Five new hotels are in the pipeline and existing ones are expanding. The town has even extended the opening hours of the Church of the Nativity, revered by Christians worldwide as the place of Jesus’ birth.
Relative peace and prosperity
But even after three years of relative peace and prosperity, people are still nervous in the small Palestinian town, a few miles south of Jerusalem in the Israeli-occupied West Bank.
So dependent has Bethlehem become on tourist income that an upsurge of violence anywhere in the volatile Middle East - not just in its near vicinity - spells financial disaster, with nervous tour groups prone to cancelling months ahead.
Sitting in his municipality office overlooking the newly lit Christmas tree in Manger Square, Mayor Anton Salman said Bethlehem looked set to improve upon the 1.5 million visitors it received last year.
Better than 2018
"Since three years (ago), things are going up, this year is better than 2018 and 2018 was better than 2017 and it is a continuous increase in the number of tourists who are coming to the city," Salman told Reuters.
Church's opening hours extended
For the first time this year the authorities extended the church's opening hours from sunset to 8 pm, Salman said, and in 2020 they plan to enlarge the town’s coach station and to address heavy congestion on the narrow road to Manger Square.
They will even consider asking tourist groups to register in advance in future. "If the number will be high and the church can’t receive all of them we need to look for other plans that can be helpful," he said.
Ghosts of Christmas past
This year townsfolk are abuzz about a new attraction a wooden relic reputed to be from the manger used by the infant Jesus and sent back last week to Bethlehem from Rome.
But the town remains wary. Bethlehem enjoyed good times until the outbreak of the second Palestinian uprising in 2000, which saw years of mutual blood-letting between Israelis and Palestinians, leading tourism to collapse.
Most visibly Israel's high concrete wall that towers over the northern entrance to Bethlehem, and separates it from Jerusalem.
Palestinians call Israel's military barrier a land grab. Israel says the cordon of fences, ditches and walls has drastically reduced attacks on its citizens.
Business has been booming
The manager of the Alexander Hotel in Bethlehem, Joey Canavati, said his family had nearly given up on the town during the lean years, but now had bookings through to 2021. The hotel plans to nearly double in size from 58 to 110 rooms.
"Business has been booming, we have never seen it like this ever before," he said. "(With) the number of tourists that have been coming in this year we have a huge lack of rooms here in Bethlehem."
But he added a familiar note of caution: "It's always about stability."