Unsurprisingly, a large portion of the economy in Eilat is tourist-based: the accommodations services, the dining and the entertainment industries are very well-developed in the city and attract a lot of entrepreneurs and investors, both local and from abroad. The constant presence of tourists has also given a boost to the local shopping industries.
Another attractive economical feature of Eilat is that in the mid 1980s, the VAT (value added tax) in the city was cancelled, to encourage Israeli citizens to settle here as permanent residents. As a result, everything sold in the city is a bit cheaper than it is in the rest of the country. This encourages many Israelis, who come down here for a weekend off, to do some concentrated shopping as well.