A Race For New Hotel Space

Sheraton Jerusalem Plaza lobby is about to undergo a complete transformation.

by Ken Stephens
Special To The Jewish Week

Jerusalem hotel owners are facing
an unusual problem in the coming months: According to tourism industry sources, almost every major hotel in Israel’s capital city is fully booked from May, when Israel will kick-off its 60th anniversary celebrations, through the fall holiday season.
“To tell you the truth, there is already a shortage of available hotel rooms for the rest of the year, which means that if everything stays quiet in the region, Jerusalem hotels are on target to reap the benefits of having their best year ever,” Jonathan Harpaz, the director of the Jerusalem Hotel Association told The Jewish Week.
Yet despite the shortage of rooms in Jerusalem, only one new major hotel, the 207-room, five-star Alrov Mamilla Jerusalem Hotel is scheduled to

open its doors during 2008.
The space problem is indicative of a larger issue within Israel’s burgeoning hotel industry, which can only accommodate a maximum of three million tourists a year (there are 47,000 hotel rooms available throughout the country). With Israel’s Ministry of Tourism predicting that 2.8 million foreign tourists will visit the Jewish state during 2008, the government of Israel has practically begged local and foreign business magnates to pick up the slack and build new facilities, offering numerous financial incentives along the way. However, Israel’s stifling local and national bureaucracy has stymied those efforts.
In Jerusalem alone, it took nearly three decades of acrimonious negotiations for Israeli hotel and real estate magnate Alfred Akirov (David Citadel Hotel and David’s Village) to finally receive the green light to build the Mamilla Quarter hotel and shopping promenade. The new Alrov Mamilla Jerusalem Hotel is a vital component within the massive project.
Less than three miles away, a Canadian Jewish hotel builder has been waging an ongoing battle with both environmentalists and the local municipality over plans to erect an Israeli version of the ultra-chic Four Seasons Hotel.
However, The Jewish Week has learned that two other business magnates are moving ahead with plans to invest hundreds of millions of dollars in order to build two new large five-star luxury hotel complexes in Central Jerusalem.
The Toronto-based Reichmann real estate family recently green-lighted the demolition of the interior of the legendary Palace Hotel (between Agron and King David Street), while keeping the outer façade intact. The façade is slated to become the grand entrance into Reichmann’s new Palace Hotel and residential complex. A spokesperson for the Reichmann family said the hotel will be ready for occupancy by 2010.
Just up the block from the Palace Hotel, Brooklyn real estate and hotel builder Shaya Boymelgreen is completely renovating his Sheraton Jerusalem Plaza Hotel. And he’s also in the final stages of completing plans to erect a new tower adjacent to the current facility that would add an additional 300 rooms to the Sheraton Jerusalem Plaza complex.
“Our hotel has become a mecca for many American Jews to see and meet each other throughout the year. In fact, during the past year, I’ve had to start turning away business because we’ve been overbooked, especially on Shabbat weekends when our dining rooms and restaurants are filled to the brim,” Boymelgreen said. “Friends, who used to see each other on the boardwalk in Miami 10 years ago, end up rekindling their relationships in the Jerusalem Plaza. It is a fascinating phenomenon.”
During the past year, Boymelgreen, via his Tel Aviv-based Azorim and Boymelgreen Capital business enterprises, has snapped up other lucrative properties in both Jerusalem and Tel Aviv. He intends to build a variety of upscale boutique hotel and residential apartment buildings targeting both wealthy Orthodox families and Jewish businessmen from all over the world.
The former Jerusalem Pearl Hotel, which closed its doors in late 2007, was recently purchased by a French businessman, who according to sources intends to completely renovate the 90-room facility and turn it into a posh boutique hotel. In addition, the Atlas Hotel chain, which owns and operates eight small and midsize hotels in Tel Aviv and Eilat, will open the doors to its newest Jerusalem facility, in the Nahalat Shiva quarter (opposite the Ben Yehuda Street pedestrian mall) in the spring.
Harpaz traced the resurgent Jerusalem tourism to the end of the second intifada in 2004 and the Ministry of Tourism’s effort to lure more non-Jewish tourists to the Holy City.
“Already in 2004, we started to see a gradual increase in overnight stays in Jerusalem. By 2007, Jerusalem hotels were experiencing the kind of bookings that they hadn’t seen since 2000 [just prior to the second intifada], which was considered a record-breaking year. We anticipate that 2008 will establish a new record,” Harpaz said.
“Jerusalem has seen a dramatic increase in the numbers of Christian pilgrims from the U.S. and other regions such as Italy, Poland and Russia, which has not only helped the hotels, but also all the other businesses throughout Jerusalem, including restaurants, tourist attractions, shops, art galleries, etc.,” he continued. “This is part of the domino effect, which boosts the local economy and keeps local citizens employed all year round.”

Westchester Jewish Conference

Westchester’s Jewish Community Relations Organization