ANT KATZ

Israeli tourism booming 

“The option of establishing a budget hotel chain in various locations around Israel will encourage international hotel chains to invest and build in the country,” said Tourism Minister Yariv Levin this week. This government intervention is aimed at adding to the supply of budget-priced hotel rooms. A shortage of cheaper lodging options has hindered visits by families and students and, generally, the opportunity to stay in Israel for longer periods.

Adiel Shomron, Acting Director, Israel Land Authority, added: “This is the first time that we are marketing land in one bundle without fixing a minimum price in order to allow one entrepreneur to win and build five budget hotels to internationally-recognised standards,” aimed at families and student travellers at an affordable price.

The tender is the first of its type and is in keeping with the Tourism Ministry’s policy to lower the price of holidaying in Israel by, among others, increasing the supply of budget hotel rooms and creating competition in the hospitality market.

RIGHT: Tel Aviv’s beachfront

The tender is also in line with a worldwide trend in the hotel industry, in which international chains (such as for example Hilton and Carlton) establish budget brands. There are hundreds of budget hotel brands worldwide, and the ministry hopes that the tender will generate international interest in entering the Israeli market.

The hotels will be built in the following areas:

• Eilat – 150 rooms in the centre of the city (Mafiya district)
• Mizpe Ramon – 100 rooms in the Spice Quarter
• Dead Sea – 300 rooms in Ein Bokek
• Kiryat Gat – 100 rooms near the northern entrance to the city
• Nazareth – 200 rooms near the northern entrance to the city

The tender is only applicable to entrepreneurs who obtain a recommendation from the Tourism Ministry. First, the winning company will sign a five-year contract for the development of five hotels, and following this, lease agreements will be signed for 49 years.

Planning and construction of the hotels will be carried out in accordance with the physical standards for planning and classification of tourist accommodation facilities of the Tourism Ministry.

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Flexibility

The entrepreneur will have flexibility regarding the mix of room types (double, suite, studio) in every hotel up to a maximum of 40 per cent of total hotel rooms for studios and suites.

This, instead of the 20 per cent as defined in the physical standards.

“According to the Tourism Ministry, the benefits in building a budget hotel chain at one time, as opposed to building an individual hotel are, among others: reduced building costs, reduced subcontracting costs and reduced marketing costs. These will all lead to lower prices. Another advantage is for the tourist to extend his stay in the country, with a package that includes several hotels together throughout Israel,” says Lydia Weitzman, an adviser to the Ministry of Tourism.