The Israeli hotel sector has experience unprecedented growth in recent years. More and more hotels are being built, and in unexpected places. There are hotels near Sde Boker, in Maaleh Shaharut in the Arava, in Shavei Tzion, and even in Airport City.
In Tel Aviv, also, the beach is no longer the only location. Hotels are penetrating into residential neighborhoods, office buildings, and even apartment houses.
The change is evident in not only the number of hotels being opened and the new locations, it also involves what they provide their guests. Hotels are no longer offering an overnight experience; they are offering a hosting experience. The mix of hotels is expanding and become more diverse, and the planning features and the ability to make money from them are changing accordingly. Some of Israel's veteran hoteliers told "Globes" about this change.
Leon Avigad, Brown Hotels: "People aren't in the room"
Leon Avigad, who founded the Brown hotel chain ten years ago together with his partner, says, "They aren't a chain; they're a collection. Every hotel has a different story, narrative, and concept." The chain now has nine hotels in Tel Aviv, two in Jerusalem, and several more overseas. Avigad emphasizes that there are no clear rules in planning and designing the chain's hotels. "We have a concept. There are party hotels, like the Lighthouse in Tel Aviv, Berlin, and Athens, and there are also very small and decorative houses with 20 rooms."
Avigad describes the substantial change now taking place in planning the urban hotels in Tel Aviv and other large cities. "In recent years, we have seen two important trends. One is the rise in real estate prices, which made it necessary to think much more effectively about every single square meter. There's no such thing as a square meter going to waste. There's no such thing as a lobby because you have to have a lobby. This thinking has changed a little.
"The second trend is adding content. It started with boutique hotels with night life and parties - not just a room to rest your head. It expanded into theme hotels. In a digital world, you have to differentiate yourself, mainly through content."
"Globes": What does content mean?
Avigad: "For example, we put up a concept store in which we sell our toiletries, our music, and our linen. We make shared workspaces, or devote space to art. It depends on the space. The upward trend in real estate prices means that you have to think about every meter. The rooms are getting smaller, because people aren't in the room."
How much smaller?
"I wouldn't say small; I'd say functional. With us, we always add work a work table in the room to comfortable beds. There's something pampering and comfortable in such a table, even though most people work today with laptops on the bed. We also make sure that the chairs are comfortable. There's always another armchair, so that if you come back from a day at work or a stroll around the city, you can sit in a comfortable armchair. We'll always have bathrooms with a long waterfall shower."
What size is a room in an urban hotel?
"Even in sixteen square meters, you can put a comfortable bed with small dressers on each side of the bed, a work table, and a comfortable work chair and a bathing experience. This was once unheard of, but you can't tempt me with large rooms now. When I look for a hotel on Booking.com, I'm far more attracted by a cool bar or a spa that attracts people from outside, and then you meet more people. It's far more attractive if there's a good restaurant or a cool club, or the design is super-wow. If it's just a large room in a generic hotel, without content, it's not interesting.
"We're building a hotel in Athens now that not only has a tattoo parlor, but also a barbershop, a huge spa, a shared work area, two more gallery stores, and a cool Athens brand café. There are also boardrooms, a bar with a swimming pool, an external movie house with screening on an adjacent building, and also an exclusive upper roof for the hotel guests. The rooms here are really small."
How do you explain the change in hotel design?
"Hotels were once a place to rest your head. They have become cultural agents - a place for self-expression. An awful lot of the boutique hotel ventures are creative people who want to tell their story, and don't think about the thickness of the bed."
And the clientele?
"We've all improved. The digital revolution has changed all of us. We're swamped with culture and content and music. The hotel can't be just a place to sleep in.
"Once upon a time, you'd choose a hotel according to the view from the hotel, or the room size. Today, this is of no interest. Today, people choose a hotel according to the number of followers on Instagram and how cool you are."
Danny Lipman, Atlas Hotels: "Keep the guests inside the hotel"
Danny Lipman is CEO of Atlas Hotels, which has 12 hotels in Tel Aviv and additional hotels in Jerusalem, Haifa, and Eilat. In his opinion, there's a great difference between hotels in Eilat and other places.
Lipman: "It's obvious that rooms in Eilat have to be big, because people there are on vacation, and you want to have a little more there than you have at home. In urban hotels, things are measured a little differently, but the room size is still an important factor. The trick is to create a mix of rooms for different purposes.
"Our hotels focus on boutique hoteliery: both urban and non-urban hotels. For me, a hotel room in Tel Aviv should have 22 square meters. It's OK if I also have several 16-square meter rooms, but on the other hand, I also have 30-square meter rooms. There's market for both of them."
What about the change in the concept of public space?]
"We're talking today about a hosting experience, not a sleeping solution. The new hotels are looking for a way to make people come to the hotel, not how to make guests leave the hotel. They do this, for example, by creating a culinary experience at the hotel. We opened the Fabric Hotel not long ago on Nahalat Binyamin Street, and in cooperation with the Imperial group, we opened a very successful bar named Bushwick, which is an entertainment focus for people from the neighborhood. A scene is being created there that the hotel guests enjoy."
