Isrotel, the prominent Israeli hotel chain under the Lewis family's control and managed by Lior Raviv, is making significant strides in its international expansion efforts. The company has successfully acquired 50% ownership in three hotels in Athens, including one with two separate wings, and an additional hotel in Thessaloniki boasting 625 rooms. The total purchase price for these acquisitions amounts to 32 million euros (NIS 126 million), financed from Isrotel's internal funds. The identity of the sellers remains undisclosed, with half of the purchase price set to be transferred to them, while the remaining funds will replace existing owner loans for the properties.
These Greek hotels, operating under a new brand yet to be disclosed, will mark Isrotel's entry into the international market, focusing on the medium-priced range to cater to a broader demographic of tourists. Currently operating exclusively in Israel with 23 hotels and approximately 4,900 rooms, Isrotel's move abroad is seen as a strategic measure to diversify risks and tap into opportunities beyond the confines of the Israeli tourism industry.
Isrotel's expansion strategy began last year with the acquisition of two hotels in Rome—White City and Phoenix—costing 77 million euros and 47 million euros, respectively. These Roman properties, set to open in early 2025 after renovations, will operate in the luxury category, in contrast to the more moderately priced hotels in Greece.
The push into the Greek market is not unique to Isrotel, as other Israeli companies have also set their sights on the country. Fatal, Isrotel's larger competitor in Israel, already operates two hotels in Athens and is constructing an additional five. Similarly, Israel Canada has acquired two hotels in Athens and one on the island of Paros. Israir, the Israeli airline, recently completed the purchase of a 25% stake in five Greek hotels, managed by the Israeli hotel chain Brown.
The choice of Greece as an expansion destination is influenced by economic factors. The economic and political crises in Greece over the past decade, coupled with the subsequent impact of the COVID-19 pandemic, have rendered hotel real estate relatively inexpensive compared to other European countries. Additionally, the lower cost of living for tourists in Greece enhances its appeal as a destination. In 2022, Greece welcomed approximately 28 million tourists, making it the ninth most visited destination globally. With 30 million tourists recorded by the end of September and expectations to surpass pre-pandemic levels by year-end, Greece's attractiveness for tourism continues to rise. Isrotel's move into the Greek market underscores its commitment to establishing a robust international presence and mitigating risks associated with the Israeli tourism industry's challenges.