman sent an urgent letter to the prime minister, finance minister and tourism minister, in which he warned that such an annulment could lead to the termination of some 9,000 employees in the various tourism branches, and a decrease to the State's income in the amount of hundreds of millions of shekels.
According to Federman, such an annulment would lead to a drop in the number of tourists coming to Israel, and even those wishing to visit the holy sites in Israel may prefer to come for a one-day visit rather than staying overnight.
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