The Beersheva District Court has appointed a receiver for the Princess Hotel in Eilat, at the request of Bank Hapoalim (TASE: POLI). The Isrotel Ltd. (TASE: ISRO) chain has managed the hotel since May 2011, its ninth in Eilat, out of the chain's total of 17 hotels.
Isrotel has stated in the past that it would invest millions of shekels in renovating and upgrading the hotel, together with Lexan Israel, which owns the hotel. In May 2012, however, Antitrust Authority director general Prof. David Gilo announced his opposition to a merger between Isrotel and the Princess Hotel, stating, "The merger increases both Isrotel's share and the aggregate share of Isrotel and Fattal Hotel Management Ltd. in the highly rated hotel market segment in the Eilat region. Such an increase in market share arouses concern about significant damage to competition."
Following this decision, Isrotel, whose contract to manage the Princess Hotel was due to expire in March 2015, began to summon the hotel's 400 workers for a pre-layoff hearing.
In response to the appointment of a receiver, Isrotel CEO Lior Raviv said today, "With the good of the Isrotel Princess Hotel's 400 workers, the hotel's dozens of external services providers earning a living from it, and its loyal guests in mind, Isrotel will negotiate with the receiver for continuation of the hotel's management agreement on the current format until October 15, 2015."
Raviv added, "Insofar as it depends on us, the hotel will continue to operate as it has up until now, at the highest level of service and quality, just like at all of Isrotel's hotels. We'll be glad to continue hosting guests at the hotel, who will benefit from its services, and the guests coming in groups and for professional conventions."
Published by Globes [online], Israel business news - www.globes-online.com - on May 6, 2015
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