Hotels: Include us in investment incentives

President of Israel Hotel Association dismayed that exclusion from economic arrangements bill blocks development of tourism industry.

November 18, 2010 05:08
1 minute read.
THE HILTON Hotel in Eilat. More foreigners are vis

Eilat Hilton 311. (photo credit: Courtesy)


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Eli Gonen, president of the Israel Hotel Association, sent a letter to Finance Minister Yuval Steinitz on Wednesday, expressing dismay that his industry had been left out of the economic arrangements bill section on capital investment incentives.

Gonen wrote that despite the tourism industry’s obvious contribution to the economy and the desperate need for additional hotels, the Finance Ministry was blocking development by not including them in the bill.

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“Developing tourism and hotels is a central tenet of the Israeli economy, producing thousands of jobs across the country and creating economic and employment solutions for the periphery. In light of the increase in tourism and the need for more hotels, we demand that tourism be included in the basket of benefits that the government provides investors with. We should learn from our neighbors, who encouraged the building of thousands of hotel rooms and a huge increase in the number of tourists by adopting appropriate incentive plans,” Gonen wrote.

he said that in meetings with Prime Minister Binyamin Netanyahu, the prime minister had agreed with the association’s positions, stressing the importance of tourism to the economy’s development.

In an additional letter to Knesset Finance Committee chairman Moshe Gafni, Gonen wrote that it is absurd that the tourism industry was being left out of the bill and asked Gafni to torpedo the Finance Ministry’s move.

The Finance Ministry spokesman told The Jerusalem Post that Gonen’s claims were completely false.

“It has been clear from the start that the bill referred to industry and not tourism. There has been no reduction to the benefits given to hotels in the capital investments incentive law. Moreover, the budget for this issue was settled in the government between the ministers of finance and tourism. It is important to note that regardless of the benefits given as part of the capital investments incentive law, the hotel industry is subsidized by hundreds of millions of shekels through value added tax exemptions on tourists,” the spokesman said.

Israeli tourism, which is experiencing a record year in terms of incoming tourists, needs thousands of new hotel rooms to meet rising demand.

Hoteliers and tourism professionals say the difficulty in getting loans is keeping investors away.

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