At the beginning of the week, the Azrieli Group announced that it had purchased the “Red Rock” hotel on the north coast of Eilat for 130 million shekels. The company even stated that it would invest 500 to 600 million NIS in building a new hotel in the complex – a considerable sum, certainly given that tourism in Eilat has not been able to increase since the corona virus: in 2022, Eilat was responsible for 2.1% of national tourist revenue, and Israeli revenues accounted for only 33% of national revenue.
If so, what makes a company like Azrieli choose Eilat, and a hotel that has not functioned as such for years, as its first hotel project in the southern city? There are two answers to this: location and a bit of optimism.
As mentioned, the Red Rock Hotel has not been active for many years and has recently been used as a residence for employees of the neighboring Club Hotel. Azrieli’s belief in the complex comes from where it is located: “The strategic location of the property, on the coast of Eilat, is unique,” explain sources close to the company. “In recent years, no hotel has been built on the coast of the city. The company firmly believes in this location and plans to build a five-story hotel, which will include up to 300 rooms.”
Recall that this will be the fourth hotel that Azrieli will own, after the planned hotel in the emerging Spiral Tower in Tel Aviv, the Mount Zion Hotel in Jerusalem, and a planned hotel in Modi’in. Apparently, the company is “relying” on the fact that foreign tourists will also return to the city. The Eilat hotel will therefore include a wide range of rooms that will be suitable not only for families and groups of friends, a typical feature of local tourism.
The purchase of the existing hotel also includes additional rights, including the right to operate the section of the beach adjacent to the property, and the possibility of connecting the new hotel to be built with the nearby Mol Hayam shopping center, which Azrieli purchased in October 2021, is also under consideration among the various uses,” insiders said.
We note that the purchase of the land “revives” the existing plan, which had already been approved in March 1993. Building instructions permit only a six-story hotel, as when it was approved, it was subject to restrictions of the Eilat airport, which operated not far from there. Despite this, it seems that Azrieli will not work to increase the number of floors or raise the building beyond what is indicated in the plan.
