Israeli Government Approves $7.7 Million Plan to Boost Hotel Development in West Bank

The Israeli government has approved a historic plan led by Tourism Minister Haim Katz to accelerate hotel construction in the West Bank, allocating 27 million shekels (approximately $7.7 million) to remove planning barriers and provide significant grants to developers. The plan aims to unlock the region's tourism potential by facilitating statutory planning for hotel facilities and enabling land marketing and rights realization. Seven million shekels from the Tourism Ministry's regular budget will be distributed evenly from 2026 to 2030 to support these efforts.

In addition, 20 million shekels from the ministry's development budget will fund grants covering up to 28% of approved investment plans for building, converting, or expanding hotel accommodations. This includes a base grant of 20% plus an 8% administrative grant for projects with building permits. A dedicated committee appointed by the ministry's director general will oversee grant distribution under a specific procedure to be published.

The initiative addresses major obstacles such as the lack of available planning stock and economic feasibility gaps that have hindered tourism infrastructure investment in the West Bank. Over the past decade, only about 115 million shekels were invested in tourism infrastructure there, compared to over 2 billion shekels in other parts of Israel. The plan aims to increase lodging capacity, transform the West Bank from a day-trip destination into a place for overnight stays, extend tourist visits, and boost the local economy.

This new program complements a previous government decision from May 2025, also led by Katz, which approved 50 million shekels for public tourism infrastructure development in the area. The move comes amid a significant rise in international tourism to Israel, with a 26% increase in passenger traffic during the first nine months of 2025, totaling approximately 13.7 million visitors. The plan is expected to further stimulate tourism growth in the West Bank region.