Can backpackers solve Middle East's tourism woes?

An Israeli tourism entrepreneur believes tourism does far more than bring in cash, and has built a top-rated hostel to bring tourists in, particularly the young backpacker crowd.

Where others give PowerPoint presentations about wooing more souls to a storied land, he wears a faded “staff” T-shirt with a button that says, “In fun we trust.” He actively courts travelers who have visited countries at war with Israel, including Syria, Lebanon, Iran, and Iraq, and aims to boost tourism to the whole Middle East one backpacker at a time.

Meet Maoz Inon, Israel’s maverick tourism entrepreneur, whose latest venture was just recognized as one of the top 10 large hostels worldwide.

“I believe tourism is a great tool also to create political change, to create a very big impact,” he says. “Backpackers are the first adopters, so we must target them.”

Mr. Inon’s foray into shoestring travel in Israel began eight years ago in the Old City of Nazareth, one of Israel’s poorest neighborhoods, which was riddled with drugs and not exactly a prime tourist destination – even for the adventurous. But after he and his wife decided to leave their “yuppie lives” in Tel Aviv and spent months backpacking along California’s Pacific Crest Trail and later Patagonia at the tip of South America, they had returned home with a mission.

“I believe the No. 1 beneficiary should be the local community,” he says, having witnessed firsthand the transformative effect of responsible tourism.

He found a gem of an old mansion in Nazareth’s warren of stone alleyways, and turned its soaring arches and tiled ceilings into the Fauzi Azar Inn, named after the Arab family that occupied it until the 1980s. By creating a free map and daily tours of the Old City, as well as co-founding the Jesus Trail that runs from Fauzi’s steps to the shores of the Galilee, he helped create such a demand that six more guesthouses have since opened up in the Old City.

With visitors from places as cosmopolitan as London and far-flung as Mongolia, he says his inn and its clientele are gradually turning perceptions of Nazareth inside out.

“It is raising the self-esteem of the community and creating a psychological change in their mind,” says Inon, who partners with local businesses – including other guesthouses – and organizes home-cooked dinners in a local family’s home for 80 shekels ($22) a head.

“Sustainable business is not about recycling or solar power,” he says. “It’s about being a profitable business.

And he seems to have a knack for spotting such opportunities. The Abraham Hostel, which he opened in 2010 with several other Israeli backpackers, became a top-ranked Israeli hostel before renovations on all 72 rooms were even completed. In February, the annual Hoscars competition named it the 8th best large hostel in the world – the only Israeli hostel to get a mention in any of the four categories.

“I believe backpackers are the foundation of sustainable tourism,” he says. “I see them as the planktons in the ocean that we feed on.”