About 200 entrepreneurs attended the first conference of its kind held by the Ministry of Tourism in cooperation with the Tel Aviv-Jaffa Municipality in Tel Aviv, dedicated to a new government directive that offers grants of 10% of the total investment to entrepreneurs converting office buildings in Tel Aviv to hotels. The ministry will allocate NIS 25 million for the directive.

There has been a very significant increase in the number of rooms being converted into hotel rooms: 2015 – 163; 2016 – 198; 2017 – 524 and 2018 – 1088.

Tourism Minister Yariv Levin: “The record levels in incoming tourism provide a business opportunity for entrepreneurs to enter the hotel industry. In recent years, we have spearheaded a series of steps at the Ministry of Tourism in order to simplify planning and building procedures and to increase economic viability. We are seeing a real momentum in hotel construction and I call on other entrepreneurs to join the industry.”

Tourism Ministry Director-General Amir Halevi, who opened the conference, said: “Every year, we break new records in the number of incoming tourists to Israel. This unprecedented success is the direct result of long-term procedures initiated by the ministry and renewed thinking and strategy, specifically suited to the challenges of Israel as a tourism destination. 2018 finished with an all-time record of more than 4.1 million tourists. Apart from the economic benefits to the state and Israel’s positioning as an attractive tourism destination, it is important to understand that we are talking about a new era that brings new challenges. We are ready and prepared to deal with these new challenges.

The tremendous momentum requires us to adjust and to provide tourists with a wide range of accommodation options, which will in turn lead to lower prices. Therefore, together with the Tel Aviv municipality, we are creating a new reality and, for the first time, we are offering grants for entrepreneurs wishing to convert offices to hotels. This is nothing less than a revolutionary process that leverages potential by creating incentives. We at the Ministry of Tourism will continue to promote these changes, reducing regulation and removing barriers so that we can continue to break more records.”

Tel Aviv-Jaffa city engineer Oded Gvuli, said at the conference: “The all-time high in tourism has created a new reality that presents challenges. In a situation where demand outstrips supply, we are ready to act to change regulations and offer grants. As Tel Aviv city engineer, I consider with the utmost importance the issue of permits and conversion of buildings to hotels. These are processes that will have positive impact on the hotel industry and the tourism industry. I call on entrepreneurs to take advantage of the opportunity, submit applications and together we will increase the hotel supply.”

Senior Deputy Director-General, Infrastructure Development and Investments, Tourism Ministry Doron Aharon said at the conference, “Since 2010 through to today, the Tourism Ministry’s Investment Administration has approved grants to construct over 20,000 hotel rooms. Last year, we broke records with grants for 4,000 hotel rooms.

When the Ministry of Tourism examines the developers’ requests, they examine several parameters, including the business plan, the tourist experience, the location of the project and the seriousness of the entrepreneurs.

In today’s tourism we already know that the most important factor in the success of a hotel is the tourist experience. This refers to the community of guests, not to a single guest, and adapting the architectural environment to the needs of this community.

A month and a half ago, the Tourism Ministry held a ground-breaking conference on hotel investment attended by about 250 entrepreneurs and hotel industry professionals, of whom more than 100 were international entrepreneurs and organizations. The conference created a platform for cooperation between foreign investors and local property owners. The conference presented occupancy and price data in Tel Aviv from 2012 to 2016, with hotel prices never dropping below $175 per night and hotel occupancy never below 65%, even during Operation Protective Edge and times of crisis. The business environment in Tel Aviv is stable, able to withstand challenging events, overcome crises and move forward. In Tel Aviv, supply is still lower than demand, so prices are still high.”