During 2012, 1,750 new hotel rooms were approved for construction. 2012 statistics related to capital investment in the tourism industry show that the Tourism Ministry invested about 260 million NIS in projects and helping entrepreneurs, 25% more than in 2011. The overall investment (grants and the investment of entrepreneurs) amounted to about 1.1 billion NIS.

Most of the grants in 2012 were allocated to the construction, expansion or conversion of 37 hotels throughout Israel. 25 of these hotels were new hotels or have been converted or expanded after they had been used for a different purpose and the others were buildings that had been originally designed as hotels. The hotels are in Jerusalem, Haifa, Akko, Nazareth, Ashkelon, Mitzpei Ramon, Eilat, Beit Shean and Kiryat Shmona, among others. Israel currently has 47,900 rooms in 340 hotels throughout the country.

Entrepreneurs building in Jerusalem – Israel’s most-visited city – are eligible for a unique grant of up to 28% of the investment. In 2012, grants were allocated to six new hotels in the city and to 3 hotels for conversion with an overall investment of about 450 million NIS. Among the hotels receiving grants is the Colony Hotel planned for the city’s German Colony at an investment of about 257 million NIS. The total amount of grants approved for Jerusalem, in the various tracks publicized by the Tourism Ministry including grants for renovations, stands at about 168 million NIS out of the overall investment allocation for Jerusalem which stands at 650 million NIS for 2012.

The Tourism Ministry approved grants of 10 million NIS for tourist attractions, 56% more than in 2011. The overall investment in tourist attractions, most of them in Eilat, stands at 97 million NIS. These include the Ice Park Mall in Eilat at an investment of 31 million NIS and the construction of the shark pool at the Astral Water Park at a cost of 20 million NIS. Within the framework of developing infrastructure in Eilat, the ministry also assisted with the construction of the promenade at the Ice Park Mall and another promenade at the Mul Yam Shopping Center, thereby completing the boardwalks in the resort.

The assistance offered by the Tourism Ministry to hotel entrepreneurs was implemented within the framework of the Law for Encouraging Capital Investment. The grant allocations are up to 20% in accordance with the criteria and the national priority map for tourism. Assistance given to entrepreneurs for tourist attractions is up to 10% of the total investment costs. Due to the high demand for accommodation in Jerusalem and Tiveria and given the short supply of rooms in those cities, grants for building hotel rooms reaches 28% of the total investment.

Given the steady increase in incoming tourism in recent years, the Tourism Ministry expects to continue assisting in the construction and expansion of hotels. This, in order to expand the existing supply of hotel rooms in order to reduce prices and be prepared for the anticipated arrival of 5 million tourists by 2013.

(YWN – Israel Desk, Jerusalem)