ISSTA is expanding its hotel business: in partnership with developer Yaron Levy, chairman of ISSTA subsidiary American Express Travel, it will build (through ISSTA Assets) a boutique hotel in central Tel Aviv. The new hotel, the fourth in the ISSTA group's hotel portfolio in Israel, is slated for opening in late 2018. The investment is estimated at NIS 60 million. The hotel will be owned by ISSTA Assets (40%) and Yaron Levy and a group of owners of Asian restaurants (including Fu Sushi) (60%).
This is the first cooperation enterprise by ISSTA Assets with this group of developers. "This is a special synergy that does not exist with other groups," Levy told "Globes." "In contrast to most hotels, whose main task is to bring clientele, because of the tourist link of American Express and ISSTA, we have a built-in advantage in bringing the overseas business clientele at which this hotel is aimed.
"Hotel occupancy in Tel Aviv is around 70%, and we'll be able to bring an additional 5-6%. That's not a bad cushion for periods of low occupancy, because we can steer the tourist clientele through us to a hotel that we own."
The 6.5-storey hotel, with 50 fairly small rooms, construction of which began this week, will cover a 3,000-sq.m. area that formerly housed the Yiddish library on YL Peretz St between Florentin and Neve Sha'anan. The rooms will have accessories aimed at a business clientele. The hotel is being constructed according the criteria required for a four-star hotel, and an overnight will cost NIS 800-1,000.
Architect Yoav Messer, designer of the Norman Hotel and the Peres Peace Center, is responsible for the hotel design, which is based on the Yiddish library that formerly stood on the site. The hotel will look like a pile of books lying on top of each other. Yaron Tal, who has designed hotels and restaurants in Israel and overseas, is responsible for the interior decorating.
"Globes": The Ministry of Tourism is trying to encourage construction of medium-level hotels as a solution to a real shortage, but you are focusing on the luxury segment. Why?
Yaron Levy: "It is true that there is a real shortage of medium-class hotels, but building a hotel in Tel Aviv is an expensive and long process. We're investing NIS 60 million in getting it built, which is taking seven years. I see no chance of making back the investment from a three-star hotel, because the difference in investment would be minimal. I considered a project in Ashdod, and it's frightening, because of the low occupancy and the risks."
Published by Globes [online], Israel business news - www.globes-online.com - on July 6, 2016
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