On Tel Aviv’s once-bustling Dizengoff, business owners lament another casualty of war
After tourism drops by roughly 75% since the Israel-Hamas conflict began in October, vendors say costs are up as sales are down — and they see no bailout on the horizon
Known as one of Tel Aviv’s busiest streets, Dizengoff has grown eerily quiet as store after store closes down and pedestrians can’t help but take notice of the rows of shuttered doors, empty windows, barren shelves and “out of business” signs. The once-packed restaurants lining this main drag are now half-full at best, even at peak times.
During what is typically the height of tourist season, when storefronts should be crowded with people shopping and eating, small business owners are worried.
“The tourists are not coming, and the Israeli people don’t have money to buy anything because they don’t know what’s going to happen tomorrow. This is catastrophic,” said Nirit Aharoni, who has been working at the Shani Kalay jewelry store for six months.
The branch opened on Dizengoff Street just two months before the Hamas atrocities of October 7 catapulted the country into war, and now sits on a stretch surrounded by vacant storefronts.
Vendors say sales have dramatically dropped since the outbreak of the Israel-Hamas War, yet operating costs have rebounded or gotten higher. Many store owners often wait for the busy summer months to make up for losses incurred over the winter, but this year is different.
Some shop owners say they are consistently losing money, with the cost of operating a store now often higher than the money it can bring in.
“Am I worried as a business owner? Yes, very much so. The more days that pass, the more I get stressed out, because I can see that not only am I not making money, but in some months I lose. That has never before been my situation,” said Shalev Shoshan, co-owner of Fiocco Nero, a men’s shoe store on Dizengoff.
46,000 businesses have already closed during the war
Tourism in the first six months of 2024 is down over 75 percent from the year before, with just 501,100 visitors compared to 2.1 million in the same period in 2023, according to the Central Bureau of Statistics. In June this year, 96,500 tourists arrived in Israel; 322,900 came last June.
Israeli commerce will contend with the fallout of the ongoing war through at least the end of the year, with as many as 60,000 businesses expected to shut down before 2025, according to business information company CofaceBDI.
The bleak prediction comes as 46,000 businesses were already forced to close since the war’s outbreak nearly 10 months ago.
“Businesses are coping with a very complex reality,” CofaceBDI CEO Yoel Amir told The Times of Israel last week.
“Fear about an escalation of the war coupled with uncertainty about when the fighting will end, alongside continued challenges such as staff shortages, low demand, growing financing needs, an increase in procurement costs and logistical issues — and most recently the export ban by Turkey — are all making it increasingly difficult for Israeli businesses to survive this period,” he said.
In comparison, a record 76,000 enterprises were forced to shut down in 2020 due to the COVID-19 pandemic, while about 40,000 businesses close in a routine year.
“Nobody gives you any benefits from the war, unlike COVID where you could apply for stuff and get some more money if you were able to show your loss,” said Shoshan. “You can’t now. It’s different conditions and they won’t assist you.”
“Rent isn’t any lower than it was — not rent, not the monthly payment to the city of Tel Aviv, not electricity, not taxes. Nothing is less. If we’re talking government-wise, we don’t see the government controlling the situation or even trying to help,” he said.
The government, which is already under strain from a war that is slated to cost more than NIS 250 billion ($67 billion), has responded by offering a compensation aid package that includes grants to businesses across the country that have suffered indirect damages due to the war, a salary reimbursement program, and relief measures for employees put on unpaid leave.
But in a CofaceBDI survey conducted in January, 52% of managers responded that they received no government assistance or not enough government assistance, despite fulfilling the criteria for compensation. Only 3% said they received satisfactory assistance, the survey found.
‘The iStore is fine… we are not’
Of the businesses forced to close since the beginning of the war, roughly 35,000 — or 77% — are small businesses with up to five employees. These are also the most vulnerable, as they have more immediate financing needs when their operations are hard hit, while they additionally find it harder to raise critical funds for survival, said Amir.
Shop owners on Dizengoff agree that it’s mainly the small businesses that are forced to close.
“The iStore is fine — people always buy phones. We are not fine,” said Shoshan.
Closures on Dizengoff Street due to external circumstances are nothing new. The main street has faced existential issues in the past, including a surge in terrorist gun violence in the last several years.
“Three of the shootings in Tel Aviv were on Dizengoff. People are very afraid,” said Ariel Oronovitch, who opened Ariel Pax Beauty Studio in the months after October 7. “It is always hard. More places have closed during the war than before. It has made it worse — but if you think positive, it’s not going to happen to you.”
Other store owners are not so positive.
“Every third store is empty. You walk down the street, you don’t have to be intelligent — you just have to look to see that people are trying to live like it is normal, but it’s not,” said Aharoni. “If it is going to continue like this, everything is going to close.”
Sharon Wrobel contributed to this report.
