inbal hotel room298 88.
(photo credit: www.inbal-hotel.co.il)
Israel urgently needs 19,000 new hotel rooms if it wants to meet the
government’s goal of bringing in five million tourists to the country by 2015,
Tourism Minister Stas Meseznikov said Wednesday at a tourism investors
conference in Tel Aviv.
“To avoid the loss of tourists, which means the
loss of income and the loss of jobs, the Tourism Ministry’s investment budget
for the next two years has to grow to NIS 1.1 billion,” he said.
participants heard addresses by Meseznikov and leading hoteliers.
independent report analyzed the need for new hotels and the ways in which the
government could help.
“We are witness to a worrying phenomenon: While
the demand for tourism and business visits in Israel is climbing and reaching
previously unseen figures, during some seasons of the year we are incapable of
meeting the demand and are in effect forced to reject the same tourists we
encouraged to visit Israel,” Meseznikov said.
“At the same time, our
neighbors, who compete with us for the hearts of tourists visiting the region,
are attracting the largest and most lucrative hotel chains and every year are
increasing the supply of hotel rooms.”
According to the Tourism Ministry,
there are currently 44,000 hotel rooms in the country, which have a 65 percent
However, they will not be enough to support continued
growth in tourism numbers, especially during peak seasons, the ministry
According to research conducted by Rotem Strategy, the 19,000
needed rooms would cost NIS 10.2 billion and would have to be financed by
private investors, government grants and lenders.
investors, however, that may not be enough. David Fattal, owner and CEO of the
Fattal hotel chain, said entrepreneurs faced difficulties when embarking on a
hotel venture in Israel.
“The major obstacle entrepreneurs face in Israel
is that it is simply unprofitable to build a hotel here,” he said.
are a lot of people and companies who would gladly build here if they thought
they could profit.
But with high land prices, diminishing government
grants, incomparably high expenses on energy water and labor… it’s just not
“In the last 20 years, apart from small boutique hotels in Tel
Aviv and one or two projects in Jerusalem, there have been zero new
developments,” Fatal said. “Israelis prefer to invest in hotels in Europe.”