Hotel occupancy rates in northern Israel dropped from 56.3% to 29.4% in July because of the conflict with Lebanon, according to the country's Central Bureau of Statistics.
Separate statistics for Haifa, 20 miles south of the Lebanese border, show hotels have been affected slightly less, because of the influx of journalists. Year-on-year occupancy figures for July were down from 71.6% to 53%.
A spokeswoman for the Israel Hotel Association said: "The picture is not good because there have been lots of cancellations. The media isn't showing that life in Israel is now back to normal because it prefers to show blood."
The emerging Lebanese tourist economy has also been hit by the fighting. Read an in-depth report here.