Tourism Ministry of Israel planning to convert offices buildings into hotels

Published on : Monday, May 7, 2018

Tourism Ministry of IsraelThe Tourism Ministry of Israel is going to launch a program to convert Tel Aviv office buildings into hotels for the hotel developers.



And now that it has released the criteria – an apparently hastily drawn-up document filled with errors – the ministry is under criticism for heavily favoring international hotels chains over local ones. Indeed, an executive at one Israeli chain, who asked not to be identified, said he was taken by surprise by the whole affair.



Israel is experiencing a surge of tourist arrivals that has left the country, especially Tel Aviv, short of hotel rooms.



The tourism authority officials have been taking a host of stop-gap measures to deal with the problem, including a proposal unveiled by Transportation Minister Yisrael Katz to adapt an air force base for civilian use.



The Tourism Ministry of Israel said on Sunday that the urgency in boosting the inventory of Tel Aviv hotel rooms was behind the decision to go ahead with announcing the subsidy program 10 days ago. Doron Aharon, the deputy director general for investment and development at the ministry, told The Marker that there were unspecified legal reasons why the criteria were released only later.




But other ministry sources said that behind the rush were advanced negotiations underway with an unnamed international hotel chain that was expected to make use of the subsidy program. It would be the first property in Israel for the chain, they said.




In any case, the program gives a clear edge to international chains over Israeli ones. The points system in the process for being awarded the assistance automatically give 25 points to overseas chains and another 10 for international chains that “present a declaration-of-intent letter.” More money is awarded to bigger hotel projects over smaller ones.



The program got underway in March when the ministry said it had allocated 25 million shekels ($6.9 million) for the undertaking, with Prime Minister Benjamin Netanyahu saying he might consider enlarging the budget later. The grants can reach up to 10% of the cost of converting an office building into a hotel, up to 25,000 shekels a room, meaning the budget is for up to 1,000 rooms.




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