Navneet Bali, Chairman of Meininger Hotels shares his view of the investment climate available to international hoteliers looking to expand into Israel. As new airlines bring more tourists to the country, and with supply increasing (but at a much slower pace), this is a very exciting and attractive time to enter the hotel market in Israel, especially within the budget/economy sector. Navneet will share his insights on-stage during the International Hotelier Keynote: Why Israel is a Key Market for Innovation on Tuesday 20 November at 14:20.
Q. How would you describe the hotel investment opportunity in Israel?
A. We see demand growth as being positive for Israel with new airlines bring more tourists to Israel. Supply increases are also taking place but at a slower pace. Overall the supply demand dynamic is positive for hotel investment. We also feel that the supply/demand dynamic also favours the budget/economy or value orientated customer for which little supply of good quality exists.
Q. What are your company’s plans for the market?
A. We feel the demand for MEININGER‘s unique hostel and hotel hybrid product will appeal to the younger lifestyle segment as well as families. MEININGER tends to initially focus on markers where there is demand for both leisure and business travellers; Cities such as Tel Aviv and Jerusalem would be in our priorities to start with.
Q. What are the biggest challenges faced by international hoteliers looking to enter the Israel market?
A. In general, international hoteliers need good locations for their existing and potential customers which are also acceptable to their investors from a financial perspective. Balancing the cost of land on acceptable sites with the return requirements is always a challenge. Therefore, choosing the right model or brand which can provide a superior return is necessary for a successful hotel investment. The hostel and hybrid model in our view is ideal from this perspective as it has shown that it provides a superior return while offering exciting customer experiences, particularly to younger travellers.
Q. What existing hotel brands or properties do you think are most interesting to watch in Israel?
A. There are few if any quality hotels in the mid-market, economy and hotel/hybrid hostel sectors. We think this represents an opportunity and we would like to see how these sectors develop in the future.
Q. What is keeping you busy at the moment?
A. MEININGER opened 8 new hotels in the last 12 months increasing its portfolio from 17 to 24 hotels. With another 7 hotels currently being under construction and opening in each of 2019 and 2020 keeps the entire team busy.
Q. Who or what is the biggest inspiration guiding your career?
A. I started my hotel career with the Taj Group of Hotels which is part of the Tata Group in India. The Tata group with its premier position in India has been a model of integrity with strong employee related and environmental practices. The Taj Group showed how you could create a quality hotel product with fast growth through a young and dynamic team. Both had visionary leaders: Mr JRD Tata and Mr Ajit Kerkar, who showed how inspirational leadership combined with concern for human values can create successful businesses.
Q. What would you recommend a new visitor to Israel to do during their stay?
A. Visit great and historic sites like Jerusalem and also experience the vitality of the “start-up” country through the wonderful restaurants and bars of Tel Aviv which creates a vibrant atmosphere.
Q. What are you most looking forward to at IHIS?
A. To meeting local Israeli hoteliers and investors as well as experiencing the vibrancy of Israel as I expect to see in Tel Aviv as well as in visiting Jerusalem.