Israel’s Luxe Boom


Jerusalem — Just when it seemed that Jerusalem’s luxury hotel market was saturated, here comes the Waldorf Astoria Jerusalem Hotel, which is expected to open its doors in time for Passover.

Located right across the street from the five-star David Citadel Hotel and the upscale Mamilla shopping area and hotel, the Waldorf Astoria is housed in a grand building, gutted but for the walls, dating back to the late 1920s and early 1930s.

The hotel’s website promises “contemporary elegance” and “opulent luxury” in “an exquisite position in the heart” of the ancient city of Jerusalem, “steps from the charming Old City.”

While the language is over-the-top, the hotel promises to be popular with those looking for old-world charm with lots of modern amenities.

With 223 “luxury guest rooms” and suites, 30 private residences (still under construction next to the hotel), two spas, a pool and a fitness center, it should appeal to anyone who wants to experience a new five-star hotel a few minutes’ walk from the Kotel, or Western Wall, and city center.

Judging from photographs, the Waldorf will try to rival the classic elegance of the King David Hotel, which continues to attract the rich and famous. It is one of a small number of top-tier hotels to be built in Israel during the past decade or so.

Eran Nitzan, who heads the infrastructure and investment department at Israel’s Ministry of Tourism, said roughly 10 large luxury hotels have been built in the country since the early- to mid-2000s. A greater number of less-luxurious properties have been built during this period, as have numerous small 4- and 5-star boutique hotels, many of them in Tel Aviv.

According to Shmuel Zurel, director general of the Israel Hotel Association, roughly 3,500 hotel rooms have been built in Israel during that time, most in the “high mid-class to luxurious” categories — a relatively small number considering the average 2,000 rooms that were built annually in places like Eilat, the Dead Sea and Jerusalem between the late 1980s and 2000.

The tourism industry took a direct hit when the second Palestinian uprising began in December 2000, and hotel investors generally put their plans on hold until the situation improved three or four years later.

Nitzan said the government has long provided incentives to encourage companies and entrepreneurs to build hotels. These grants typically amount to 20 to 28 percent of the total construction costs, and over the past decade, they have totaled “hundreds of millions” of shekels, he said. Of that sum, 40 to 50 percent went to “high-end” rooms.

The truly luxurious hotels boast superior design, service, amenities and location: spectacular views of the Old City of Jerusalem, the Mediterranean Sea or like the Bereshit Hotel next to the Mitzpeh Ramon Crater, one-of-a-kind nature spots in Israel. They pamper their guests with spa treatments, state-of-the art fitness centers and excellent onsite eateries.

The tourism officials said the opening of such top-of-the-line hotels — the Ritz-Carlton in the coastal town of Herzliya last December, and the Waldorf Astoria just before the upcoming Passover — is a reflection of just how desirable a destination Israel has become in recent years.

Tourism in Israel is at a record high, and although most tourists choose less prestigious accommodations, there are enough high-end tourists to fill the luxury properties.

Today, with the cost of land and construction sky-high, newer property developers invariably choose to build high-end hotels that offer a greater potential return. Such was the case with the properties in the gentrified Mamilla neighborhood of Jerusalem, home to the David Citadel Hotel (which opened in 1998), the newer Mamilla Hotel and adjoining luxury shopping district and residences, including David’s Village. All are a five- to 10-minute walk to the Old City’s Jaffa Gate and the center of town.

Yael Ron, director of sales and marketing for the Ritz-Carlton Herzliya, said the Ritz-Carlton Hotel Company, which belongs to Marriott International Inc., had been looking for an Israeli property to manage for a long time and that the one in Herzliya fit all the criteria.

“It is an urban resort, meaning it will have clients from the corporate world” doing business in Herzliya’s high-tech parks, he said. Furthermore, it will cater to Jewish and non-Jewish clients, bar mitzvah tours and what Ron called, “members of the global, affluent tribe” who “value status and mobility and are always curious about new places.”

The hotel has 115 rooms, half of them 600 square feet, complemented with amenities custom-made by the British heritage brand, Asprey. There also will be 82 residential apartments consisting of one- or two-bedroom suites, duplexes or penthouses with sea or marina views.

Motti Verses, spokesperson for Hilton Hotels in Israel, said the Waldorf Astoria — the Hilton’s top brand — will fill a niche in Israeli tourism.

“We believe the Waldorf Astoria is the only true luxury hotel in Israel,” he said. “We offer something that Jerusalem has never seen. Other hotels in the area aren’t in the same category.

“The rooms are gigantic, the public areas are really, really luxurious; the environment is unique. It gives you the feeling you are in an historic building and the location is one of the best Jerusalem can offer. The service the Waldorf Astoria offers is the highest standard offered by the hotel industry.”

Verses said the management of the hotel, which was originally the Palace Hotel, reportedly the first hotel in Jerusalem to offer such amenities as central heating, “is aiming to reclaim it to its original glory days. The clientele will be from the upper market, mostly coming from abroad, mainly from the U.S. but also Europe.”

During the past two decades, Verses noted, Jerusalem has experienced the defection of many hotel chains, including the Sheraton, Ramada, Hyatt and Hilton.

The fact that private investors have decided to open a luxury hotel managed by the Hilton/Waldorf Astoria chain “shows faith in Jerusalem, the capital of Israel, which deserves a hotel like this,” Verses said. ◆