Israel's banks have granted an increased amount of credit to international hotel chains and private entrepreneurs in response to the high number of tourist arrivals expected in 2018, according to Tazahi Cohen, head of corporate banking at Israeli Bank Hapoalim.
More than 3 million tourists arrived in Israel in 2017. "In the last two years we've seen an increase in the demand for credit from private entrepreneurs and international hotel chains as well," Cohen said at a Calcalist conference on tourism and technology in Tel Aviv on July 18, 2018.
Banks grant only 4 percent of existing credit in Israel's tourism industry. However, even more hotels are expected to borrow funds from banks, creating a challenge for national tourism development.
Gross domestic product generated from Israel's tourism industry accounted for 2.4 percent of the total GDP in 2016, below the Organization for Economic Cooperation and Development’s average. However, this shows a strong potential for growth in hotels, restaurants, cultural venues and local retailers.
The first half of 2018 already saw a record number of tourist arrivals in Israel, according to the Israel Ministry of Tourism. This increase generated more than $3.3 billion into Israel’s economy.
Some hotels already in development for the region and gearing up to accommodate the tourist boom include the Dave South in the Nahalat Binyamin area of Tel Aviv, the 103-room Lighthouse Hotel near the Tel Aviv beachfront and the Setai, Sea of Galilee’s 47-villa expansion on the eastern shore the Sea of Galilee. These are all slated to open by late 2018.
The 94-room Link Hotel & Hub is the latest addition to Israel’s hotel inventory, meeting the growing tourist demands. The Dan Hotels property began operating in the center of Tel Aviv on July 18, 2018 near the Tel Museum of Art, Ichilov Hospital, the diamond exchange, the Tel Aviv Performing Arts Center and the Sarona complex.