Israeli Luxury Hotels on the rise


The Ritz-Carlton Hotel Co. will open its first Israel property in mid-December, joining a select group of luxury hotels that have opened in the country during the past decade.  

Located in Herzliya, an upscale shorefront town north of Tel Aviv known for its beautiful beaches, marina and high-tech center, the hotel will set “new standards in luxury hospitality,” according to Gadi Hassin, the hotel’s general manager. 

Perhaps just as important, the hotel’s construction reflects the fact that as the security situation in Israel has improved dramatically — bringing with it a record-breaking number of tourists — so, too, has the quality of high-end short-term and residential hotel accommodations. 

What sets these properties apart is the level of design, amenities, service and location. Most afford heart-stopping views: the Mediterranean Sea, the Old City of Jerusalem or one-of-a-kind nature spots in Israel. 

Hoping to attract as wide a clientele as possible, the larger hotels offer a wide range of conference and business facilities, luxury spas and fitness centers. Several house a top-notch restaurant that’s as popular with local diners as it is with hotel guests.

Eran Nitzan, who heads the infrastructure and investment department at Israel’s Ministry of Tourism, told the Journal that about 10 large luxury hotels have been built in the country during the past decade. A greater number of less-luxurious properties also have been built during this period, as have numerous small four- and five-star boutique hotels, many of them in Tel Aviv.  

Nitzan explained that the ministry has long provided “incentive” grants 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. 

Shmuel Zurel, director general of the Israel Hotel Association, said roughly 3,500 hotel rooms, have been built in Israel during that period, most in the “high midclass to luxurious” categories — a relatively small number compared to the average 2,000 rooms built annually in places like Eilat, the Dead Sea and Jerusalem between the late 1980s and 2000. That’s when the second Palestinian intifada broke out, leaving many hotels at less-than-full capacity. 

But those difficult days are long gone, Nitzan said. 

Ritz-Carlton Herzliya entrance

“[Today] there is a demand for luxury rooms, especially among Jews visiting Israel as well as business people, who want to stay in the best locations,” he said.

The land and construction costs at these locations are very, very high, he said, so newer property developers invariably choose to build high-end hotels that offer a greater return.  Such was the case with the properties in the gentrified Mamilla neighborhood of Jerusalem, home to the David Citadel Hotel, the more recent 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.  

There may be turmoil throughout the greater Middle East, but Nitzan said the outlook is good for tourism in Israel.

“We think the number of tourists will continue to grow, and the investors believe this as well,” Nitzan said.

Both Zurel and Nitzan say the fact that top-of-the-line hotel management firms like Ritz-Carlton and Waldorf Astoria — whose striking Jerusalem property will open soon — is a reflection of just how desirable a destination Israel has become in recent years. 

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

Ritz-Carlton apartment living room Photo courtesy of the Ritz-Carlton Hotel Co.

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

Spread throughout three floors, the hotel spa will feature six treatment rooms utilizing Shiseido beauty products, a couples treatment room, a Turkish bath, dry and wet saunas, and an ocean-front spa lounge where guests can relax before and after their treatments. There also will be a fitness center with a sea view. 

Other amenities will include a rooftop pool and bar, as well as a branch of the Tel Aviv celebrity restaurant Herbert Samuel — the first kosher Ritz-Carlton restaurant in the world. And because this is Israel, the hotel will have a Shabbat elevator and standard keys for Sabbath-observing guests who will not use electronic keys on Shabbat. 

The Ritz-Carlton, Ron emphasized, “wants everyone to feel welcome.”

Peres praises U.S. at 4th of July celebration


The United States “remains a beacon of hope for the values of freedom, peace and justice around the globe,” Israeli President Shimon Peres said at a Fourth of July celebration.

US Ambassador to Israel Dan Shapiro hosted his annual Independence Day party Thursday in the backyard of the ambassador’s residence in Herzliya. The area was decorated in red, white and blue balloons and traditional bunting. Food stands represented American eats including McDonald’s, Coca-Cola, Subway and Domino’s Pizza.

“Your history is a history of giving. America is the greatest giver in modern history. A bastion of democracy and peace,” Peres said.

“Israel, though small in size, will remain great in its commitment of friendship to America.  Israel could not have a better friend than America,” he said.

Peres called for a two-state solution between Israel and the Palestinians, and reiterated Israel’s commitment to backing U.S. Secretary of State John Kerry’s efforts to bring both sides to the peace negotiating table.

Peres concluded: “Both our countries are on a moving journey to improve the world. Tikkun Olam. This journey goes on. Until the Promised Land becomes a Land of Promise.

God bless America. God bless Israel. And God bless peace.”

Startup classroom


In a twist on the classic academic approach to entrepreneurship, Israeli universities are trending toward classroom-based incubators that allow students to put theory to the test in a sheltering atmosphere. After all, what better way to learn how to start a business than to actually start one?

