Tourism Ministry to subsidize hotel development outside cities

The new priority map now involves most areas of the country, excluding Tel Aviv and Herzliya proper – a fact that irked certain Knesset members.

September 8, 2016 03:55
2 minute read.

General view of Eilat resorts. (photo credit: WIKIMEDIA COMMONS/HENRIK SENDELBACH)

As part the Tourism Ministry’s initiative to decrease costs of vacationing in Israel and boost hotel room availability, the Knesset Finance Committee approved a priority map for the industry on Tuesday.

The priority map aims to increase the supply of hotel rooms in new areas of the country through government grants, particularly supporting tourism projects operating in the periphery of large cities and close to Ben-Gurion Airport, a statement from the ministry said.

Proposed in a Tourism Ministry order, the program also calls for more budget hotel and hostel options, hoping to catalyze price reductions in the tourism industry.

“This is another important step in reducing the cost of vacationing in Israel and increasing the hotel room supply,” said Tourism Minister Yariv Levin.

“Expanding the map will facilitate higher grants for building hotels in the new areas and will lead to a wider range of hotel rooms and the creation of many more jobs throughout Israel.”

Levin credited Finance Committee chairman Moshe Gafni (United Torah Judaism) for approving the ministry’s order to expand the national tourism priority area.

The order to expand the map stipulates that tourism sector entrepreneurs within the newly defined priority area are entitled to grants of up to 20 percent of their total investment, the ministry said. The approval of this benefit comes just a few weeks after the government authorized another proposal by Levin to provide 33 percent in financial support for investments in building budget hotels within the same priority areas.

The total annual budget for grants currently stands at NIS 200 million, the ministry said.

The new priority map now involves most areas of the country, excluding Tel Aviv and Herzliya proper – a fact that irked certain Knesset members.

At the Finance Committee meeting, MK Stav Shaffir (Zionist Union) questioned why Tel Aviv must be excluded across the board, without considering “disadvantaged neighborhoods in it that are no less peripheral than farther areas.”

“If you want to prioritize geographically remote regions it’s alright – prioritize these areas with higher grants; but it’s not right to completely exclude Tel Aviv,” she said.

“When there are no inexpensive hotels, tourists go to Airbnb, which means there are fewer apartments to rent,” Shaffir continued. “Moreover, tourists from abroad rely primarily on public transportation, and the current order encourages tourism entrepreneurs in cities like Hadera, Rehovot and remote areas in which there is no good and available public transportation, so you may not achieve the objective of encouraging enterprises for tourists looking for inexpensive hotels.”

At the end of the discussion, although Gafni stressed that he supports the idea of helping distressed neighborhoods in Tel Aviv, he said that in this city, “the overall situation is much better and it is wrong to diminish more remote places in favor of Tel Aviv.”

“I support the order in the hope that more inexpensive hotels will develop and that there will be an increase in the number of hotels in Israel, which will lead to a decrease in lodging prices,” Gafni said.

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