Hospitality & Real Estate

Georgia is one of the first countries in the world to create and implement new hospitality service standards in response to Pandemic. Rigorous and precise testing and epidemiological work have ensured that country has one of the lowest numbers of cases and ranks as 1st Covid-19 safe country in Eastern Europe and Central Asia by Deep Knowledge Group.

Georgia has predominantly proved to be a highly desirable location for the hospitality and real estate sectors. With its unique cultural heritage and exuberant hospitality, Georgia has seen a dynamic growth of international visitors over recent years. The country received only 2 million international visitors in 2010, but in 2019, the number of visitors reached a record high of 9.4 million (7.8 % y/y growth).

Taking into consideration the fact that the population of Georgia is only 3.7 million people, it is clear that the country is a very attractive tourist destination. Due to high demand and occupancy rates, international brand hotels are mushrooming in Georgia.

With fewer regulations, a simplified tax structure, and new infrastructure improvement initiatives, Georgian leaders are working to create an environment in which local and foreign companies operating in Georgia can flourish. The strong growth investors are experiencing in the hospitality and real estate sector represents the fruits of reform—the success of policies that introduced flexibility into the economy. Subsequently, Georgia’s tourism industry continues to grow and thrive, further bolstering economic growth.

Why invest in Hospitality & Real Estate

Great Performance Indicators – High Demand

In 2019, the number of international traveler trips grew by 7.8% YoY from 8.7 mln to 9.4 mln. The number of tourist arrivals increased by 8.3%, constituting 65.7% (5.1 mln) of the total number of international visits, while same same-day trips stood at about 34.2%.
Georgia’s tourism market is sourced dominantly by neighboring countries (71% of tourist trips in 2019). However, there’s significant increases shown from other non-neighboring countries. During last five years, the number of business trips is growing on average by 9% annually.
The tourism industry accounted for 8.1% of Georgia’s economy in 2019. The same year, tourism value added grew by 16.9% YoY and amounted to USD 1.3 billion (GEL 3.53 billion). Tourism value added reflects the economic activity generated by industries such as hotels, food and beverage (F&B), travel agencies, airlines and other transportation services. The transport category, which represents 38% of the total value added, grew by 20% YoY. The F&B industry grew by 23%, while the travel agencies and the accommodation categories increased by 17% and 11%, respectively.

Well connected and easily accessible location

Georgia is a regional center located on the shortest route between Europe and Asia. International visitors enjoy easy access by three international airports (Tbilisi, Batumi, and Kutaisi), modern railway and visa liberalization system. Citizens of 98 countries can travel to Georgia without a visa and stay up to one full year. In addition, foreigners who hold a visa/residence permit of 50 countries can enjoy visa-free travel to Georgia.
Airlines carried 1.97 million international travelers in 2019. In 2019, there were 50 international and two domestic airlines operating on the Georgian market. Wizz Air Hungary is the largest company operating on the Georgian market. It offers flights to up to 39 destinations. In 2019, it provided service for 825,290 passengers (16% of the total trips). The second largest company is Turkish Airlines, with 572,181 passengers and 11.1% of the market share. This is followed by Georgian Airways, Ural Airlines, Fly Dubai, and Ukraine International Airlines. International Airlines. In 2018, one Georgian, My Way Airlines, and nine international companies appeared on the market. Additionally, in 2019, Ryanair, one of the Europe’s low-cost and most popular airlines, also entered Georgia, offering two routes from Tbilisi and two from Kutaisi.

Stable and Safe Country

Georgia is Stable economic and political market, and a safe country to invest in. This stable and secure country has an extremely well-functioning business environment. In the recent Doing Business 2020 report by the World Bank, Georgia ranks 7th out of 190 countries on the ‘Ease of Doing Business’ criteria. It sits alongside developed markets, such as the US, Singapore, Denmark, Norway and the UK, among others. Georgia is featured on the list of 10 top improvers for three consecutive Doing Business cycles.
Numbeo, the world’s largest cost of living database, has released its Crime Index by Country 2020 in which Georgia is the world’s fourth safest country and the safest country of Europe. Georgia took fourth place among 133 foreign states and improved its ranking by two points compared to last year.

Tourism revenue by years

Purpose of turism in georgia

Rich Natural and Cultural Resources

Distinctive among the world’s nations with its biodiversity, Georgia boasts rich natural and cultural resources and is home to more than 12,000 historical and cultural monuments, four of which are included in the list of UNESCO World Heritage Sites.

