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AFTER WAVE OF COMPLAINTS, PRICE AGREEMENT CUTS HOTEL RATES IN ISRAEL

SHARE AFTER WAVE OF COMPLAINTS, PRICE AGREEMENT CUTS HOTEL RATES IN ISRAEL

The cost of a hotel stay in Israel has been cut - for most rooms - by between 10 and 25 percent as a result of a fight between the country's tourism ministry and the Israel Hotel Association.

The tourism minister, Gideon Patt, fired the first volley when he accused Israel's hotel industry of charging the fifth highest prices in the world. The ministry said it had been receiving hundreds of letters from home and abroad complaining of exorbitant prices, and Patt threatened to impose price controls.However, a mutual agreement was reached to lower prices on both overnight stays and on food and beverage service.

Under the new price agreement, a double room at a leading hotel, such as the King David in Jerusalem, will not exceed $170 a night, plus a uniform 15 percent service charge.

A similar room at another hotel given five stars under the Israeli rating system will cost no more than $150 and service charge, while four-star hotel rooms won't run more than $100 and service charge.

Previously, hotels in Israel could charge as much as they wanted, and some clients were paying up to $300 a night, according to the tourism ministry.

The new price restrictions do not apply on holidays, such as Rosh ha-Shanah and Yom Kippur. And hotels can charge more for special rooms or suites. Rooms in the King David overlooking the Old City cost $198 a night, plus the 15 percent service charge.

Tourism in Israel has been down since the Palestinian uprising began almost two years ago, and hoteliers reported occupancy rates of only 30 to 50 percent in September. But all said they were heavily booked in mid-October during the Jewish holiday season.