Going Rental: The Tourists Aren’t Coming, So Israel’s Hotels Are Entering the Real Estate Market

The country currently has about 50,000 guest rooms and about zero overseas tourists. As a result, tourism entrepreneurs are having to find creative solutions in order to survive

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Biankini Village Resort on the Dead Sea’s northern shore. Now a room could be yours for less than $750 a month.
Biankini Village Resort on the Dead Sea’s northern shore. Now a room could be yours for less than $750 a month.Credit: Dina Dagan/PR
Moshe Gilad
Moshe Gilad

When Dina Dagan tells you “I have no choice – there’s simply no choice,” you know things are bad. For over 20 years, she’s been managing the Biankini Village Resort on the Dead Sea’s northern shore. Now, though, with no tourists being allowed into Israel, she’s made a radical decision: Biankini will no longer be a resort but rather, a place offering long-term apartment rentals.

For 2,500 shekels ($742) a month, Dagan is offering residential units of one or two rooms with a bathroom and shower, living room, air-conditioning, balcony and backyard. Payments for property tax, water, electricity and Wi-Fi are included, as well as room cleaning and bedding-towels changed weekly.

Each unit has a kitchenette with a refrigerator, electric stove and microwave. The resort also has a food store. Ordinarily, it would be impossible to rent a room at this price even for a week. But we’re not in a normal situation.

Biankini, with 80 rooms, is situated next to Kibbutz Kalia at the northern end of the Dead Sea, half an hour from Jerusalem and beyond the Green Line. It’s now offering all its rooms for long-term rental – and there seems to be strong demand. On the day we spoke, about half of them had already been rented out.

“Our sources of income have disappeared and I don’t see when they’re coming back,” Dagan says. “There are no guests, no tourists, no swimming pool, no restaurant and no events. How will we make a living? The income from long-term rentals will allow us to survive, to maintain a reduced staff and, primarily, to operate the place, which is deserted at the moment.

Biankini Village Resort, on the northern shore of the Dead Sea. Credit: Dina Dagan/PR

“I simply can’t see it like that,” she sighs. “I realized we have to think differently, at least for a certain period of time. We’ve never been in such a situation before. In light of the demand, in the coming weeks we’ll prepare the open area in the village and set up a permanent trailer park, where people can put their trailers and live like that for a few months. You wouldn’t believe how many people have already asked to do so.”

After taking a long drag on her cigarette, she laughs. “Actually, I’m starting a kibbutz!” she says. “Anyone who already lived here has connected to the others: A shared community of people who cook and hike together has been created.”

For whom is this facility intended? According to Dagan, it’s for anyone “who’s on unpaid leave and doesn’t know what to do. Anyone who’s afraid to stay in a rented apartment in a big city because it’s too expensive. Anyone who wants to live outdoors a little, to hike, to breathe good air, to engage in sports. There are quite a few people who want to make a change, to lower their costs and live somewhat differently. This is the time to clear your head and achieve peace and quiet.”

Dina Dagan. “Our sources of income have disappeared and I don’t see when they’re coming back.”Credit: Rafi Kotz

The unanswerable question, of course, is how long Biankini will have to operate like this. Dagan herself admits to having no idea, saying that it may be months or even years. “I hope that in the future we’ll reopen as a resort village, but it’s not at all practical to think about that at the moment. Now we only have to survive,” she says.

Lena and Amit Amzaleg have been staying at Biankini for the past couple of weeks. They run a fitness club in the Haifa area, but because it can’t be opened they refused to stay home “and stare at the four walls.” Instead, they’re enjoying themselves by the banks of the Dead Sea. “Suddenly, this horrible period has turned into a wonderful time,” Lena says. “We eat healthy food, maintain a routine, do a lot of exercise and enjoy this landscape every day.”

Lena, who is active on Instagram, says many of their friends saw what she was posting from their new “home” and followed them east. At the end of the day, though, they’ll have to return home in order to make a living. “I would love to live here permanently, but our business is in the north,” Amit says. “There’s no possibility of creating a clientele here. But for this period during the coronavirus – it’s a dream.”

Dagan’s decision highlights several trends. First, even the true believers, the sworn optimists, are starting to recognize that tourism in Israel is dead. A popular joke currently doing the rounds in the hotel trade is: “In order to save money, we turned off the light at the end of the tunnel.”

Second, the most innovative entrepreneurs are seeking – and finding – creative, unusual solutions for this difficult situation. They’re surviving in the industry that has suffered the most, and where the damage will continue far longer than in other fields.

‘Grin and bear it’

Biankini isn’t alone. Israel has some 50,000 guest rooms (in hotels, resort villages, hostels, etc.). Almost all of them are closed at the moment and all facing the same painful question: what to do?

When I ask Haim Statyahu, general manager of the 180-room Ein Gev Holiday Resort, if he’s considered the idea of long-term rentals on the shore of Lake Kinneret, he shakes his head. “It won’t happen here, it’s simply not in our DNA,” he says. “We work in hospitality, that’s our business. We don’t rent out real estate. Although the situation is tough, I’m far more optimistic than others. I believe that in a few weeks, you’ll contact me to ask about the quick opening and the great demand.

“The boom will return,” he predicts. “That’s what happened at the start of the summer too, when we opened after the first lockdown: we had insane demand during July and August. We were full. At the moment, there’s no choice – we have to grin and bear it, be patient and wait. Long-term rental is a solution that doesn’t suit us.”

