Astral buying Queen of Sheba Eilat Hotel from Yitzhak Tshuva

Queen of Sheba Eilat Hotel  credit: Tamar Matsafi

The hotel is one of the largest in Eilat. The price is NIS 458 million, or NIS 200 million net of debt.

The Astral Hotels chain will buy the Queen of Sheba Eilat Hotel from Yitzhak Tshuva for NIS 458 million. The company will actually pay NIS 200 million, because of debt of NIS 250 million owed by the hotel.

The Astral chain, owned by Benny Zerah and Asher Gabay, was founded in 1966 by Zerah, a native of Eilat. In late 2019, Tshuva agreed the sale of 45% the hotel to Fattal Hotels for NIS 400 million, but the Competition Authority objected to the deal. Astral Hotels has six hotels in Eilat, most of them medium grade, while Fattal Hotels has ten hotels in the city.

The Astral Hotels in Eilat are the Nirvana Club, Nirvana Suites, the Palma, the Maris, Astral Village Hotel, and the Aria, which the chain acquired in 2019 when it bought 50% of the hotel (previously known as U Suites) from Liora Ofer.

If the Competition Authority approves the deal - and it probably will - the Queen of Sheba Hotel will change hands within the next few months. Astral Hotels intends to keep the hotel's name, which is a strong brand. For Astral Hotels, which operates only in Eilat, this is a move up, both in the size of the hotel, and in its five-star status.

Demand for hotels in Eilat, which has about 10,000 rooms in some 50 hotels, is high (as evidenced by the high overnight stay prices), but construction of new hotels is proceeding slowly, if at all. The sale is by El'ad Hotels, which is owned by Tshuva as part of his privately held Elad Group. Tshuva is the controlling shareholder of public energy company Delek Group Ltd. (TASE: DLEKG).

The Queen of Sheba Hotel is divided between hotel rooms and residential units. It is centrally situated in Eilat and is one of the largest and most prominent hotels in the city on the Red Sea. It was opened in 1999, and offers 481 rooms at different price levels.

Before Tshuva, the hotel was managed by the Hilton chain. In 2017, when Hilton ceased to run it, it underwent renovations costing NIS 23 million.

Elad Group did not respond to the report. Astral Hotels confirmed the details.

Published by Globes, Israel business news - en.globes.co.il - on July 22, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Queen of Sheba Eilat Hotel  credit: Tamar Matsafi
Queen of Sheba Eilat Hotel credit: Tamar Matsafi
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