Brown Hotels pivot to longer term rentals

Brown Hotel room  / Photo: Max Kovalsky

A room in one of 15 of the Group's hotels in Jerusalem and Tel Aviv will cost between 3,500-7,500 per month.

With no foreign tourism and tourists during the Covid-19 crisis, hotels in Jerusalem and Tel Aviv are reinventing themselves. One option is to switch to longer term rentals and Brown Hotels has decided to convert 15 of its 20 hotels into long-term rental accommodation. Rooms can be rented in these hotels for a minimum of one month with notice of one-day needed for extending the arrangement.

Brown Hotels founder, owner and co-CEO Lior Avigad said, "On the one hand we understand that what is happening what be over so quickly, and on the other hand we have identified demand for temporary housing solutions. There are people between jobs and between apartments who need to find a creative housing solution for several months. We understand that this is a need that will remain over the next year or two. We convened the operations staff and we considered a change of thinking, and how to provide solutions for various communities that each have different needs - from artists needing a studio or people looking for an entertainment scene where they can sit on the roof and drink beer surrounded by their own community. People are ready to pay for that in both Tel Aviv and Jerusalem. We have hired community managers, built communal areas and kitchen accessories in rooms."

Brown Hotels will keep three of its hotels out of the rental loop - Poli House, Bobo and Lighthouse. Avigad said, "Despite everything we believe that somebody has to also serve tourists, not a large number and certainly not in the numbers of 2018 and 2019 but at some time something will happen. I don't believe that until the end of 2021 we will reach the numbers of 2019 but there is belief that at some point the market will reawaken and the skies will open to tourists.

With inauspicious timing Brown Hotels is set to open the 115-room MahaneYehuda Hotel in Jerusalem.

"The average stay in a longer term rental is three months," said Avigad. The average price per room will be about NIS 3,500-4,000. "There are also rooms for NIS 7,000 and for less. A suit with a Jacuzzi and view of the sea won't cost the same as a hipster room. Guests can pay more for services like cleaning, and using the spa etc."

"It's a price that lets us pay rent to the property owners and allows us to bring back employees from unpaid leave, although only in small numbers while most employees will remain on unpaid leave."

At present six Brown hotels are operating on a rental format with nine more due to open for rental. Brown Hotels will be launching a digital campaign for the room rentals under the Brown Living brand.

Published by Globes, Israel business news - en.globes.co.il - on November 12, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Brown Hotel room  / Photo: Max Kovalsky
Brown Hotel room / Photo: Max Kovalsky
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