Issue 6, 2011. December-January

   

HOTELS: HIGH OCCUPANCY, HIGH EXPECTATIONS

High seasonal occupancy rates are bolstering expectations for a boom in the hotel sector.

Maia Edilashvili

Over the last few years the Georgian government has made huge efforts to build a new image for Georgia as an attractive tourist destination both regionally and globally. Experts, however, say the potential still remains untapped.

There are 52 hotels with approximately 2,400 beds in Tbilisi, including guest houses, family houses and five international franchises in the capital - Courtyard Marriott, Tbilisi Marriott, Sheraton Metechi Palace, Radisson Blu and Holiday Inn. Two also operate in Batumi - Sheraton Batumi and Radisson Blu Batumi.

This past summer saw high occupancy rates and during the peak of the tourist season there were not enough rooms and in particular not enough three and two star hotel rooms to meet the demand. And with international events planned such as the 2015 Summer European Youth Olympic Festival in Tbilisi, there will be an even greater need for three and five star accommodation.

Caltrider Advisors, a consultancy firm that published an industry analysis for the hotel sector, found that there is "an immediate need" for new hotel investment to support these events.

The Caltrider Advisors report notes that if the current growth trend continues, the supply of available high-quality accommodation "will not be sufficient to serve market demand, and new hotel investments will be required to satisfy that demand."

Keti Bochorishvili, director of the Georgian National Investment Agency (GNIA), which is part of the Ministry of Economy and Sustainable Development, says that the construction of three and five star hotels will be the government's priority in the coming years.

For investors who would take the initiative, the government is offering several state-owned facilities in downtown Tbilisi for sale. These include the 3-storey former Physical Education Institute on Chavchavadze Avenue; the 2-storey former Finance Ministry building on Abashidze Avenue; the 11-storey former Ministry of Economy and Sustainable Development on Chanturia Street and the 2-storey Clinical Hospital of I. Javakhishvili Tbilisi State University on Agmashenebeli Avenue.