Writing in Hotel Management, Joseph Fischer, CEO of Vision Hospitality & Travel, explains how Israel’s government is incentivizing the conversion of buildings into hotels by offering a generous package. “The shortage of reasonably priced hotel accommodations—and available land— has become a source of concern for the Israeli Ministry of Tourism and for the Tel Aviv municipality leaders. As a result, the Israeli government has approved grants for developers converting offices to hotels in Tel Aviv amounting to 10 percent of their investment.”
Fischer highlights that the industry is headed in a good direction. “The good news is that Tel Aviv is more than halfway to where it needs to be in terms of hotel industry growth.
“Developers and landlords are growing an appetite for hotels in their real-estate portfolios. The highly successful Fattal Hotels initial public offering at the Tel Aviv Stock Exchange at the beginning of 2018 has shown owners and potential investors alike that they can make good money by having hotels in their portfolios. More and more insurance companies and pension funds are investing in single-asset hotels, portfolio deals and hotel chains.
In addition, the Ministry of Tourism is attempting to work with the Finance Ministry to provide a safety net for investors in hotel projects.”
Some of the hotels that converted old buildings include:
- The Setai in the Jaffa area of Tel Aviv, which was a police station during the Turkish Ottoman era
- The former Clal Insurance house was converted into the NYX Hotel Tel Aviv
- An office building was renovated into the Link & Hub hotel by Dan Hotels
- The Jaffa, a Luxury Collection Hotel is an old monastery that was converted into a luxury hotel and residences
- The former Jerusalem hotel in Jaffa was transformed into the Drisco hotel