Shalom Israel: hotel market set to grow in 2019

by | Jan 8, 2019 | News

2019 is going to be a good year for the Israeli tourism and hospitality market, if current reports and numbers are anything to go by. Industry professionals gathered in Tel Aviv recently to attend the Israel Hotel Investment Summit, where the potential for development and investment in this unsung region of the Mediterranean was discussed. We find out more.

Soaring demand for new hotels

Anyone looking to invest in the Mediterranean could do well to take a peek into what is happening in Israel. The country’s tourism market is thriving, with over 4 million people visiting the country in 2018, according to estimates

These travelers need somewhere to stay, and currently there is not enough supply to meet the demand, with many travelers opting to stay in Airbnb because of a lack of hotels in the mid and lower price ranges.

There is also scope for the development at the upper end of the scale, as much of the existing hotel infrastructure is ageing and outdated, meaning there is potential to restore or renovate these properties.

International brand potential

Tel Aviv is an attractive destination for tourists, but also for big name hotel brands that want to capture a piece of the market that is set to grow in Israel. The revenue per available room (REVPar) in Israel is stable and high, and Tel Aviv and Jerusalem are now counted among their European counterparts as desirable destinations that have high occupancy rates.

International hotel groups and brands such as Hilton, Marriott, Accor and Radisson already have a presence in the area, but they are showing interest in leasing as opposed to franchise agreements, with a particular focus on Jerusalem.

Regional and market considerations

Investing in Israel comes with its own particular set of considerations, complications and opportunities. Tel Aviv, and Israel in general, is a very tech-savvy and innovative market, with lots of start-ups and tech entrepreneurs based in the area and conducting business that will attract a certain type of traveler, one that may tend to prefer a lifestyle hotel to the more traditional models.

Security considerations will always be an issue when developing any hotel, as will culinary and religious factors when considering food and beverages, as well as operations on the Sabbath.

Getting loans for development can also be tricky, and navigating Israel’s regulatory landscape can take time and practice. In all cases, it is best to partner with experienced locals when developing a hotel project in Israel, delegates at the conference discussed.

Let’s take a look at a few other projects currently underway in Israel:

Nyx Jerusalem Hotel

Isrotel Royal Garden

David Hotel Kempinski

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