Turning historic buildings into hotels – the Jerusalem challenge 

Investors in Jerusalem must be very persistent to fulfil their dream, as getting things done in the city is indeed a challenge.

 A FUTURE LUXURY hotel in the house of Ethiopian Empress Taytu Batul in central Jerusalem (photo credit: RENDERING BY FEIGIN ARCHITECTS)
A FUTURE LUXURY hotel in the house of Ethiopian Empress Taytu Batul in central Jerusalem

The idea of taking heritage buildings through a rejuvenation process, meticulous restoration and renovation and transforming them into luxury hotels, has been an ongoing trend in the hospitality industry across the spectrum.

Around the world, many buildings that once functioned as hotels, upscaled houses, offices, banks or railway stations are being revived and intertwined with glorious contemporary designs.

The trend of turning old buildings in Tel Aviv into boutique hotels remains one of the brightest spots in the hospitality industry in the White City. 

Travelers seeking modern-day accommodations linked to a bygone era are being offered a unique and rewarding Tel Aviv experience. In recent years, hotels that are willing to adapt are enticing a growing legion of wealthy tourists. They are attracted to the elegant historical charm and local character these boutique hotels possess. It also allows colorful hotel owners to effectively differentiate themselves in an increasingly competitive environment.

This month, the rehabilitated 44-room Elkonin, reconstructed out of Tel Aviv’s first-ever built hotel in the 1910s on Lilienblum Street, was inaugurated, bringing a unique French sophistication and boutique flavor to the city. 

 THE WALDORF Astoria Jerusalem, built on the foundations of the Palace Hotel (credit: FLASH90) THE WALDORF Astoria Jerusalem, built on the foundations of the Palace Hotel (credit: FLASH90)

The Elkonin joins numerous reborn hotels with their own story. The award-winning Norman on Nachmani Street, the Hotel Montefiore with its eclectic architecture style, the 1866-established Drisco in the center of the picturesque American-German colony and many more.

Tel Aviv or Jerusalem?

Tel Aviv is definitely great at positioning and marketing its rejuvenated boutique hotels. Jerusalem, one of the oldest cities on the globe with its remarkable buildings, is sitting in the corner. Naturally two hotels stand out – the Waldorf Astoria, built on the foundation of the Palace Hotel, and the Orient, with its renovated Templar structures transformed into suites.

Additional small hotels, preserving pieces of the city’s culture and history, can also be found. The small boutique Villa Brown, set in a restored 19th-century villa in central Jerusalem, is a good example. Nevertheless, revitalization challenges are endless.

“Tel Aviv was always better than Jerusalem as far as public relations,” says Avi Ralbag, hotels adviser to the Jerusalem Development Authority. “Tel Aviv boutique hotels are much smaller in scale, and for an entrepreneur it is relatively easy to fulfill their dream. Protected families have resided in Jerusalem’s old buildings under key-money agreements for generations since Ottoman and British rule. Investors are challenged by this obstacle, which is less crucial in Tel Aviv, a much younger city. 

“In addition most of the potential heritage buildings that are a good option for... hotels are manned by government offices. This may be changed when the new government district compound is inaugurated at the city entrance.”

Also, in central Jerusalem, substantial buildings are owned by ultra-Orthodox families, and they will most likely become yeshivot or Talmud Torah primary schools, Ralbag says. 

“The magnificent 19th-century Bikur Cholim Hospital buildings in downtown Jerusalem were sold seven years ago by businessman Arcadi Gaydamak to a real estate company. What will it be? A nursing home? Time will tell.”

Former chief municipal engineer Shlomo Eshkol says investors in Jerusalem must be very persistent to fulfil their dream, as getting things done in the city is indeed a challenge.

“Numerous Christian denominations own hundreds of acres of valuable land in downtown Jerusalem. This land issue deters them,” he says. “The temptation to turn the project into a residential zone is also more attractive in a city that needs urgent housing solutions to its growing ultra-Orthodox population. Toronto developers turned the amazing historical building of the Schneller Orphanage compound into luxury housing for haredim.” 

Another significant obstacle is the building materials, he says. Jerusalem structures are made of stone, and old buildings are less friendly for architectural modifications. Tel Aviv houses are made of a mixture of bricks and concrete, which is easier to handle when planning renovations for small-scale boutique hotels.

INVESTORS LOVE Jerusalem and they want to take part in this process. They all share an exciting story. 

“It all began when we heard that Israel Radio was pulling out of its location in an unfamiliar historical building in central Jerusalem, and the Ethiopian and Anglican churches were issuing a tender for the building,” reveals Eliaz Gabai, a developer and the CEO of Yvel, an Israeli luxury jewelry brand. 

“We were curious to see what it was about. The evacuated building was Ethiopian Empress Taytu Batul’s, the wife of Emperor Menelik II, erected for the Ethiopian community in 1903. This is the most exciting place I have seen in downtown Jerusalem. An amazing resort. I felt we could make history by turning the building and its yards into a 120-room heritage hotel.”

Gabai says that with additional building rights and the ongoing support of the city, they will make it happen within four to five years. 

“Managed by a renowned international luxury hotel brand, for me this will be a once-in-a-lifetime contribution to the capital,” he says.

The current Jerusalem building boom is similar to the developments of King David, says Sharon Dinur, head of the Preservation Department in the Jerusalem Municipality. In the last decade neglected old buildings are getting the proper attention they deserve.

“The challenges are certainly there,” she says. “In Tel Aviv, renovating heritage buildings to turn them into boutique hotels is quite straightforward, while in Jerusalem, similar projects are bigger and require additional building rights requests by developers. The municipality encourages the initiatives for new hotels in historical buildings, bringing many disused structures back to life. 

The alternative would be using taxpayers’ money for the preservations. We make sure these developers will be committed to allow the public to enjoy the hotels through their public areas. We do not wish these hotels to be for the use of the rich only,” she says.

David Kroyanker, an architectural historian of Jerusalem is very optimistic.

“Indeed turning historical buildings into hotels in Jerusalem is a matter of initiation by private entrepreneurship intended to generate income from the project, supported by receiving building rights for an adjacent modern structure,” he says. “I believe without a doubt that if an investor will offer to purchase the breathtaking 1917-built Italian Hospital, which currently serves as part of the Education Ministry in Jerusalem, the person will get it. With the right financial proposal and with the assistance of the municipality, a beautiful building can become a hotel.”

Kroyanker’s optimism is indeed encouraging. However as a matter of fact, the Orient, inaugurated six years ago, was the last heritage-preserving hotel with additional building rights in the city. Some may point to the 2019 re-opened Lady Stern hotel, originally built in 1906. However the structure with its adjacent building is almost 25 years old, previously operated by a different brand. 

Numerous projects are taking place and hotel openings involving constructions with additional floors or buildings are to be expected. Even with the glatt kosher-quality food restrictions, the uncertain political environment and the security obstacles Jerusalem is so identified with, entrepreneurs are interested.

“Building hotels in the capital, involving new structures and preserving heritage houses takes at least 10 years from the developer’s involvement until the hotel is inaugurated. Hotel entrepreneurs are certainly dreamers as they possess enormous patience to see the return on their investment,” says Ralbag. 

Jerusalem is more than 3,000 years old and it is known for its patience. It seems nobody is in a hurry.

The writer is the Travel Flash Tips publisher.