The formula clearly works. Among the successful companies launched while their founders were in the Zell Entrepreneurship Program at Interdisciplinary Center (IDC), a private Herzliya university, are the eBay-acquired Gifts Project and Conduit-acquired Wibiya. LabPixies, Google’s first Israeli acquisition, was started by Zell alumni.

“The goal is to strike a balance between hands-on practice and academic methodology,” said Liat Aaronson, executive director of the 12-year-old program, which annually accepts 20 to 22 qualified seniors.

For Moran Nir, her 2009 academic year in the entrepreneurship center was key to her success with FunkKit, a customized sneaker-sticker product now sold online and in stores in 10 countries and growing.

“I always say that I’m not sure it would have happened without Zell,” she said. “It gives you a safety net so if your idea doesn’t work, nothing bad happens. And it introduced us to amazing, helpful people in the legal, financial and product development fields. The networking was the best aspect.”

Israel is a logical place for Zell and newer programs like it. The country boasts more high-tech startups and venture capital activity per person than any other nation in the world, and has produced more startups than Japan, China, India, the United Kingdom, Canada and South Korea.

In 2004, the Technion-Israel Institute of Technology’s Bronica Entrepreneurship Center opened for undergraduates, graduate students, alumni and faculty.

“Our program is an entrepreneurship journey in three steps,” explained Uzi de Haan, who left a long career in industry to lead Bronica. “At each step, the commitment to start one’s own venture increases.”

For those who continue to the stage of actually launching a business, “We give them a link with the high-tech ecosystem, with accelerators, consultancy services such as Microsoft and private workshops for teams we feel are serious,” de Haan said. “Every year we have about 140 alumni teams, ending with maybe 30 potential candidates for starting ventures.”

Bronica also sponsors BizTech, a yearly business plan competition open to student or alumni teams from any university. 

“So far, 20 new companies have come out of that competition — one already had an exit and another has $20 million invested in it,” de Haan said.

This year, the Technion will offer a two-month pre-accelerator to all eight or 10 finalist teams. They’ll get mentoring, a business loan and workspace.

“If it works well, next year we’ll open it to foreign universities that have similar competitions, so they can send their best teams to Israel to expose them to Israelis and Israel’s ‘startup nation’ culture in the summer,” de Haan said.

The Bronica center works closely with the Technion’s master of business administration (MBA) department. “Some of the MBA students are interns for the companies in our accelerator,” de Haan said.

Next fall, the Technion will welcome its first class of international Start-uP MBA students.

“We conducted extensive research before deciding to launch this, because it is quite a unique academic program,” said Avital Regev Siman-Tov, managing director of the Technion’s MBA programs. She learned for herself that traditional courses are not sufficient for budding business people.

“I have a Ph.D. in medical sciences and an MBA, and my theoretical tools gave me the opportunity to be the CEO of a startup — and then what? The real world is a completely different arena,” Regev Siman-Tov said.

“Start-uP MBA will give a student the tools to use his own ideas to establish a company during the program itself, with the assistance of our academic and industry contacts. We will help students commercialize innovations, write business plans and follow up with internships.”

Israel’s startup reputation is the prime selling point for this program, which will be based not on the Technion’s Haifa campus but at the recently opened Sarona “lifestyle center” in Tel Aviv to facilitate field trips to startup country.

Students will be able to take courses at the new Technion-Cornell campus in New York City, and as the only Israeli member in Yale University’s Global Network for Advanced Management, Start-uP MBA will have collaborations with leading business schools around the world.

“Usually in global entrepreneurship programs they teach you how to behave in the global arena, while here we say, ‘Come and study how it is done in the startup nation,’ ” Regev Siman-Tov said.

Because not all ideas can become blockbusters, Zell’s Aaronson prefers to look at university entrepreneurship programs as people accelerators rather than venture accelerators.

“Sometimes success comes from failure,” she said. “Every year, one to four companies come out of the program, and a lot of those are still around. The ones that make the news have made an exit, but 20-some companies launched at Zell, or by Zell alumni, are employing people and developing products.”

Last year’s class included the founders of Roomer, a site for buying and selling hotel reservations that won $2 million in seed money. Feex, a crowd-sourced financial fee-reduction site, attracted its first investment from the founder of the hugely popular Waze, who mentored Feex’s founders in Zell.

Aaronson is pleased that other Israeli institutions of higher learning are starting similar academic programs (such as The Bengis Center for Entrepreneurship and Management at Ben-Gurion University) or community entrepreneurship nonprofits like Sif-Tech at the Hebrew University and StarTAU at Tel Aviv University.

“I believe the more entrepreneurs who are practicing safely in the university context, the better,” she said.

Serial entrepreneur Shimmy Zimels consulted with Aaronson after he agreed to head a new entrepreneurial program this year at the Jerusalem College of Technology, which offers participants stipends from a Canadian donor.

“It’s a totally new program — no other university in Israel gives funding in addition to educational support and mentoring for startup projects,” Zimels said.

During the fall semester, 25 applicants presented their business ideas, and during the spring semester the handful chosen as having the most potential are meeting with mentors and faculty members to get their concepts off the ground.

