In 2017, the number of Georgia’s international inbound travelers grew by 18.8% year-over-year (y-o-y) from 6.4 million to an all-time high of 7.6 million. Tourist arrivals increased by 27.9% from 2016 to 2017, reaching 3.5 million visitors.
Hotel Supply Trend
The hotel industry in Georgia comprises approximately 27,333 rooms. The total supply is expected to increase by 6,754 new rooms by 2021.
Tbilisi and Batumi – Main Suppliers of Hotel Rooms
Tbilisi’s and Batumi’s hotel room supplies have grown substantially over the past few years. In 2017, Tbilisi’s total hotel room count hit 7,875, representing a 44% increase from 2014, while Batumi’s supply rose to 5,325 rooms, reflecting a dramatic 109% increase. Taking into consideration the future pipeline, these two cities will remain Georgia’s top suppliers over the next five years.
International Operators Continue to Expand in Georgia
During next few years, the Georgian hotel market is expected to grow substantially. Several major international brands will build locations in not only Tbilisi and Batumi, but also in Kutaisi, and in Georgia’s seaside and mountain resorts. The first internationally-known midscale brand, Best Western, already opened a 45-room hotel in Kutaisi. Another international brand, Ramada Encore, is expected to open a hotel in Kutaisi in 2019, adding another 120 rooms. In addition, the Best Western Plus joined Bakuriani’s hotel market.
In 2017, three internationally-branded hotels — the Euphoria Hotel Batumi, Wyndham, and Best Western — opened in Batumi, adding another 611 rooms to Batumi’s overall hotel room numbers. As a result, the share of internationally-branded hotel rooms in Batumi has now reached 24%. Today, internationally-branded hotel rooms represent 21% of Tbilisi’s total supply. Based on the most likely scenario, we expect the share of internationally-branded hotel rooms to reach 39% by 2020.
Currently, Tbilisi has 20 internationally-branded hotels in the pipeline representing a total investment volume of USD 778
Tbilisi, Batumi and Kutaisi Performed Well
Overall, Tbilisi’s hotel occupancy rates rose in 2017 across all segments barring the economy/budget segment. International upscale brands enjoyed the highest hotel occupancy rate of 72%, while Tbilisi’s international midscale brands experienced 10% in RevPAR growth.
Occupancy rates for Batumi’s internationally-branded and local upscale and middle-class hotels increased by 7.7% and 19% y- o-y, respectively, while local upscale and midscale hotels saw a mammoth 17% RevPAR increase.
Kutaisi hotels also experienced a strong year, with 20% occupancy growth in the upscale and midscale segments and a 5%
increase in local budget and economy class segments. Upscale and middle-class segments recorded a 24% growth in RevPAR. Ski Resorts Experiencing a Strong Growth Trajectory
Having entertained more than 410,000 visitors during the 2016-2017 winter season, Georgian ski resorts are opening up to and benefiting from a global audience. Gudauri hotels recorded their highest occupancy rates (51%) since 2014, while development of new resorts and infrastructural enhancements are also working to fuel growth.
At the other end of the spectrum, performance indicators in seaside resorts were negatively impacted by the lingering effects of Georgia’s currency depreciation.
Wellness and spa tourism is another high-potential growth area for Georgia. Various resorts are still in the early stages of development, but future prospects are promising.
Georgia is the most active economic center in the region. With a liberal tax code, corruption free government, and significant opportunities for foreign investment, it provides a highly supportive business environment.
At the crossroads of Europe and Asia, Georgia borders Turkey, Armenia, Azerbaijan, and Russia. The country occupies an area of 69,700 square kilometers (sq km) and is home to a population of 3.7 million people. The country’s land borders run a length of 1,839 kilometers (km), while the Black sea coastline is 315 km.
During last two decades, Georgia has implemented large-scale reforms that have led to political and economic transformation. It has strengthened its democracy and furthered its relationship with the European Union (EU). Georgia has also made business development within the country a top priority through encouraging entrepreneurship, attracting private investments, and shifting tax incentives, thereby positioning itself as an attractive option to the international business world.
With its unique cultural heritage and exuberant hospitality, Georgia’s tourism industry continues to grow and
thrive, further bolstering economic growth.
Georgia is a parliamentary republic. Parliamentary elections are held every four years. Georgia’s parliament is located in Kutaisi City and acts as the representative body for the country, exercising legislative power and developing domestic and foreign policy. As an executive council of government ministers, Georgia’s cabinet is headed by Giorgi Kvirikashvili, who is a member of the majority “Georgian Dream Party.” Based on accountability, citizen participation, technology, and innovation as its guiding values, today’s government continues to make European and Euro-Atlantic integration a primary strategic objective.
The Georgian Constitution, adopted in 1995, lays out the structure of the national government and defines its authority and function. Georgia’s court system has three branches: the Courts of First Instance (District or City Courts), the Appellate Courts, and the Supreme Court. The Courts of the First Instance have jurisdiction over all civil, criminal, and administrative cases. Decisions from the Courts of the First Instance may be appealed to the Appellate Courts and further appealed to the Supreme Court.
As an alternative to litigation, Georgian laws allow arbitration both in local as well as international arbitration
Labor Market Overview
institutions. Georgia is a member of the International Centre for Settlement of Investment Disputes (ICSID).
Public service hall in Georgia provides customers with state services including business registration and
property registration through ‘one-stop-shop’ principle that ensures efficient service delivery.