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Tourism Ministry allocates NIS 100 million for hotel construction and expansion in 2013

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TOURISM MINISTER STAS MISEZHNIKOV: “Expanding the hotel room supply and encouraging competition within the hotel industry is central to reducing the cost of vacation packages in Israel. At the Herzliya Conference on Tourism that will take place next week, there will be discussions on the current and future trends related to accommodation options for incoming tourism, from hotels to apartment rental and overnights in neighboring countries. One must acknowledge the trends in this dynamic market in order to create the necessary tools to give an answer to the changing needs of the tourist, in order to increase incoming tourism to Israel.”

The Tourism Ministry is continuing with its preparations in advance of the increase in incoming tourism expected over the next few years and invites entrepreneurs to submit requests for assistance in building new hotels and expanding existing ones in Israel. This week, the ministry published a directive in line with the law for Encouraging Capital Investment for the construction/expansion of hotels in Israel in 2013, for an overall budget of NIS 100 million. As things stand currently, this is the first stage of the allocation that was approved with the Finance Ministry, in the situation of the absence of an approved state budget for this year.

The purpose of the directive is to encourage the construction of additional hotel rooms in order to meet the expected shortfall in the coming years, estimated at about 10,000 rooms. In 2012, the Investments Administration of the Tourism Ministry approved grants for the building of 2,750 rooms for a total cost of about NIS 265 million. The overall investment in the projects is expected to reach about NIS 1.1 billion.

.As part of the Tourism Ministry’s recognition of the importance in creating accommodation facilities in the sought-after areas, one of the main issues that will be discussed at the Herzliya Conference on Tourism hosted by the Tourism Ministry (Monday 28 January 2013 at the Daniel Hotel Herzliya) is the issue of trends in overnight accommodation for incoming tourism and the ministry’s investment in this area.

 The assistance offered by the Tourism Ministry to entrepreneurs and investors in the area of capital investment for hotels is done within the framework of the Law for Encouraging Capital Investment. The grant stands at 20% of the recognized investment, in line with criteria and the national tourism priority regions which were expanded within the framework of an agreement with the Finance Ministry. Today, the national tourism priority map includes Eilat, Jerusalem, Netanya, Haifa, Nazareth, Beit Shean Valley, the Golan and the Galilee. The two cities of Jerusalem and Tiberias were granted special status in accordance with government decisions and in these cities, hotel building grants are up to 28% of the hotel investment. In recent years, Jerusalem has enjoyed high levels of demand but has a relatively small supply of hotel rooms. Tiberias has been awarded increased grants because of its importance as a center for incoming tourism to the North.

 Entrepreneurs interested in submitting requests for grants are invited to do so by Thursday, 14 March 2013. The directives related to grant assistance for directive number 1/2013 can be found at

http://www.tourism.gov.il/GOVheb/Ministry%20of%20Tourism/Tourism%20Development/Documents/Nohal%20jan%202013.pdf