London -- Israels hotel pipeline remains strong and, buoyed by new laws facilitating hotel
developments, investor interest is expected to grow further in the country, according to a new report
from global hotel consultancy HVS.While the impact of continuing terrorist activity has resulted in
fewer visitors travelling to Israel, those cities with strong corporate-driven business, such as Tel Aviv,
have proven to be more resilient than mainly leisure-driven markets such as Jerusalem and the
Dead Sea area, the report highlights.Over the past year, the country saw a 25% drop in the number
of Russian visitors, while Italian visitation fell by 19%. As a result, hotel occupancies and average
rates have been under pressure, said report co-author Jill Barthel, associate, HVS London.Despite
this, the number of visitors from Germany, the UK and France has improved since the 2014 summer
conflict, with the German and UK markets proving particularly resilient, recording remarkable growth
of around 20% and 18% in 2015, respectively. Not only did visitor numbers from those markets rise,
but also the investment appetite of both domestic and international developers seems unsatiated,
added Barthel.Israel currently has a healthy development pipeline of some 7,600 hotel rooms.
Around 2,000 of these are affiliated with international hotel brands, accounting for 27% of the total
pipeline. The strongest investment interest is being shown in Jerusalem and Tel Aviv, as well as the
northern coastal areas. A new regulation, introduced by the Knesset earlier this year aiming to speed
up the completion of hotel developments and enable up to 20% of each hotel to be classified for
residential purposes, is expected to stimulate demand further still.Nevertheless, the number of
bednights accounted for by international visitors to Israel fell in 2015 by 10.5%, indicating that
many people reduced their stays. Airbnb has also claimed around 5% of hotel bednights,
constituting a non-neglectable competitor to regular hotels whose impact the Israel Hotel Association
is actively trying to limit by fighting for the implementation of tax laws and stricter regulation on this
market.The overall outlook for Israel isnt as negative as might be perceived though, considering the
prevailing geo-political environment. Overall, investment appetite in the country has not weakened
over the past year so the outlook for Israels hotel sector gives reason for positivity and renewed
hope, concluded Russell Kett, chairman, HVS London.To download a full copy of the report Trends
and opportunities: Israel Hotel market Overiew 2016 by Russell Kett and Jill Barthel click
http://www.hvs.com/article/7731/israel-hotel-market-overview-2016/