Dan Hotels invests in Eilat luxury tents to gear up for next tourist generation

The Dan Hotel Group represents one of the biggest and oldest names in Israel’s hotel industry. By next summer, it will also be behind a massive investment of tens of millions of shekels in the glamping sector, with tents ranging from basic to super luxury on a campsite in the southern resort town of Eilat.

First popularized by music festivals, glamping — a portmanteau of glamor and camping — has become a growing segment of the hospitality industry in recent years, with a market size value of $2.78 billion in 2021 and with projected growth to nearly $6 billion by 2030.

It describes hospitality options, often in the open air, that include camping experiences combined with amenities (such as indoor plumbing and Wi-Fi) and more traditional hospitality services, in tents, yurts, treehouses, and other alternatives to hotel rooms.

As the sector grows worldwide, Israel has been no exception.

Dan will become the first major hotel chain to jump into this space as it works to establish a year-round campsite with air-conditioned tents of various sizes, some with private pools, together with common areas for dining and drinking, spiritual meditation spaces, and water sports options, all across from the Coral Beach Nature Reserve in Eilat.

The aim is to make the construction and ongoing operation of the site as green as possible, and to offer a real alternative to the other Eilat resort options, including those offered by Dan itself.

Also in the pipeline for Dan is a new hotel in the Blue Bay area of northern Netanya, set to open in 2025.

This project is billed as an ultra-luxury spa hotel and marks Dan’s first investment in this part of the Israeli coast.

Dan’s portfolio is already quite diverse, from the King David Hotel in Jerusalem with its old-time glamor to the colorful, beachfront Dan Tel Aviv, a landmark on the city’s shoreline, and the more affordable hotel-workspace combo Link Hotel & Hub in central Tel Aviv.

With the addition of luxury tents to its offerings, the hotel group says it is tapping into an existing demand for new experiences.

“The travelers who want to stay at the King David or in north Netanya are not necessarily different from those seeking a luxury tent by the Red Sea,” said Tali Keidar, VP of Marketing and Digital for the Dan Hotel Group.

“The customers for both may just be looking for different kinds of travel experiences,” she told The Times of Israel in a recent interview.

The group wants Dan to stand for every kind of travel adventure and is sticking with a single umbrella, rather than developing different sub-brands like some of its competitors.

In the time that international tourists have been away because of the pandemic, Dan has worked to home in on what travelers are looking for, and it was confident that this investment would pay off once tourists are able to return in full force.

“A good room and a great breakfast [are] now basic,” said Keidar.

Dan has earned a stellar reputation for its vast Israeli breakfast buffets, but combined with decent rooms, “it’s not enough on its own.”

“Tourists are looking for experiences, they are looking for content, and we are seeing the market split, with the middle losing ground. At the top end, people want something truly unique, and they are happy to pay more for it. At the other end are those who want good value for money, a good location, and often a connection to the urban environment,” she explained.

In 2018, Dan added the Link Hotel and Hub to its portfolio in Tel Aviv.

The hotel was designed for younger businesspeople to work in while travel. It has no pool, no spa, no dedicated bellboy or concierge, but instead offers a curated display of Tel Aviv’s street art throughout the hotel, shared and private workspace areas, a gym, and a pool table.

Another more recent addition is Dan’s Ruth hotel in the northern city of Safed. The hotel is firmly rooted in the region, occupying the site of an 800-year-old inn with vast views of the upper Galilee. It sources food from local farmers, including local wines and cheeses, and offers guests regular tasting sessions as a way to explore the region.

Sustainability has also become an important theme for the Dan Group. The group is working on phasing out single-use plastics from its hotels, donating surplus food to charities, and wherever possible working with recyclable materials.

When it comes to building new hotels, Keidar said the group is “thinking green and sustainable across the whole construction chain.”

The other key trend informing Dan’s renaissance is the self-service that young people in particular want as a standard part of any hotel experience.

This means being able to check in and check out via apps, having a room key on their phone, and being able to make reservations without making a call.

These efforts are paying off for the group.

In 2021, despite COVID restrictions, Dan reported earnings (EBITDA) of $103.2 million.

Over the quarter to March 2022, Dan saw growth of more than 66% on the previous year. The group’s assets are valued at above $2.1 billion.

For 2022, Dan is currently at around 70% of where it was in 2019 in terms of occupancy, even though the skies above Israel did not open until March.

In September, Keidar said, there was not a single spare room in Tel Aviv as a result of business conferences.

Keidar said that the Dan Group believes the travel world has changed irrevocably and recognizes its need to change with it. There is a pipeline of new projects, including experimentation with robots to help clean rooms.

The group is also looking to attract more local tourists and Israeli staycationers and reach a ratio of about 50:50 with international travelers, said Keidar.

With over 4,000 rooms, Dan Hotels is widely recognized as a leader in the luxury market.

But the group also has an older, more traditional hotel footprint. And competition is heating up — stimulated by the government’s stated ambition to reach 10 million visitors a year by 2030.

Some international chains are taking their first steps.

David Kempinski opened a luxury hotel in Tel Aviv this past spring and Six Senses launched its luxury spa and hotel getaway in the Negev, after 10 years of development.

Both are in direct competition with Dan for luxury tourist hotel experiences.

Local competitors Fattal and Isrotel have plans for new hospitality projects in the pipeline and rapidly developing boutique chains such as Brown Hotels, Selina, and Atlas are already making headway with innovations around service and amenities in their offerings targeted at a younger clientele.

To compete and stay ahead, Dan Hotels will increasingly need to tap into what modern travelers and visitors are looking for in a hotel experience.