This month is shaping up to be the country's best month for tourism in a decade, approaching the record set in October 1999 on the eve of the second intifada, with more than 1 million hotel nights.

But the 350,000 tourists are maxing out the capacity of the country's hotels and placing incredible stress on service, which is suffering as a result, industry professionals say.

Open gallery view Tourists in Jerusalem’s Old City. Credit: Daniel Bar-On

Hotel capacity in Jerusalem and Tel Aviv is approaching 90%. Jerusalem hoteliers are begging their peers in the city to take their overflow, since they're subjected to heavy fines if they book rooms for groups they later have no room for. Tour guides and drivers are being sent to sleep at their own homes, not at hotels alongside their groups.

Some tourists are even being sent to sleep in Ashkelon and Be'er Sheva, instead of Tel Aviv and Jerusalem.

This year, Israel will have more than 3.2 million tourists, said Tourism Minister Stas Misezhnikov at the OECD tourism conference in Jerusalem this weekend.

That's 500,000 more than the country got in 2009; now that Israel has joined the OECD, which officially makes it a developed country, it's pulling in more tourists.

"The demand shows that we don't have enough hotel rooms and that we're at maximum capacity in peak tourist season," said Oren Drori, head of the ministry's marketing division.

Israel is seeing an increase in tourism from the United States and Russia, as well as from emerging markets including Brazil, India and South Korea. They include pilgrims as well as people interested in Israel's culture, he said.

The country is planning to build another 9,000 hotel rooms by 2015, said Misezhnikov.

May and October are peak tourist season in Israel.

It's not the quantity of tourists that matters, but who the tourists are, said the director general of the Israel Incoming Tour Operators Association, Ami Etgar.

October tourists rent out more hotel rooms than summer tourists, many of whom are French Jews who own or rent apartments, he said.

The country doesn't have enough infrastructure to handle the amount of tourists here this month, Etgar said.

"The quality of service in October isn't good," he added. "Groups are waiting an hour and a half at Ben-Gurion International Airport, and the Old City of Jerusalem is very crowded."