Gov’t to Encourage Construction of Discount Hotels

The Israel Lands Administration has issued the country’s first tender for construction of moderately-priced hotels. The tenders for the construction of five hotels in Eilat, Nazareth, the Dead Sea, Mitzpeh Ramon and Kiryat Gat will be awarded to bidders who agree to build “popularly priced” hotel rooms.

Tourists from around the world have noted that Israeli hotel rooms tend to be at the higher end of the price spectrum, with many hotels charging five-star rates for what many patrons consider to be far lower quality rooms. The hotel industry does not deny this, but blames it on a range of issues it says are unique to Israel, including increased security, high property taxes, excessive regulation, kashrus costs, etc. However, the Tourism Ministry has noted that there are many international chains that run hotels that are much more reasonably priced in locations where expenses are even higher than in Israel, and the Ministry, working with the ILA, is hoping to attract one of those chains to locate in Israel.

The tender winners will be required to build hotels that contain at least 100 rooms that are reasonably priced and fulfill the requirements of the Ministry for such rooms. They will also be required to commit to maintaining those prices for at least five years. Preference will be given to bidders prepared to build entire properties that fulfill the criteria.

Tourism Minister Yariv Levin said the project “will provide Israelis and visitors with the opportunity to take more reasonably priced vacations in Israel.”