Lior Raviv, Isrotel: "Rooms in Eilat are very big"
Isrotel chain CEO Lior Raviv also says there is a significant difference between designing a hotel in Eilat and in Tel Aviv. "The design trends are related to the hotel's location and character. Traditionally, we started our activity in Eilat, where rooms are very large. It had to do with the fact that there was no restriction on size. The rooms in the King Solomon Hotel have 25 square meters and huge public spaces. This is the hotel that invented this genre in Eilat: dining halls, swimming pools, restaurants. Everything is big. At the Royal Beach, an enormous hotel with 40,000 square meters, we did many swimming pools and children's facilities. The smallest room there is 30 square meters.
"At the Royal Garden, we went for a concept of suites, the smallest of which is 40 square meters. We opened a supermarket inside the hotel, and put kitchenettes in the rooms. It's the ultimate solution for a family vacation."
What is happening in Tel Aviv?
"We're in the process of building eight hotels in Tel Aviv. It's a completely different story here, because the cost of the land is very high, and the objective is to make as many rooms as possible. The rooms are indeed getting smaller and smaller - 18-22 square meters, - but we have no 14-square meter rooms. We're not getting into capsules."
Isrotel devotes a great deal of thought to designing the bathrooms. "Instead of making a lot of walls, which make the bathroom smaller, we open the bathroom into the room. The toilet and the bath are closed in with glass, but the sink is part of the room. In this way, you get the feeling of a very large room."
Is there change taking place in the attitude towards public spaces?
"When you check into our hotel, I want you to feel that you've come to the most suitable place in Tel Aviv. The experience used to be that you'd go down to the bar, drink something at the bar, and go back to your room to sleep. Today's bar also attracts locals. The young audience at hotels is looking for places where it can mix with the local people. A synergy is created between tourists and local people opening businesses with us."
Ami Federmann, Dan Hotels: "The small rooms are a marginal trend"
I met Ami Federmann, co-owner of the Dan Hotels chain, at the Link Hotel on Shaul Hamelech Boulevard in Tel Aviv. The Amidar government housing company was once located here, and the chain turned it into a hotel. We sat next to a café on the basement floor. The place is designed like shared work spaces, and is crowded with young people sitting here with their laptops and working to the sounds of soft music. Federmann is the most experienced of the people I interviewed, and he has a long-term and realistic attitude. "Hotels were already places of entertainment in the 1970s. Look at the Plaza in New York and the Savoy in London. Even before restaurants were so common, hotels were a place where people came to eat and be entertained. In Israel, look at the industrial zone in Herzliya. There wasn't a single restaurant there. Where did people go to eat? To hotels. There were also not so many people who went out to eat."
Has the situation really changed?
"To say that there's a trend towards small rooms and large public spaces is true for certain types of hotels, but all in all, it's a marginal trend. There are people who want large suites today, and there are young people who want a small-sized room, but not poor quality.
"I always compare this with the urban space. You surely agree that there are many more people willing to live in a three-room apartment in the town center than in a large house outside the city. The dream was once the exact opposite. Living in a city means a smaller kitchen and smaller cupboards, and maybe the children living together in one room. Someone who chooses to live in the city trades personal space for public space. You leave the apartment, and you have culture. You don't need transportation. It's the same way with a hotel."
Federmann points to the bar in the Link Hotel and explains that all of the customers' priorities have changed. "Our bar has only self-service, and we don't accept cash. Our best surprise was that the guests clear the table themselves. You check in for a flight by telephone Why shouldn't you the same thing when you enter a hotel", he asks rhetorically.
The large income-producing real estate companies that are getting into the hotel business
Azrieli
Controlling shareholder: Azrieli family
Market cap: NIS 31 billion
Hotel activity: Purchased the Har Zion Hotel in Jerusalem for NIS 275 million, will invest NIS 500-600 million in renovations. A 250-room hotel is also planed in the planned Spiral Tower in Tel Aviv, and a hotel next to the Azrieli mall in Modi'in.
Industrial Buildings
Controlling shareholders: Public 40%, investment institutions 33%, parties at interest 26.6%
Market cap: NIS 7.6 billion
Hotel activity: Mivne group, the parent company, is turning a commercial building in Beer Sheva into a hotel, and is considering turning more of the group's properties into hotels.
Israel Canada
Controlling shareholders: Barak Rosen, Assaf Tuchmeir, Avraham Ben David Ohayon
Market cap: NIS 2 billion
Hotel activity: Play Hotel in the Midtown Tower developed by the company, recently bought the Publica Hotel in Herzliya, founded a hotel management company
Nitsba
Controlling shareholders: Koby Maimon and Haim Tzuff
Market cap: A private company with properties worth billions of shekels
Hotel activity: Bought the Princess Hotel in Eilat, in the process of building hotels in Tel Aviv, Jerusalem, Haifa, and Airport City. Also considering entering Beersheva.
Published by Globes, Israel business news - en.globes.co.il - on January 30, 2020
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