Amid construction boom, Israeli hotel industry is optimistic about 2022 (with video)
Isrotel hotel chain to invest $ 1 billion in new construction, as industry hopes for recovery in spring
After two years of low occupancy rates due to the pandemic, executives in Israel’s hotel industry are optimistic that the coming year will see a setback.
Hotel construction is at its highest level in five years, the Association of Real Estate Appraisers in Israel revealed earlier this week in a report based on data extracted from the country’s Central Bureau of Statistics. According to the report, in the first three quarters of 2021, hotel construction began on about 1.5 million square feet of real estate, up from 505,000 square feet a year earlier.
The majority of the new construction takes place in Tel Aviv, famous for its beaches, nightlife and sunny weather. Hotels in the coastal city, heavily dependent on inbound tourism, have been among the hardest hit by COVID-19 travel restrictions.
Despite these difficulties, Nahum Kara, sales and marketing director of the Isrotel hotel chain, believes that tourists will return in greater numbers than before the pandemic in the coming year, especially as Israel has reopened its borders once again.
“To create real tourism, it takes about six months; it’s for group business [travelers]”Kara told The Media Line.” Individual tourists are more adventurous and they come earlier. “
“Hopefully we will continue to open the borders and at Passover this year we will be full again,” he added.
The Isrotel hotel chain, which currently owns 20 properties across the country, is investing $ 1 billion, or shekels 3 billion, to purchase or build 12 more hotels in Israel over the next five years, eight of them nothing. than in Tel Aviv.
In 2022, Isrotel plans to open three new hotels: one near the Sea of Galilee, called Goma Hotel, and two more in Tel Aviv, called Port Tower Hotel and Alberto Hotel.
“We have two new hotels in Tel Aviv that we will be opening in May and June,” Kara said. “The first is at the entrance to Tel Aviv Port, which is the city’s entertainment district, and the second is in the Tel Aviv business center. This is a boutique hotel with 92 rooms and a rooftop swimming pool.
Kara and others in the hospitality industry are hoping for a strong recovery in tourism, which they deem inevitable once the situation with the pandemic improves. In 2019, a record 4.5 million people visited the Holy Land.
Hotels that depend on inbound tourism, such as the five-star Royal Beach Hotel owned by Isrotel in Tel Aviv, have been particularly affected by COVID-19. Nevertheless, according to Kara, the hotel chain came out relatively unscathed thanks to its diverse real estate portfolio.
“We have a mix of locations,” he said. “Most of our business is local Israeli business. We have not suffered so much, but in particular the hotels in Tel Aviv and Jerusalem have suffered a lot.
Once Isrotel launches its eight hotels in Tel Aviv, it will own around 20% of all rooms in the city.
The decision to build several new hotels was taken several years ago.
“To build a hotel – from the moment he decides to build it, it takes in this country between 4 and 10 years,” said Kara. “So the decisions were made well in advance. Now we are at the last step.
Other players in the hotel sector are also confident in the future.
The Margoa Hotel, a three-star boutique hotel in the nearby coastal town of Netanya, is preparing to fill its rooms in April.
“We are very optimistic because we will overcome this COVID situation,” Richard Ammar, head of marketing and reservations at the Margoa hotel, told The Media Line. “We believe in it. I think it’s a matter of a month or two and then we’ll get all the bookings from the people we’ve missed for the past two years.
As real estate companies continue to bank on a strong recovery in the hotel industry, the return of bookings to pre-pandemic levels this year will only become clear in the months to come.