Tourism Ministry earmarks $50 million for new hotels as visitors return

Asoka Elon

As incoming tourism slowly picks up, the Israeli Ministry of Tourism has earmarked NIS 165 million ($49 million) in grants to support plans for the establishment of new hotels across Israel or the expansion of existing ones.

According to a government announcement Thursday, the ministry is processing over 100 requests from entrepreneurs and businesspeople to build, restore, or repurpose existing buildings into new lodgings and accommodations.

The ministry did not indicate how many rooms these new or restored hotels would add to the total, nor how many additional people could, theoretically, be accommodated.

Tourism Minister Yoel Razvozov said there was a “great deal of optimism” in the tourism industry as visitors and travelers make their way back to Israel after two years of pandemic-related restrictions.

Razvozov said the 107 applications in a single year was a new “record.”

He said the ministry would continue to invest “vast efforts in increasing incoming tourism traffic to Israel and shortening the amount of time it takes to build hotels. This will inject billions of shekels into the state coffers.”

The empty sundeck at the Mamilla Hotel. (Courtesy: Mamilla Hotel)

Tourism to Israel peaked in 2019 when the country saw a record number of 4.9 million entries, of which 4.6 million were tourists who stayed at least one night, according to government data published in early 2020. Tourism activity in 2019 brought in about $7 billion to the economy that year.

Once the COVID-19 crisis began and lockdowns were imposed, visitor numbers plummeted and businesses were battered as tour guides struggled to adapt for a long time. As recently as six months ago, tour guides across the country who had been living off a mix of government grants, unemployment benefits that dried up last summer, savings, and occasional odd jobs, were being told to retrain for other professions.

But inbound tourism has been bouncing back slowly. In the first five months of 2022, about 785,000 foreign tourists entered Israel, up from about 400,000 in all of 2021, according to new data.

Israel has had a long-standing goal of welcoming about 10 million tourists a year.

This goal is only achievable if the number of hotel rooms increases substantially, particularly in Tel Aviv and Jerusalem.

This year has already seen the opening of the David Kempinski in Tel Aviv, setting new standards for high-end accommodation and facilities. Two new hotels by Fattal are on their way for Jerusalem, as well as a project by Accor.

By the end of 2023, 25 new hotels across Israel are scheduled to open their doors.

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