Adjara Region is famous for its black sea coasts and bright lifestyle, while winter resorts offer an extraordinary experience including free ride and heli-skiing. With Tskaltubo medical and wellness resort Georgia is a unique wellness and SPA destination in the Region. For those who enjoy gaming, Georgia can provide a high-quality gaming experience equal to world-class gambling destinations without the restrictive legislation.

Tbilisi

Tbilisi is the capital of Georgia and the key destination for tourists and business travelers. The city has monuments, castles, historical houses, churches, theatres and authentic festivals. The number of multinational companies operating in South Caucasus and CIS headquarters in Tbilisi is increasing steadily, which ensures Tbilisi’s position as a regional business hub. The city beneﬁts from growing international, regional and local visitors. Over the last 5 years, annual hotel occupancy rates in Tbilisi have been above 70%. Following International Brand Hotels operate in the city: Biltmore, Radisson, Tbilisi Marriott, Courtyard Marriott, Holiday Inn, Aparthotel Citadines, Best Western Tbilisi, Mercure, Hotels & Preference, Moxy and the upcoming projects include Park Inn by Radisson, Radisson Red, Radisson Blu Telegraph, Hilton Garden Inn, Rixos, Intercontinental, Hyatt Regency, Pullman Hotels & Resort. Tbilisi International Airport currently has around 120 number of flights per week through 16 different airlines, including Turkish Airlines, Georgian Airlines, Lufthansa, Qatar Airways, Air Baltic, etc. Tbilisi International Airport received the largest number of travelers compared to other Georgian Airports –1.5 mln in 2019. Additionally, in 2019, Ryanair, one of the Europe’s low-cost and most popular airlines, also entered Georgia.

Sun-beach Resorts

Georgia’s Black Sea coast encompasses the towns of Kobuleti, Gonio, Kvariati, Sarpi, Chakvi, Anaklia, Ureki, Shekvetili, and Grigoleti. Adjara Region, located in the southwestern corner of Georgia, is known for its admirable seaside journeys and experiences. The resort towns attract visitors looking for an escape from urban life while remaining close enough to vibrant Batumi that they can enjoy a variety of entertainment options. The seaside resort hotel market consists of 484 hotels with 13,116 rooms. Since 2018, the number of hotel rooms in Georgian seaside resorts has increased by 8.5%.

Winter Sky Resorts

Due to the growing number of international visitors, commercial real estate, including international brand hotels are rapidly developing in Georgia's Black sea resorts. Sun-Beach resorts are one of the largest and fastest-growing touristic destinations in Georgia. Adjara was visited by an unprecedented number of travelers in 2019. The particularly high number of international traveler trips increased by 8 % from 2 mln in 2018 to 2.2mln in 2019. Batumi is especially popular amongst neighboring countries. Turkey, Russia, Azerbaijan, and Ukraine are clearly top source markets of international trips to Batumi. Individuals from European countries are also actively starting to travel

Svaneti

Svaneti (regional center - Mestia) is a historic region in the northwestern part of Georgia. Svaneti is becoming a place for year-round fun and adventure with an array of rare wildlife, flowing rivers and lakes, majestic alpine plateaus next to UNESCO heritage sites. Winter in Svaneti offers ideal ski slopes, 6 months of permanent snow, elevation range of 1400 – 2500m, and Olympic standard downhill track with 988m vertical drop. Highest peaks for skiing to include Tetnuldi (4,974 m) and Hatsvali (2347 m). Winter plateau Tetnuldi has become one of the main ski lovers’ direction in CIS countries. Svaneti has already established infrastructure.

Racha

Racha is located in the north-western part of Georgia on the southern slopes of the Central Caucasus. Racha is famous for its mountains, mineral waters, ‘Khvanchkara’ wine region and cultural monuments. Racha has three main tourism destinations: Shovi, Utsera and Shaori. Investment Opportunities Real estate & hospitality development opportunities Shaori - internationally branded lakeside hotel and spa hotel (lake-view, full-service 4* hotel with 125 rooms) Shovi - Internationally branded climatic resort hotel and spa hotel (4* with 105 rooms, in- and outdoor wellness facilities); 40 private chalets for sale of high build quality with private saunas/hot tubs Utsera - an 80-key, independent (non-branded), midmarket hotel with spa and medical department with mineral water based treatment rooms (Medhotel Utsera – House of Gastronomy and Showroom)