New commission on banking competition created

A new inter-ministerial commission could introduce more competition between Israeli banks and restore power to the consumer. As a whole, the Israeli banking sector includes 19 commercial banks, but behind these 19 banks are in fact just five banking groups: Leumi, Hapoalim, Discount, Mizrahi-Tefahot and FIBI. And within this group of five, just 2 of them, Hapoalim and Leumi actually represent 58% of the total bank assets. In 2011, Israeli banks have generated overall NIS 25 billion in revenue from individuals (€5 billion), a progression of 14% over the previous 2 years.

Directed by the Bank Controller within the central bank, this new commission has to deliver its recommendations to the government within the next 120 days, i.e. by April 15th. The commission has to make a report to help "increase competition between banks, simplify banking products, empower consumers and improve credit services to households while at the same time ensuring the soundness of the banking sector". Indeed, in Israel, banks' funding comes primarily from deposits and not from the financial markets which means that the need for effective competition to lower prices is even more critical.

Yet, Israeli banks that have been able to withstand the crisis so far should not worry too much. In November 2006, a parliamentary committee had investigated measures to reduce excessive bank charges. Their recommendation was to remedy the lack of competition that drives prices of banking up by opening the market for bank deposits to new competitors, including foreign institutions. Since then a few foreign banks have entered the Israeli market, but only in the B2B space, or the higher end of the market like wealth management. Bank rates, meanwhile, have barely declined: between 2007 and 2011, households saved about NIS 34 a year (€7 euros) in bank charges.

So the question is now: will this new commission succeed where the previous ones have failed? Time will tell but we should not hold our breath.

Source Credit Israel

Sarona hoping to compete with Neve Tzedek

At the end of the summer the Ganei Sarona project is expected to open to the public - a new complex for commerce, recreation and entertainment located in the area of the 140-year-old Templer colony that has become part of the urban fabric of Tel Aviv. Sarona is not another ordinary commercial project, but the development of a significant and central piece of the city, 190 dunams (47 acres ) in size. Around the historic buildings and streets there are plans to build about 10 high-rise buildings that will include tens of thousands of square meters of housing, hotels, commerce and a convention center.

The 33 original houses of the colony, or what remains of them after over 60 years of ownership by the State of Israel, will be carefully preserved and used for new purposes: 27 will serve as shops, restaurants and cafes, and the other six will become a visitors' center, two museums and a unit to be leased to the Technion-Israel Institute of Technology. The preservation and development work now in full swing includes the rehabilitation of the local flora and the preservation of the mature trees that lend the place a special atmosphere. A new underground road will connect the main arteries surrounding the complex with underground parking lots and the Hashalom train station, along with a future light rail station on Yehudit Boulevard that will enable easy access via public transportation.

The project is being developed simultaneously by the Ganei Sarona management company, which operates under the aegis of the municipal Ahuzot Hahof corporation, and two groups of entrepreneurs: the Irani-Rogovin partnership and Ganei Sarona Ltd. (which is composed of several private companies and investors). In a discussion this week, the entrepreneurs expressed their hope of creating a unique urban complex that will grant added value to the shopping experience and will also succeed in attracting Tel Aviv residents - a "hard nut to crack," according to one of them. Ganei Sarona is based on the "lifestyle center" model, a new type of retail center developed in the United States during the 1990s that constitutes a kind of counterreaction to the closed malls. These centers were built for the most part near well-to-do suburban communities. They have a well balanced mix of commercial and recreational uses, and include a large number of squares, manicured gardens, fountains and well designed public spaces - and attempt to provide an experience of enjoyable loitering that will encourage visitors to linger in them for a long time. In other words, they are trying to imitate a classic urban center - but in a totally controlled, directed and supervised way. You won't see any peeling plaster or homeless people there, the corporation in charge will make sure to get rid of them within a short time.

Ran Steinman, one of the entrepreneurs, says that one of the main inspirations for Sarona is a famous lifestyle center in Los Angeles called The Grove, which was built on the area of a historic farmers' market. The entrepreneurs constructed a series of pseudo-historical buildings there, with magnificent facades in the spirit of the local architecture. It may be terrible kitsch, but the complex is considered a dizzying commercial success. "There is one building that is leased to a movie theater, one that belongs to Apple and many good restaurants. Outside they play a little music - it's an amazing thing," says Steinman. Amit Yulevitz, the CEO of Sarona, thinks that the public is seeking the open air and the experience of wandering around typical of city centers. "We don't see ourselves as competing with some mall. Those who want to do traditional shopping in malls will continue to go there, but anyone who wants high-class shopping and a different atmosphere will come to Sarona."

