Israel's Hotel Boom Expands Abroad Despite Shekel Strength

Israeli hotel companies are expanding abroad despite the strong shekel causing currency headwinds. Fattal, which operates 285 hotels mostly in Europe, reported a strong quarter when stripping out the currency effect. The company increased average daily revenue per room by 6% and opened 24 new hotels since June.

However, the strong shekel cut NIS 274 million from Fattal's quarterly revenue and NIS 107 million from its EBITDAR (earnings before interest, taxes, depreciation, amortization and rent). The company lowered its full-year forecast but saw a 6% rise in stock price following last week's earnings release.

Isrotel, Dan Hotels, and Israel Canada are also increasing their overseas presence. Isrotel reported an 11% increase in revenue to NIS 603 million and a 28% jump in EBITDAR to NIS 185 million this quarter, compared to last year's second quarter which was heavily affected by the first Israel-Iran war.

Analyst Shai Ezer of More Investment House attributed the difference between Fattal and Isrotel's performance to their locations. He stated that most of Fattal's activity is abroad, making it highly exposed to currency-exchange gaps.