Ayla Matalon, who teaches at IDC, the Technion and Tel Aviv University and runs the MIT Enterprise Forum of Israel, pioneered the idea of combining academic studies with practical learning. Like Siman-Tov, she had found that the working world bore little resemblance to what she’d learned in the classroom.

“I always thought it is important to understand things from the roots and learn by action,” she said. “If you want to be a shoemaker, you become a shoemaker assistant first. Even if not all the students become entrepreneurs, they become much more aware of processes in the business environment that they should be aware of.” 

Israeli defense official: ‘Shocking dictatorship’ has grown in Egypt


Amos Gilad, an Israeli defense official, said that “a shocking dictatorship has grown in Egypt,” according to reports in Israeli media.

Gilad, a department director at the Ministry of Defence, reportedly told students in Herzliya that Israel and Egypt “are not talking” to each other under Mohammed Morsi, the new Egyptian president who hails from the Muslim Brotherhood.

“There’s no talking between our diplomatic corps and theirs, and I believe there will not be in the future. [Morsi] won’t talk with us,” he said, according to Israel’s Army Radio.

“We need to keep the peace treaty with Egypt at any price,” he said, adding that the country did not want to have to send troops against Egypt.

On the Palestinian issue, he said that chances of reaching peace were slim, but cooperation on security issues should be preserved.

“Without the Palestinian Authority, Hamas would ascend to power,” he said. “We have to maintain a connection and a process to keep the cooperation on security issues. This is why we need a process.”

Herzliya votes to run buses on Shabbat


The city of Herzliya will ask Israel’s Ministry of Transportation to approve a permit to run city buses on Shabbat.

The Herzliya City Council voted 12-5 on Tuesday to approve a proposal to operate a bus line from the city center, past a major mall to the beach on Saturdays, the Jewish Sabbath.

City officials reportedly told Israeli media said it would take its request to the Supreme Court if it is denied by the ministry.

The council’s vote comes a month after the Tel Aviv Municipal Council approved a similar measure. 

At the time, the Transportation Ministry said in a statement that “There is a decades-old status quo regarding operation of public transportation on Shabbat, and the Transportation Ministry does not intend to violate it.”

In general, public transportation does not operate on the Sabbath in Israel, except in Haifa and Eilat on a limited basis. It is part of the “status quo,” a doctrine that regulates the public relationship between the religious and secular positions in Israel.

Israel says Iran seeking U.S.-range missile


Israel said on Thursday Iran had been working on developing a missile capable of striking the United States at a military base rocked by a deadly explosion three months ago.

The blast on Nov. 12 killed 17 Iranian troops, including an officer regarded as the architect of Iran’s missile defenses. Iran said at the time the explosion at the facility, 45 km (28 miles) from Tehran, was an accident and occurred during research on weapons that could strike Israel.

Vice Prime Minister Moshe Ya’alon, addressing Israel’s annual Herzliya security conference, challenged the Iranian account that the weapons project was focused on targeting Israel, and implied Iran was seeking to extend its strike range fourfold.

He said the base was a research and development facility where Iran “was preparing to produce or develop a missile with a range of 10,000 km (6,000 miles) … aimed at the ‘Great Satan’, the United States of America, and not us”.

Ya’alon, who is also minister of strategic affairs, gave no other details nor relate his remarks to the cause of the explosion.

Analysts currently estimate the longest range of an Iranian missile to be about 2,400 km, capable of reaching Israel and Europe. Israeli leaders are keen to persuade any allies who do not share their assessment of the risk posed by Iran that a nuclear-armed Islamic Republic would also threaten the West.

Israel has made little comment on accusations by Tehran that its agents along with those of its Western allies are waging a covert war against Iran’s nuclear programme.

Iran denies Israeli and Western allegations that it is seeking to build atomic weapons, saying it is enriching uranium to generate electricity and for other peaceful purposes.

“MILESTONE”

In a Nov. 28 report on the explosion at the Iranian base, the Institute for Science and International Security (ISIS), said it had learned the blast occurred “as Iran had achieved a major milestone in the development of a new missile”.

The Washington-based ISIS, founded by nuclear expert David Albright, said Iran was apparently performing a volatile procedure involving a missile engine when the explosion took place.

Israeli Prime Minister Benjamin Netanyahu, pressing for stronger international sanctions against Tehran, has said repeatedly that a nuclear-armed Iran would pose a threat not only to Israel but to the United States and Europe as well.

Israel is widely believed to be the Middle East’s only nuclear power and to have developed missiles capable of striking Iran. It has said all military options are open in preventing a nuclear-armed Iran.

In his address, Ya’alon, a former chief of staff of the Israeli military, was dismissive of arguments that underground Iranian nuclear sites may be invulnerable to so-called “bunker-buster” bombs.

Speaking in general terms, he said: “From my military experience, human beings will know how to penetrate any installation protected by other human beings. Ultimately all the facilities can be hit.”

Writing by Jeffrey Heller

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