Others in the hospitality business have pursued a path similar to Dagan’s. Maoz Inon, one of the founders of the Abraham Hostels chain, explains that 30 rooms in their Tel Aviv hostel are now long-term rentals, complete with bathroom and shower. He says there’s some demand – but not a huge amount. They’ll rent out additional rooms if they can.

Maoz Inon from the Abraham Hostels chain. Credit: Gil Eliahu

It’s the chain’s only income these days and Inon believes it will be years before tourists return at the same levels as before March 2020. His renters are people who are looking for a simple housing solution and don’t want to make a commitment to rent an expensive apartment.

He’s frank when asked why his company is transitioning to the rental market. “It’s not clear that it is worthwhile, but there’s no choice,” he says. “But it enables us to keep the places open and operating. To close a hostel and reopen it is almost impossible. This way, we can retain a small staff and maintain the place as an active business. The water flows in the pipes, there’s maintenance. Closing down such a place is a catastrophe that we’re trying to avoid.”

Inon acknowledges that Abraham Hostels is in the hospitality business, “but we’re all doing things now that aren’t in our DNA. We’re simply doing what we can to keep afloat.”

Shirly Maimon, owner of a gallery and design studio in Tel Aviv’s Florentin neighborhood, has been living in a single-person unit at the hostel for the past six weeks. She moved there because the apartment she used to rent had become too expensive. She says the hostel is very convenient and even pampering in some ways, offering cleaning services, for example.

“Compared to an apartment in Tel Aviv, it’s cheap,” she reflects. “Although the kitchen is shared and that’s no fun, we manage. There’s a small community here and you can get to know people – though the turnover is quite high. I don’t know if I’ll continue to live in Tel Aviv, and that’s why this temporary arrangement is convenient and suitable for me. I’ll stay at the Abraham until I decide,” she adds.

The Abraham Hostel in Tel Aviv. It would be a "catastrophe" to close it down, says Maoz Inon.Credit: Daniel Tchetchik

‘We’re not a B&B’

Tel Aviv’s Spot Hostel and Jerusalem’s Post Hostel are in the same boat as Abraham Hostels. Spot’s Naama Shviki explains that 32 rooms in the facility at Tel Aviv Port are currently long-term rentals. The price: 3,000 shekels a month. Who’s staying there? Some are renovating their apartments; others are young people afraid to commit to an expensive long-term rental. They there are the workers who find themselves in a difficult situation due to the lockdown. They rent single or double units. The kitchen is shared, as are the bathrooms and showers in this “pod hostel.”

The Post offers rentals for 2,500 shekels a month, though the demand there is smaller. According to the regulations, the dormitory space is closed and only the small rooms are available.

The Post Hostel in Jerusalem.Credit: Ben Rothstein and Hagar Doppelt

The Tel Aviv facilities belonging to the Brown Hotels chain – WOM on Allenby, Dave on Levinsky and the Townhouse Boutique Hotel and Residence near Rothschild Boulevard – helped launch this phenomenon after making their rooms available for long-term rental back in July. The price is about 3,500 shekels a month, which is about an eighth the usual price. The structure and design of the hotels dictates a communal existence: Though each tenant gets their own bedroom, they share essential spaces like the kitchen and living room.

The Hotel Crowne Plaza in Tel Aviv is also renting out rooms on a monthly basis, with 40 units currently occupied. The monthly cost for a standard room is 5,800 shekels, which includes use of all the hotel facilities. The chain’s hotels in Jerusalem and the Dead Sea are closed, but the rental market has allowed the Tel Aviv branch to remain open.

The Spot Hostel in Tel Aviv Port.Credit: Ben Rothstein and Hagar Doppelt

Leon Avigad, founder and co-owner of the Brown Hotels chain, tells Haaretz that this initiative began due to public demand. “We decided that if we’re going into it – we’re going all-in,” he says. “We invested in a renovation of the shared spaces. We made the process simple and convenient for those making reservations.

“It has grown in recent months, and now we have five hotels that are operating this way in Tel Aviv,” he says, noting that “a sixth is on the way. We’re wondering whether to operate such a hotel in Jerusalem too.”

Avigad explains, however, that adding a kitchenette to the rooms would be a step too far for him. “We’re not a B&B,” he says. “We want to give you a feeling that we’re hosting you.”

He believes the tourism market will only completely recover in 2024, and says the test is whether hoteliers will be able to demonstrate enough flexibility to cope with the situation till then. “Our ethos in the Brown chain is encounters and company. What’s happening now is the most antisocial and contradictory thing to who we are. But we’ll be able to cope,” he says.

A room in the Spot Hostel.Credit: Ben Rothstein and Hagar Doppelt

This prompts a question: If it runs contrary to the company’s very being, why did they pursue it? “We won’t sit and wait idly by for government support that isn’t coming,” Avigad says. “We’re thinking creatively – and long-term rental is now paying the rent on several hotels. I’m enviously watching what’s happening in Europe, where governments are helping hoteliers. Here, we’ve realized there’s no point in waiting for them.”

Your heart goes out to the businessmen and women featured in this story. After all, they’re all entrepreneurs with courage and daring who started high-risk ventures. Last year, they looked like dizzying successes: it was impossible to get a room in these hotels. Investors wooed them. Other entrepreneurs considered how to imitate them.

Now they’re trying to keep water flowing in the pipes so they won’t rust. They all entered this field because they wanted to offer hospitality, and now they’re functioning – for lack of choice and contrary to their wishes – as realtors. For them, the house truly is falling in.

Leon Avigad from the Brown Hotels chain. “We decided that if we’re going into it – we’re going all-in.”Credit: Eyal Toueg

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