Tender for cheap hotel chain in Israel fails

In February, the Knesset gave initial approval to Levin's proposal to add 15,000 new hotel rooms withn five years, and side-step irksome building regulation to help in the process.

July 19, 2016 18:22
1 minute read.
The Margosa hotel in Jaffa

The Margosa hotel in Jaffa. (photo credit: PR)


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In a setback to bringing down high lodging costs for tourists and business people, a Tourism Ministry tender to build a chain of inexpensive hotels failed to attract a single bid.

The tender, the failure of which was first reported by Army Radio and later confirmed by The Jerusalem Post, would have allowed a company to buy plots of land in Eilat, the Dead Sea, Kiryat Gat, Mitzpe Ramon and Nazareth.

It specifically required that the five new hotels offer inexpensive prices catering to budget tourists seeking two- to threestar accommodations.

The Tourism Ministry said the failure highlighted the need for broader-based reforms, which it said Tourism Minister Yariv Levin was pursuing.

Among the reforms, said a ministry spokeswoman, were plans “to increase economic viability that includes an increased grant allocation of 33 percent of the cost of building budget hotels, that was approved by the government two weeks ago, and the proposal that will allow entrepreneurs who are building hotels to receive an additional 20% building rights for residential purposes in the project.”

Last month, the ministry also announced plans to reduce regulatory burden on hotels, giving them more leeway in labor laws for staff who work nights.

In February, the Knesset gave initial approval to Levin’s proposal to add 15,000 new hotel rooms within five years, and sidestep irksome building regulation to help in the process.

In the previous decade, only 3,000 new rooms were added, even as tourism steadily increased. As a result, overnight accommodation prices soared roughly 70%.

According to Army Radio, the Israel Lands Authority plans to examine what went wrong alongside the Tourism Ministry, and consider how to put forth the failed tender more effectively.

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