The COVID-19 pandemic has hit the hotel industry in Israel hard. During the September-October Jewish holidays, one of the peak times for tourists from around the world, as well as local Israelis taking vacations, Israel was under its second lockdown, and all hotels were closed.
Over the summer, which is another peak tourism time, hotels were able to open to Israeli tourists. Israelis like to feel they are getting good value, and the hotels that did open had to cut prices or throw in extras like meals and entry to tourist attractions. August was a good month, and many hotels thought they would be able to recoup the year’s profits, until a second lockdown was imposed.
Two key tourist areas, the Dead Sea and Eilat, are expected to open to Israeli tourists soon, dependent on negative coronavirus tests. But dozens of Israeli hotels are shuttered – and an estimated 25% of all hotels may not reopen.
At least some entrepreneurs are preparing to open new hotels and Ronit Copeland, the managing director of Copeland Hospitality, is helping them.
“Some stuff was frozen during corona, but smart people are saying, ‘Let’s do all the planning now.’ It’s not that much of an investment. So there is a lot of development on the side of the planning stages.” Copeland helps her clients develop their hotel concept from beginning to end. What kind of hotel do the entrepreneurs envision? Will there be restaurants and bars, and will they be open to the public? What about a gym? What is the business plan for making money? What is the social media strategy?
Copeland sees hotels as a long-term investment that should begin to pay back after six or seven years. But she says they also require frequent renovation, which eats into the profits.
Israel has a lot of fancy, expensive hotels based on a mistaken impression, she argues. “There is this idea that American tourists want very upscale hotels and it’s just not true,” she says.
In fact, hotels such as the Waldorf Astoria in Jerusalem or the Ritz Carlton in Herzliya want their hotel prices to be high so they can sell the residential units that are part of the hotel for more profit.
Copeland’s personal history reflects the diversity of the hotels she is involved with. She was born in Israel to a Mexican mother and Cuban father, although her grandparents were from eastern Europe. Her grandparents ended up in Cuba, she said, because it was the closest to the US he could get. After the 1959 Fidel Castro Revolution, her father moved to Mexico.
She grew up speaking Spanish at home, and she was born in Israel. But a few years later her family moved again to Puerto Rico, among a close-knit Jewish community which today numbers about 2000 families.
She was active in Young Judea, where she met her husband, Scott Copeland, when she was 17. Both went to college in the Boston area, and at 23, married, they made aliyah. She said that at age 18 she went to the Israeli draft board hoping to be drafted, but because she didn’t speak Hebrew, they did not accept her.
She worked for several hotel chains including the Hyatt, the Hilton, and spent most of her career with Sheraton Hotels, rising to the level of VP of marketing. Ten years ago, she said, at the age of 45, she opened her own firm to advise hotels.
“I had a dream to help developers open boutique and lifestyle hotels,” she says.
She has helped open a series of hotels that cater to both tourists and business travelers. Many people, she says, prefer to patronize smaller boutique hotels where they can feel part of a neighborhood, rather than large chain hotels.
“They want to be more in the neighborhoods,” she says. “They want to go to the coffee shop next door. They want to buy a baguette at the makolet (local grocery store). They want to get a newspaper at the kiosk. They want to live like the locals a little when they come and do business, but they still want all of the business amenities.” Copeland is also active overseas, with projects in Germany and Hungary. In Germany she is currently working on a project for a hotel that was slated to become a youth hostel but decided to go a little more upscale. She said the government in Germany has handled the economic crisis of the pandemic better than in Israel, paying employers so that they can keep their workers on staff, at least part time.
Back in Israel, it is not all bad news. The agreement between Israel and the UAE has the potential to bring tens of thousands of tourists to Israel each year, with dozens of weekly flights expected between Israel and Abu Dhabi. Christian pilgrims are also likely to return as soon as corona makes that possible, although most likely not before the spring.
Israel faces some unique obstacles in the hotel industry, Copeland says.
“Even before corona, the Health Ministry used to give us a really hard time,” she says. “There is a dark cloud of hoteliers really frustrated and not motivated because of not enough support, and there are new costs because of new protective wear and regulations because of corona.” There are also “corona hotels” for both those who have been infected with the disease and those coming from abroad who need to quarantine. The quarantine requirement has recently been reduced from 14 to 12 days. These hotels are run by the Ministry of Defense, which provide the “guests” with army food.
Looking forward, Copeland believes the future of the hotel industry lies in boutique hotels, including in areas outside Jerusalem and Tel Aviv, such as the Galilee and the Golan Heights.
While becoming a “corona hotel” is a good source of quick money for cash-strapped hotels, Copeland warns that this strategy could backfire.
“I think that there are huge implications in terms of reputation and image,” she says. “My strong recommendation is that even though it would bring money in the short-term, if you are a company with a lot of hotels, and you can survive anyway, and you have some reserves, then I wouldn’t do it.”