Hotels in Israel saw another record performance in 2018 as the country experienced a lull in geo-political turmoil and a rise in incoming tourist numbers.

Over the past few years, Israel has seen significant growth in its tourism sector. In 2017, the country welcomed well in excess of 3 million tourists for the first time in its history. In 2018, that number rose to 4.1 million, a year-on-year increase of more than 14%.

On the back of this growth hotels across Israel saw RevPAR [rooms revenue per available room] lift by 6% last year, driven largely by a healthy rise in average rates.

Jerusalem, one of the oldest cities in the world, and Tel Aviv, the country’s financial centre, saw the biggest uplifts with bednights up 10% and 7%, respectively.

‘The expanding number of air routes and the celebration of the 70th anniversary of the establishment of Israel contributed to the sharp increase in incoming tourists last year,’ commented Lionel Schauder, senior associate with HVS London.

‘Total demand slightly outpaced rooms supply growth between 2014 and 2018, and over the past three years that gap has increased with rooms supply growing by 2.9% and demand increasing by 6.7%, highlighting the strong potential of the country and the need for additional accommodation,’ he added.

The HVS report outlines the extensive hotel development plans in Israel over the next decade with some 13 new properties recently opened and another 50 in the pipeline, amounting to more than 10,000 additional hotel rooms across the country. The pipeline is expected to be even more significant with further projects rumoured in cities such as Tel Aviv, Jerusalem and the Dead Sea, where both local and international operators are likely to strengthen their presence.

This development activity follows a number of government initiatives launched in 2016 designed to boost hotel investment in the country.

‘Over the next decade Israel will be seeing significant development from international operators such as Six Senses, Nobu and Kempinski as well as the development of more affordable accommodation with Selina and Brown Hotels, which is bringing the first pod-style hotel to Tel Aviv,’ said report co-author Russell Kett, chairman, HVS London.

‘While the Eurovision Song Contest earlier this year failed to lift RevPAR significantly, the first half of 2019 also looks as if new records will be broken, although ongoing success does depend on continued peace in the region, and hoteliers improving their service levels to attract returning guests,’ added Kett.

Download Trends and opportunities: Israel Hotel Market Overview 2019 by Lionel Schauder and Russell Kett here.