The Sarona marketing campaign reflects the desire of the entrepreneurs to connect to high-end businesses in Israel. Instead of large fashion chains or cafe chains, they tried to attract designer stores and chefs' restaurants. And in general, the historical legacy of the place seems to be an inseparable part of the marketing. The potential leasers have received a comprehensive file that includes, among other things, a naive illustration of the complex that shows stone houses alongside high rises, and romantic postcards that include information about each and every building. The entrepreneurs call them a "collection." At the same time, the entrepreneurs realize that the success of the complex depends not only on attracting successful businesses but also on close cooperation with the municipal administration that is responsible for Sarona.

"There is symbiosis here between the public space and the private space," explains Gadi Roitman of the Ganei Sarona management company. "The buildings cannot work without the park, while the public space cannot work without the buildings." He says that the planning of the public space between the buildings includes attention to commercial needs, such as areas for tables and chairs or the creation of an infrastructure for an air conditioning system (which due to preservation restrictions will not be placed outside the buildings ). Another reflection of cooperation between the entrepreneurs and the municipality will come in the form of various events to be held on the site throughout the year.

The close cooperation and mutual admiration between the parties is an example of proper development of public space. Sarona joins additional complexes in Tel Aviv that are based on cooperation between the private and public sectors: the Tel Aviv port and the train station complex. What the three complexes have in common is the creation of a distinct and defined urban space based on an historic site and operated by one body. This model has many economic advantages, because in effect it is run and maintained just like a mall. On the other hand, it lacks the spontaneity and heterogeneity that typifies a city center. Both the port and the train station are facing difficulties that stem from the fact that they are complexes that are not an integral part of the urban fabric. On the one hand they cater to a yuppie clientele, and on the other, during the week they attract mainly tourists.

The entrepreneurs, both from the municipality and the private companies, explain that they have learned the lesson from the other complexes in Tel Aviv and that Sarona's central location will ensure traffic of about 17,000 people daily, not including tourists. Now we have to wait for the opening to see whether they will succeed in restoring the Templer colony's intimate and charming character, in spite of the numbers of visitors, or whether it will turn into a branded and commercial product in which history serves only as a romantic backdrop for a day of shopping.

Source Haaretz

New report ranks Israeli hotels as third most expensive

Israel is the third most expensive country in the world when it comes to hotel rates, according to a biannual report of the Hotel.com website. Jerusalem is the 10th costliest city in the five-star hotels category. The Hotel Price Index (HPI) is an extensive survey based on reservations in more than 140,000 hotels in major city destinations across the world.

According to the report, the first half of the year recorded a 3% increase in hotel rates worldwide compared to the same period in 2010. Jerusalem's hotel rate, however, soared 30% during the same period, with an average room rate reaching $195 – bringing the capital to the 10th place in the world. Jerusalem ranked 10th in the five-star hotels category, with the average rate standing at $327. Israel came in third in the comparison of prices between countries, after Switzerland and Russia. According to the report, the average rate of a hotel room in Switzerland stood at $223, compared to $219 in Russia and $208 in Israel. The average price of a hotel room in Israel is higher than in Brazil, Singapore, Norway, Italy, Sweden, the United Arab Emirates and Denmark. The United States ranked 15th, France – 19th, Japan – 30th, and Germany – 32nd.

A committee appointed by Tourism Minister Stas Misezhnikov to look into the prices of tourism products in Israel met this week with representatives of the Israel Tourism and Travel Agents Association and the Israel Hotel Association to discuss vacation prices in Israel, both for foreign and Israeli tourists. The Travel Agents Association representatives – led by Chairman Kobi Karni, CEO Yossi Fattal and deputy chairman of the Incoming Tourism Unit, Yossi Fischer – presented a position paper blasting hotel rates in Israel and noting that "the concentration level in the hotel industry in the country is one of the causes for the hike in tourism products' prices.

"The Eilat area, for example, is controlled by two chains: Fattal and Isrotel, which own two-third of four and five-star hotel rooms. The Dead Sea area is controlled by the Fattal chain, which owns more than 50% of all rooms." The Incoming Tourism Unit added that another reason for the expensive hotel rates in Israel was the room shortage. Only 1,700 new hotel rooms have been built in the past decade, while the number of tourist rose from 1.2 million to 3.45 million. According to the Incoming Tourism Unit, "We must encourage international hotel chains to boost their activity in Israel, encourage significant construction of hotels in popular areas with different levels of accommodation, supervise and regulate mergers and acquisitions of existing hotels by chains which already hold a significant market share, especially in the Dead Sea, Tiberias and Eilat."

