The Boutique Boom

When it comes to trends in the Israeli hotel industry, less is more — less rooms, more authenticity, that is.

The move toward small, one-of-a-kind boutique hotels, which began in Tel Aviv a decade or so ago, is continuing apace with some of the biggest chains — boutique and otherwise — gearing up for more development.

A different kind of tourist is triggering the new development, industry sources say.

“It used to be that the main types of tourists who came to Israel were Jewish and family-oriented, so the hotel chains were more suitable,” said Irit Strauss, co-owner with her brother Adi Strauss of Adi’s Lifestyle, a real estate development company. “Now, there is a shift in tourism. We are seeing more urban tourists and foreign businessmen coming for short-break visits, and they are looking for a more genuine experience.”

They’re finding it in the colorful boutique hotels, from 15 to 90 rooms, that have helped to transform some of Tel Aviv’s dreary residential and commercial areas. The venerable Atlas Hotel chain (Atlas.co.il) got the boutique ball rolling when it refurbished several blighted, inner-city properties. One was Dizengoff Street’s legendary Ester Cinema, which was one of the first movie houses in Israel. The renovation of the Bauhaus-style edifice, which was made over into the 82-room Cinema Hotel, has preserved the essence of the building’s cinematic theme, with the lobby featuring the Ester’s original movie projectors and posters. Vintage Hollywood movies are screened in the lobby for visiting tourists who wish to experience a bit of cinematic nostalgia. The success of the Cinema Hotel spurred Atlas to introduce different themes at each of its upgraded facilities throughout the city.

According to the chain’s general manager, Leslie Adler, Atlas is currently Israel’s largest boutique hotel management company, with seven properties in Tel Aviv alone. Its ArtPlus Hotel is aimed at young urban professionals who want to be in a refined artistic environment, while its Shalom Hotel, which attracts a business clientele, is an alternative to the larger hotels along the oceanfront. In keeping with a less-is-more aesthetic, Atlas was also the first hotel chain in Tel Aviv to offer free bicycles to tourists.

Atlas intends to introduce several more unique boutique hotels in the metro Tel Aviv region. Adler said, “Within the next 18 months, we intend to open both the Yam (Sea) Hotel, which will be located near the trendy Port of Tel Aviv and will cater to younger tourists who enjoy the sea, as well as another yet to be named hotel in the heart of Old Jaffa, opposite the bustling open air flea market, which will target tourists who are interested in history.”

Atlas is also in the midst of developing an architecturally compelling property along Tel Aviv’s upscale Rothschild Boulevard that Adler claimed will be the chain’s “jewel in the crown,” when the as-yet-unnamed hotel will open for business in about three years.

Adi and Irit Strauss, the scions of one of Israel’s most respected business families (Strauss Group food company), are also deeply involved in the development of metro Tel Aviv’s boutique hotel industry via two upscale properties — the Alma Hotel (set in a preserved building from the 1920s) and The Residences at Ritz Carlton (ritzcarlton.com) on the waterfront in nearby Herzliya (its boutique hotel component is scheduled to open in 2013).

The InterContinental Hotels & Resorts chain, which has been successful in helming the large David InterContinental Tel Aviv Hotel near the beachfront promenade, is also jumping aboard the boutique bandwagon. Early next year it will unveil its Art Deco-inspired Indigo Hotel Tel Aviv-Diamond Exchange (ichotelsgroup.com), which will be located in the heart of Israel’s Ramat Gan Diamond Bourse district.

“The growth of boutique hotels during the past few years has created a win-win situation for everyone involved — the builders, the tourists and the city of Tel Aviv,” said Eli Ziv, director general of the Tel Aviv Hotel Association. Ziv added that the growth spurt has spurred other long-time Tel Aviv hotel owners to upgrade their facilities in order to compete and offer a higher standard of service to urbane travelers.

“Last year, metro Tel Aviv hotels had a year-round 77 percent occupancy rate,” Ziv said. “We expect that figure to be eclipsed by the end of this year, which is why a growing number of local and foreign business entrepreneurs are investing in building boutique hotels of varying sizes.”