InterContinental Hotels Group (IHG) is expanding in Israel beyond Tel Aviv; in two and a half years, the chain will open a new hotel in Jerusalem, its second in the city, to be called InterContinental Jerusalem.
Investment in the new hotel, located in the city center on King George Street near the Jerusalem Great Synagogue, is estimated at $130 million. The hotel will be built on the ruins of a four-storey Shikun u'Binui Solel Boneh Infrastructures Ltd. building opposite the Jewish Agency building. It will consist of two buildings: a hotel with 229 rooms on 17 floors and a luxury apartment building. There will also be a 130-square meter presidential suite, which the hotel plans to use to compete in the hosting of high-level visitors in Israel usually staying at the King David Hotel.
InterContinental Jerusalem will not be the group's only hotel in the city; it already has the Jerusalem Crowne Plaza. The hotel was planned as part of a joint venture with architects Yehuda Feigin and Arthur Spector.
IHG managing director Europe Karin Sheppard, currently visiting Israel, said that the group had hotels in 190 locations worldwide, with 60 more projects in the pipeline, including in Sofia and Jakarta. The chain also includes the Crown Plaza and Holiday Inn Express brand names, as well as the Indigo line of boutique hotels, which has a hotel in Tel Aviv.
"The InterContinental brand is the jewel in the crown for the group, and we will also offering hosting at the very highest level in Jerusalem," Sheppard said today.
The owners of the InterContinental Jerusalem says the hotel is being built from scratch and they were looking for long term ownership. This would be in contrast to the Jerusalem Waldorf Astoria, which was recently sold for $130 million by the Reichman family to French Jewish businessperson Michel Ohayon. This price constitutes a loss for the investors on their investment in the hotel's construction.
The apartments' area of the planned new development will total 4,500 square meters, and the owners are unable to say whether the sale would cover the costs of construction. The developers will receive a 20% grant from the Ministry of Tourism.
The apartments will be turned over the purchasers only when construction of the hotel is finished, which will take an estimated two and a half years. This is quite an ambitious target, given the fact that there is currently a huge 28-meter-deep pit on the site, and construction has not yet begun.
The company building the InterContinental also owns the Tel Aviv Ramada Renaissance Hotel and the Eilat Riviera Hotel, which is leased to Isrotel Ltd. (TASE: ISRO). The Taic family owns the Tel Aviv InterContinental Hotel.
Tel Aviv InterContinenal Hotel general manager David Cohen said that prices for the hotel in Jerusalem would be comparable to the competitors' prices, referring to other luxury hotels in Jerusalem, including the Jerusalem Waldorf Astoria Hotel and the King David Hotel.
Cohen said, "We will bring the product that is newest and most adapted to the current era. We will put Jerusalem on the map for 70 million members of the chain's club. We will also compete for hosting senior figures visiting Israel, and I can promise that where security arrangements are necessary, including cyber security, we will offer today's leading solutions, and are already working with suitable international security concerns and adapting ourselves to their requirements."
Cohen added, "The market in Jerusalem differs from the Tel Aviv market, because the tourist segment frequenting it is more limited; it consists of official guests and Jews visiting from all over the world. We expect more pilgrimage tourism in Jerusalem than the current numbers. We're optimistic about the city's tourist potential. A $130 million investment is no caprice; it comes from business confidence."
The IHG group manages and owns 5,300 hotels in 100 countries. The holding company is incorporated in the United Kingdom, registered in England and Wales, and has over 350,000 employees in the company's hotels and offices.
Published by Globes [online], Israel Business News - www.globes-online.com - on February 14, 2018
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