An interview with the man who has shaped Tel Aviv's boutique hotel scene

Written by
Time Out Israel Editors

Michael Hay has contributed to the completion of close to 20 hotels on Tel Aviv's changing landscape

How did you get into the local hospitality business?

I grew up in Tel Aviv, and from age 10 I discovered that it was possible to bail out of class. I left school and began to wander around the city hotels of the early '80s - Hilton, Sheraton, Diplomat, Carlton. I used to sit in the lobby, climb the elevators. Cosmopolitanism impressed me; the people who spoke foreign languages, the code of dress, the quiet and the conduct. I knew that I would be in this field. 

So your childhood dream become your occupation?

After the army, I worked at Club Med in Israel and went on to a Swiss hotel school. From there I moved to NYU and completed a bachelor's degree in hotel management. I worked at luxury hotels like Pierre and the Mayflower Inn at the desk or in junior management positions. In 1999, I joined the HVS company, which specializes in appraising and researching feasibility and deals with the business aspect of hotel development. That is where I acquired the experience and understanding of the field from the economic aspect. During this work, I gained knowledge in the American hotel market in general and in New York in particular. In 2001, I was supposed to work at Lehman Brothers in the banking field, but 9/11 changed my plans and I decided to leave New York a few months later. I went to Paris and worked with Israeli investors to identify trends in buying and investing in the local market. In 2004, I decided to return to Tel Aviv, in light of the understanding that the Israeli market, which had begun to recover from the crisis of the second intifada, had great potential.

Fabric Hotel © Assaf Pinchuk

How did the boutique hotel scene develop in Tel Aviv?

Tel Aviv in the past was a city of pensions and small hotels. In the 1960s and 1970s, large hotels began to be built on the coastline, which replaced the family hotels. The early 2000s heralded the change, with the opening of the Cinema Hotel in Dizengoff Square - a project of the Goldschmidt family that took a rundown cinema building and transformed it into a hotel. The historical preservation of the building was the main narrative of the hotel - a concept hotel inspired by nostalgic cinema. The Atlas network that operates the hotel identified the power and interest that the market discovers in a hotel of this type. In 2006, the company I owned started working with the Atlas network and transformed each of its hotels into hotels with a unique experience. The experience, as opposed to the accommodation solution, is at the core. From there, year after year, project after project, the market began to develop and expand and change. It was a response to something that developed in the 1990s in New York and in European capitals, with hotels becoming an integral part of the urban experience.

How do you develop so many hotels and still have new ideas?

As a Tel Avivian, my advantage is to think about a certain aspect of the city that is relevant to illuminate and present. Thus, each hotel allows you to experience Tel Aviv from a different angle. It is related to the location, the structure, the target audience. Each hotel is a magnifying glass of another aspect of the city, creating a variety of distinct urban experiences that transform what was once simply just 'a lodging solution' into an experience. For some examples, Yam Hotel represents Tel Aviv as a coastal city; Market House speaks of the bohemian experience of Jaffa; Hotel Saul is a local neighborhood hotel; Fabrik is a salon for residents of the neighborhood that brings locals together with tourism; and the Norman Hotel provides a taste of the elegance in the heart of Tel Aviv.

What makes Tel Aviv a hot tourist destination?

It is the winning combination of the weather, culture, culinary aspects, location and spirit of the people. There are not many cities in the world that simultaneously constitute such cultural, social, economic and business options such as Tel Aviv, in a location that is on the sea, with the characteristics of leisure, yet still offer serious business opportunities. The speed at which you can move from work to leisure is rare.

Market House © Nathan Dvir

Where do you place Tel Aviv in relation to other cities in the world in the boutique hotels field?

I think today, unlike 10 years ago, Tel Aviv is at the forefront and has nothing to be ashamed of. Today, this is a city where at least 40% of the hotels are considered boutique and lifestyle hotels and this is a high percentage compared to other cities in the world. We also have a high percentage of independent and non-branded hotels. Even at the technological level, quite a few hotels already use technology enabling them to contact the guest before, during and after the stay, and take advantage of Israeli high-tech. However, there is still more to develop especially with respect to luxury hotels and popular and young hotels.

What is the guest looking for today?
The interest of tourism in Tel Aviv has only developed in the past ten years. Until then, people would come to Israel and travel to Jerusalem, Nazareth, etc. Today, many experience Israel through Tel Aviv. 

How has the hotel market changed in the era of Airbnb?

Airbnb is a dominant factor in tourism in Tel Aviv. Apart from the fact that the issue is not regulated legally, it brought two significant positive things: firstly, the tourist's desire to spend time within a local environment - the tourist experiences the city within the most local and everyday fabric of the city and every neighborhood in the city is a place where tourists are hosted; and secondly, technologically, the hotel's standards have been inadvertently heightened. It has become important to interact with the guest from the reservation stage, to the actual stay, through to after the guests have left. It changed the way the guest communicates with the host. Here, the hotel market learned to respond to this and strengthened what it is good at it - the encounter between tourists and locals. This is an experience that Airbnb can't provide. Here, we develop technological tools so that we can also be with the guest and provide him with hotel services easily, with tools he is used to working with.

Yam Hotel © Sarit Goffen

What is the best way to implement these services?

In the Atlas hotel chain we are currently implementing "TheService", a digital platform that enables 100% personalization from the pre-order stage, during and after the stay. This platform allows the guest, with the help of the hotel, to create a personalized hospitality experience - from various services and products that the hotel offers through finding the best restaurants, events, tours and excursions. The platform constantly evolves into more advanced stages of personalization, in which it learns the characteristics of the guest and provides him with high-quality personal information, enabling the hotel to provide a personalized hosting experience. Thus, the hotel can be the ultimate host.

We have recently been informed of the arrival of international chains such as Meininger and Selena. How will these arrivals affect the market?

I think that the space of hostels and hybrid products that combine hostels and hotels is something that is lacking in the Tel Aviv market and the more there are, it will enrich and diversify the hotel product. Such an entry will create competition and an additional possibility for the visitor – which will stimulate the market to be more creative.

Where is the hotel business going?
The whole effect of 'temporary locales' is only getting stronger - one of the experiences that people are looking for is that of temporary localization. Whether a tourist comes for three days, a week or a month, he wants to feel local. The hotels will continue to perfect the desire to give guests the most authentic experience - to combine local businesses and to bring guests together with the Tel Aviv audience. Technology will also effect the field and sharpen the possibility of providing guests with a much more powerful and extensive experience - one that exceeds the boundaries of the hotel and makes the city a wider experience for the guest. The third thing is culinary options in hotels - what started as the best breakfasts in the city expands to restaurants and bars that are located within hotels and becomes an attraction for locals and tourists alike.

Mendeli © Sivan Askayo

What other project would you like to do in the city?

Beyond the projects in which I am involved today, I am interested in developing large projects that integrate into urban development spaces. When the city develops upwards, the next thing is to create the next generation of hotels - one that will create experiences that simultaneously fit those who work or live in the city and those who come to visit it. The goal is to create an experience of temporary residence, alongside permanent residence in shared spaces, culinary aspects, nightlife and more. 

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