Israel Hotel Association representatives noted during the meeting that the costs of operating hotels in Israel are among the highest in the world, mostly due to manpower costs, property tax and additional expenses which other hotels in the world are not forced to deal with. "Israel is the only country which requires hotel security, estimated at some NIS 180 million ($48 million) a year. A hotel with 200 to 300 rooms must employ seven or eight guards, with the cost of one security post standing at some NIS 300,000 ($80,000) a year. "Moreover, Israel is the only country which requires kashrut supervisors, who cost some NIS 74 million ($20 million) a year. Only in Israel employees are paid more for working on Shabbat, and Israeli hotels are the only ones in the world which must have a lifeguard during all opening hours of the swimming pool, a fitness instructor and a pool operator." The hoteliers claimed that the additional manpower expenses in Israeli hotels make up 6.2% of their income turnover.

Source Ynet

New wing for the Tel Aviv Museum of Art

This month the Tel Aviv Museum of Art opened a parallelogram in concrete and stone designed by Preston Scott Cohen, with pre-cast curved forms on its outside and Israel’s largest exhibition gallery within. The Herta and Paul Amir Building, named for a Los Angeles real estate developer and his wife, adds 195,000 square feet of space to the museum. Founded in 1932, the museum holds the largest collection of modern and contemporary Israeli art, plus iconic works that include Roy Lichtenstein’s 1989 homage to the history of modern art in two huge mural panels.

Situated on a triangular site away from the street and wedged into a cultural campus composed of the city’s public library and an arts center named for Golda Meir, Cohen’s building wasn’t intended to change the skyline of Tel Aviv much. In a country of monuments, the Herta and Paul Amir Building is mostly underground, with three of its five levels below grade. Its concrete walls can be seen as defiant or simply appropriate, considering that travertine is often the material of choice for public buildings in Israel. Yet concrete links the structure materially to much of what is built or going up in Israel’s largest city.

And while the museum is devoted largely to Israeli art, its curtain-raiser shows 18 works by the German artist Anselm Kiefer that were inspired by Jewish mysticism. In Israel, as elsewhere, the design of new art museums can tend toward sculptural city-branding destinations. (A case in point is the Holon Design Museum, a copper-toned spiral designed by Israeli-born Ron Arad, which opened last year in a Tel Aviv suburb.) Yet Cohen’s exterior is an exercise in discretion: local regulations limited the height, and he desert-hued palette of the buildings around it precluded any adventures in color. Inside are rectilinear galleries, organized on multiple axes stacked above one another. Downplaying the structure’s slanted profile as “inconspicuous,” Cohen said he was experimenting with texture on the outer walls of pre-cast concrete. “It’s not a building that shocks you with curves — it’s a subtle distortion of the familiar and normal way that buildings are made,” said the architect, who heads Harvard’s Graduate School of Design and prevailed in an international competition over Tokyo’s SANAA firm, designer of New York’s New Museum among other distinctive buildings. The Tel Aviv Museum’s expansion cost $50 million, said Cohen — “the same cost as the ICA in Boston, but three times the size.” The most overtly dramatic elements of Cohen’s design are diagonal ramps that zigzag from one level to another, evoking Piranesi in acute angles. Cohen and the museum’s director and chief curator, Mordechai Omer, were considering site-specific works to commission for those spaces, but plans were interrupted by Omer’s death in June.

A grand escalator takes visitors down to a space that Cohen calls “The Lightfall,” an atrium 87 feet high. Adjoining it is a gallery of 9,000 square feet, with ceilings rising higher than 21 feet. Like the other galleries in his project, this one is rectangular and adaptable. “We didn’t want all the spaces to have the same mood and typology, but we wanted them all to be flexible within a particular range,” said Cohen. More than 18,500 square feet of additional gallery space is devoted to Israeli art. The architect noted that rectangular galleries avoided encumbering curators with the acute angles and swooping interiors associated with the work of Daniel Libeskind, which “ends up forcing you to exhibit art in the most conventional ways that you could imagine,” he said. Cohen compared his building’s adaptability to the operational principal of a kunsthalle, where galleries accommodate a shifting program of exhibitions. “That was the whole idea of the building, with constantly changing new curatorial arrangements — installations that require big spaces, video, paintings.”

Anselm Kiefer was in Tel Aviv to install and inaugurate the exhibition along with his dealer, Thaddaeus Ropac. The artist added two temporary walls to organize works around the installation piece from which the show takes its name, “Shevirat Ha-Kelim: The Breaking of the Vessels.” That title refers to the shattering of a formerly unified world, represented in Kiefer’s mixed media paintings inspired by Cain and Abel, the stories of Noah and Samson, and the poetry of the Holocaust survivor Paul Celan. Standing in the cavernous space, Kiefer spoke of harmony that existed between Jews and Germans in the early decades of the 20th century, and called his exhibition “an impossible attempt at reunification.” Kiefer will be a hard act to follow in the new building, which was built, among other reasons, to lure major international exhibitions. So will the man who commissioned it, Mordechai Omer, whose death left the Tel Aviv Museum of Art with an empty director’s office that it is still looking to fill.