In an initiative of the Tourism Ministry, the Knesset Finance Committee on Tuesday, 3 Elul approved a new priority map for the tourism industry. The objective of the new map is to encourage hotel construction and the increase of the hotel room supply in a number of new cities and areas and to encourage tourism projects operating in the periphery of large cities and close to Ben-Gurion Airport.

The purpose of the order is to increase the supply of guest rooms in Israel, including budget hotels and hostels – a process that is expected to reduce prices in the tourism industry.

According to the conclusions drawn by a professional team from the Tourism Ministry that formed the basis for this order, a moderate increase in the number of active hotel rooms had been registered over the last decade, whereas the number of tourists had increased significantly. It was also apparent that the slow increase in the hotel supply was one of the factors impacting on the increased costs of hotel prices in Israel.

The order stipulates that tourism entrepreneurs in the areas defined in the new priority map are entitled to a grant of up to 20% of the total investment. In addition, a few weeks ago the government approved the proposal of the Tourism Minister Yariv Levin for financial support of up to 33% of the total investment in building budget hotels. This benefit will also apply to the new priority areas.

It should be noted that the total annual budget for grants stands at NIS 200 million. This is one of several steps taken that have been initiated by the Tourism Minister Yariv Levin, among them the Hotels Law which is designed to lower vacationing costs and was passed by the Knesset in early August, and the government decision to offer a 33% grant for the establishment of budget hotels, passed a few months ago.

Tourism Minister Yariv Levin: “I congratulate the Knesset Finance Committee Chairman MK Moshe Gafni for approving my decision to expand the national tourism priority area map. This is another important step in reducing the cost of vacationing in Israel and increasing the hotel room supply. Expanding the map will facilitate higher grants for building hotels in the new areas and will lead to a wider range of hotel rooms and the creation of many more jobs throughout Israel.”

(YWN – Israel Desk, Jerusalem)