Eilat's Princess Hotel Set to Reopen After Over a Decade of Closure

The Princess Hotel in Eilat, located near the Taba terminal and once one of Israel's premier luxury hotels, is expected to resume operations next summer. The hotel, which closed in 2015 after nearly two decades of prominence, has remained abandoned for more than ten years. This revival is part of a new hotel management network being established by Airport City, controlled by Kobi Maimon and Haim Tzuf, in partnership with Avia Magen, former CEO of the Fattal Hotel Group.

The Princess Hotel was originally built in 1992 by German-Jewish businessman Alexander Tesler and featured 419 rooms with a prime location on Eilat's southern beach. However, the hotel suffered severe financial difficulties following the Second Intifada and other tourism industry crises, accumulating debts of 197 million shekels. In 2011, Isrotel took over management but the deal was blocked by antitrust authorities due to concerns over a duopoly in Eilat's hotel market.

In 2015, the hotel was placed under temporary receivership due to a 190 million shekel debt to Bank Hapoalim. After a bidding process, the company Netzba (later merged with Airport City) purchased the hotel for 220 million shekels. Netzba immediately closed the hotel for renovations, but these were never completed. In 2017, Netzba bought Tesler's minority stake for 25 million shekels, with an additional 10 million shekels promised upon the hotel's reopening. A fire in December 2019 further delayed renovation efforts.

The new management network plans to operate approximately 1,100 rooms and suites across several luxury hotels in Israel, including the Princess Hotel in Eilat, which will feature 420 rooms and suites. The network will be jointly owned by Avia Magen and Airport City, with Magen leading the hotel management operations. This development offers a hopeful prospect for the long-dormant Princess Hotel and the Eilat tourism sector.