New law offers incentives to build hotels in Israel


The Knesset approved Minister of Tourism Yariv Levine's proposal aimed at making tourism cheaper.

Just before the end of the Knesset summer session, it approved the plan by Minister of Tourism Yariv Levine aimed at bringing down the cost of vacations in Israel. The law was approved yesterday on its second and third readings. The proposal included a plan aimed at increasing the number of hotel rooms in Israel by streamlining planning and building procedures, encouraging hoteliers through incentives that include an allocation of 20% of the space for residences (in certain areas in Israel), etc.

The proposal passed, despite a long list of opponents, mainly among environmental organizations, which expressed dismay concerning damage to the coastline. Minister of Finance Moshe Kahlon also expressed opposition, and a compromise was introduced in the section concerning the District Planning and Building Commissions, which will have to approve the 20% added to the hotel area for residential construction.

Levine said, "The law will make it possible and financially worthwhile to immediately construct thousands of hotel rooms. The law scrupulously preserves environmental values and the beaches, including retaining the responsibility of the Coastal Environment Protection Committee for preventing damage to the coast. All the attempts to argue that there is reason for concern about damage to the coast, or that revisions were made that prevented such damage, are nothing more than groundless demagoguery. Increasing the supply and the emphasis placed on building hotels with popular prices will finally cause a reduction in vacation prices, and make Israel attractive to both tourists from overseas and Israeli citizens. Israeli citizens are entitled to enjoy vacations at affordable prices."

Under the new law, in certain areas (not the coastal environment), hotels will be defined as national infrastructure, and will be approved quickly and simply by the Committee for National Infrastructure. This will make planning and building procedures more efficient and shorter, with a possibility of receiving a permit for a chain of hotels throughout Israel from one committee through an abbreviated procedure (up until now, building a chain required dealing separately with local committees in each local authority). Through this clause, Levine is trying to encourage overseas developers, who according to the Ministry of Tourism have already expressed interest in simultaneously building a chain of hotels in Israel.

The law also provides for the establishing of subcommittees for tourist affairs in the district committees, and both these subcommittees and independent local committees can approve up to 20% in extra hotel space for residential purposes. In other words, building hotels in areas not under a local authority (in open nature areas, for example) cannot receive such approval from the committee. The law also refers to existing hotels that build at least 50 more rooms on their site (in another building), from which they can receive a 20% allocation for residential construction. The purpose is obviously to encourage developers to invest in the sector, whose economic viability at present is unattractive.

Israel Hotel Association President Eli Gonen praised Levine, saying, "With consistency, patience, and determination, he has acted to promote the tourism industry. The new amendment in the law removes bureaucratic constraints that have hampered the development of hotels until now. The amendment will make it easier to build new hotels and to expand existing ones."

According to Gonen, the average time required to build a new hotel in Israel has been a decade. In many cases, the approval and construction procedures continued far longer than a decade.

Published by Globes [online], Israel business news - - on August 2, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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