Israel's Most Expensive Hotel Sale: The Jaffa Sold for $123 Million

RFR has sold The Jaffa Hotel, located in the historic Jaffa district of Tel Aviv, for a record-breaking $123 million, according to BusinessWire. This marks the largest hotel transaction ever recorded in Israel, averaging $1 million per room key.

The Jaffa Project: History, Architecture & the Record Deal

The Jaffa Hotel was developed on the site of a historic 1879 building, originally constructed as a hostel for pilgrims en route to Jerusalem. The project was led by RFR, founded by Aby Rosen, and involved world-renowned British minimalist architect John Pawson, alongside Israeli preservation architect Rami Gill. Development began back in 2006.

In addition to blending modern architecture with preserved 19th-century structures, the project also incorporated a section of a medieval Crusader-era wall, discovered during excavation. The exposed stonework now forms part of the hotel’s lobby and inner courtyard.

The property features 120 hotel rooms and 33 private residences. On-site amenities include the Giardino restaurant, Golda’s Deli café, a poolside bar, and The Chapel nightclub, which occupies a repurposed historic chapel. Guests also have access to the L.Raphael Spa, featuring six treatment rooms and wet & dry wellness facilities.

RFR emphasizes that The Jaffa has become both an architectural landmark and a cultural and economic catalyst for the wider Jaffa district. Over the past decade, Jaffa has emerged as one of Tel Aviv’s most dynamic tourist and investment clusters. According to the firm, the project’s high-quality design and respect for historical context have made it a symbol of Israel’s new urban era.

“This project has been a personal achievement for me,” said Aby Rosen. “We created not just a hotel, but a unique space that is deeply integrated into the history of Jaffa while setting new standards of luxury for visitors and residents alike.”

The Jaffa became a flagship asset in RFR’s global portfolio. Founded by Rosen and Michael Fuchs in the 1990s, RFR owns over 100 properties across the US and Germany, with a strong focus on premium real estate in New York, Miami, Berlin, and Frankfurt. The Jaffa was a rare — but highly prominent — addition to their Israeli ventures.

The record price reflects the continued demand for Israel’s luxury real estate market, despite political uncertainty and challenges in the tourism sector. The Jaffa now sets a new benchmark for high-end hotel property valuations in the country.

Israel’s Hotel Sector Trends in 2025

The Jaffa’s sale reflects not only investor appetite for unique design properties but also a broader rebound across Israel’s hospitality market in 2025. Despite ongoing geopolitical headwinds, both the government and major developers are heavily investing in tourism infrastructure.

According to Conference & Meetings World, Israel’s Tourism Ministry is supporting 27 hotel projects totaling $113 million, including $22 million in government grants. Thirteen new hotels opened across the country in 2024, including in Tel Aviv, Jerusalem, and Haifa.

The ministry forecasts around 3 million international tourist arrivals in 2025, contributing nearly $4.9 billion to the national economy. The primary visitor markets remain the U.S., Europe, and parts of Asia, including Indonesia and Malaysia, with strong demand driven by religious and cultural tourism.

According to The Jerusalem Post, major hotel operators are expanding aggressively. Local giant Isrotel plans to open five new properties in 2025, growing its portfolio to 28 hotels. Meanwhile, Israel Canada is developing Israel’s first Four Seasons Hotel, to be located in Jaffa as part of a mixed-use complex with residential and commercial components.

With competition intensifying, hotels are also adopting advanced digital solutions. According to Amadeus Hospitality’s 2025 report, Israel is seeing growing shares of online bookings and longer visitor stays — signaling the sector’s shift toward a more resilient, adaptive business model.

The record sale of The Jaffa, alongside new openings and rising international tourist volumes, is driving optimism across both the luxury segment and Israel’s broader investment market. Similar trends are emerging globally, with luxury hospitality increasingly viewed as a stable and prestigious asset class amid worldwide economic volatility.