'Rebuilding Dead Sea hotels will cost double the estimate'

Israel Hotel Association releases a new study as possibilities are investigated s a solution for rising water levels in the southern part of the sea.

By RON FRIEDMAN
October 8, 2010 05:57
4 minute read.
The southern city of Eilat.

Eilat 311. (photo credit: Associated Press)

 
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With the decision on the fate of the Dead Sea hotels only weeks away, the Israel Hotel Association released a new study on Wednesday claiming that the cost of moving the hotels could be double the amount previously estimated.

Tearing down the beachfront hotels and relocating them further inland is one of three possibilities currently being investigated by the state as a solution for rising water levels in the southern part of the sea caused by long-term industrial activity. The higher water levels threaten to crumble the foundations of the hotels that serve as the backbone of the region’s spa tourism industry.

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The rising water levels in the part of the sea known as Lake Number Five is caused by 20 centimeters of salt accumulation per year, a result of the chemical extraction processes that local industries employ.

The study, conducted on behalf of the association by Itai Eigis, chairman and CEO of a consulting firm and a former director-general of the Tourism Ministry, found that the cost to the national economy of relocating the hotels was likely to reach NIS 6 billion, more than double the NIS 2.8b. estimated by the Dead Sea Preservation Government Company (DSPGC), a company that was specially formed in 2008 to come up with solutions to the rising sea level and lead the eventual planning and execution.

“The DSPGC calculated only the actual engineering costs of tearing down and relocating the hotels; they didn’t look at how the move would influence tourist behavior and its effect on the economy,” said Eigis.

Eigis said that his company’s research looked at things like loss of income from nightly stays both in the hotels that would be torn down as well as in the remaining hotels that would effectively be operating in a massive construction zone; the loss of income from tourists who would forgo Israel altogether in favor of vacations on the Jordanian coast, and the losses experienced in the period of gradual rebound after the hotels were rebuilt.

“It is important to note that our study calculated only the losses to the national economy as a whole, not to the hoteliers themselves. Tourists who would replace their vacations in the Dead Sea with vacations in Eilat, for example, are not included, because their money still goes into the national economy,” said Eigis.



Relocating the hotels is only one of three options currently under investigation by the DSPGC. The other alternatives are building a barrier that will create a maintainable lagoon abutting the coastline or carrying out “full harvests” in which all of the accumulated salts are removed from the seabed.

The other options are estimated to cost NIS 5b. and NIS 7b. respectively.

“Our study did not investigate the likely additional costs of lost tourism as a result of the other options, but we believe them to be relatively negligible,” said Eigis.

According to Avi Eitam, the engineer for the Tamar Regional Council, the local authority on whose land the hotels are built, said the DSPGC also underestimated the amount of time it would take for the hotels to be torn down and rebuilt. He estimated the move would take roughly 14 years, not eight years as estimated by the DSPGC.

“The Dead Sea hotel industry brings pride and honor to Israel and much-needed jobs to the unemployment-ridden region. From an economic perspective, we are talking about a total distortion of the figures and a misrepresentation of the truth,” said Israel Hotel Association president Eli Gonen.

“I call on the ministers of tourism and finance to dismiss this absurd proposal to destroy the Dead Sea hotels and conduct a serious and professional debate about the two engineering solutions that relate to the Dead Sea water levels.”

Tourism Ministry Director- General Noaz Bar-Nir told The Jerusalem Post that DSPGC experts had received the study findings and were analyzing them carefully, but had yet to reach any definite conclusions.

“On the face of it, some of the numbers don’t seem logical, but we are not ruling anything out. If we see that there is a substantial influence on the cost of any of the options, it will be taken into account.

Our experts are carefully analyzing the pros and cons of each of the options and hope to have the facts presented to the minister by the middle of November,” he said.

“For us, as the Tourism Ministry, protecting the hotels and the tourism operators is a high priority and we might give it more emphasis than others, but a final decision has yet to be reached,” said Bar-Nir. “In the meantime, there are a lot of forces pushing in different directions here and a lot of interests at stake. It is worthwhile to take everything that is said about this move with a grain of salt.”

Adding another dimension to the controversy, a deal is currently in the works between the government and Israel Chemicals, the company that operates the Dead Sea Works enterprise causing the salt accumulation.


According to Haaretz, government officials are considering a compromise with Israel Chemicals: if the company takes action to save the hotels at the Dead Sea, the state will settle for a smaller share of its revenues from mining and selling minerals.

The total payment for the work is meant to be split between the state, Israel Chemicals, the hotels and the regional council.

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