Issue 2, 2012. April-May


FIVE QUESTIONS WITH... STEVE JOHNSON launches its newest feature - interviews with investors, CEOs, policy makers and economists - with a candid discussion with Steve Johnson, the owner of Prospero's Books, senior partner of Betsy's Hotel and a long time AmCham board member.

Maia Edilashvili

Q: What is your feeling about the potential of the tourism business in Georgia? How important is the return traffic? What do you think should be done to promote Georgia as a destination of choice?

A: Betsy's Hotel,, was opened in 1993 by Betsy Haskell, when the only other acceptable hotel for foreigners was the Marco Polo (now the Sheraton Metechi Palace). Betsy's started with five rooms... we recently built a new building next door and made 57 rooms in total, with conference rooms and banquet facilities. Actually, most of our business is return business. We know guests who come frequently to Georgia have usually been to the larger corporate hotels and once they visit Betsy's and understand that it is the place to gather and meet other professionals and colleagues, they stay with us. The reasons for promoting Georgia are obvious: the old ancient wine country with deep religious roots and a fascinating history. I don't think the challenge is on figuring out what to focus on, I think the challenge is how to handle the guests that come.

You have to have English-speaking taxicabs, signs in the streets in English and Georgian. I think the police and law enforcement issues have been sorted out now. Most of the places [have people who] speak English well and offer menus and brochures, etc. in English, but more needs to be done. Tbilisi has huge potential for hosting conferences and events for the region. MICE (Meetings, Incentives, Conventions and Exhibitions) and other initiatives are working to achieve some good results. More airlines and better arrival and departure times are a challenge for many reasons, but as things continue to develop I am confident that the focus of the Georgian Government and their efforts to promote Georgia are working positively for not only tourism but also business and investment.

Q: FDI is critically important for the Georgian economy. What should the government do to attract more investors like you? What would you tell potential small investors about the Georgian market?

A: That's a good question... because you have to know whether you want to attract big energy related companies and retail corporations or small business owners like myself. When your government promotes Georgia as nice place to do business, does that matter to big energy, oil or mining corporations? I think they would come and set up even if it's very difficult. But the ease of setting up a company and operating a small or medium size company is a different mindset, and that matters to small and medium sized companies, which can, and do, have an enormous impact on the total economy when they are all considered together.

Concerning investors, firstly, they should come and run their business themselves, fully commit and be careful whom they partner with. They should spend time with businessmen who have been here for a while, who understand Georgia and then try to correctly determine where and with whom they invest.

Q: What inspired you to invest in Georgia? What has made Prospero's Books a success?

A: Georgia seemed like the land of opportunity when I first visited in 1992. My older brother and I purchased the property in 1997 with Peter Nasmyth and opened in 1999, two weeks before my son was born. At that time it was just a bookstore and offered books exclusively in English. We then added a café and began roasting coffee a year later. We expanded the property in 2010 adding a larger café and children's books section. What makes it successful, I think, is our level of customer service; orientation and training of staff is completely American style. We have consistently maintained that level of quality during all this time. My wife, Tamara Megrelishvili is the director and does a fantastic job.

Q: Have you considered franchising the bookstore? How have e-books affected your business?

A: We have considered opening franchises in Baku and Yerevan many times, also locally in Batumi, or in Tbilisi in Vake or Saburtalo. But franchising is a difficult thing to do. For example, you may have a car which is operating perfectly because you know all its secrets and exactly how it works, but you can't sell it because you know others can't operate it with just the key. In the future we will do something bigger and better, but at this time with the e-book market developing quickly and the way people are reading more on their computers, it seems that regular paper books and publishers are on the verge of change. A lot of authors will start bypassing the publishers and the traditional methods of sales and distribution. In Georgia it's still hard for people to use e-readers because you must have an international credit card to download online; we will soon offer e-books on our website and we will change and grow with the market developments.

Q: How important is it to know and love the Georgian culture to do business here? How does being part of a Georgian family help you run business successfully?

A: After twelve years of marriage my wife and I have two children - a boy aged 11 and girl, 7. Georgians have one word for everyone who is not Georgian ‘uckhoeli', which translates as stranger. So I feel like stranger sometimes. Even after so many years, I am still figuring out the Georgian culture. In 1992 when I first visited Tbilisi I was fascinated that even though people were waiting for hours in line for bread and searching for eggs and meat, dealing with hyperinflation and crime and that terrible feeling that nobody knew what was going to happen next, they would still invite you into their home, and have a four or five hour Supra with 20 people, the traditional Tamada, and since everyone has a piano or a guitar there was always singing and dancing. And I thought - this is crazy, where do these people find money, time and energy for this?

Now even after 15 years of living here I am still figuring out a lot of it and I am still fascinated with the culture which is so old: the mentality of the Caucasus, where the East meets West; the relationships between the men and women and kids. It seems like Americans grow up faster, they are expected to leave home at 18-19 to live on their own; in Georgia there are extended families living together all the time, which keeps people closely tied and connected and there is a lot more community understanding and knowledge about who is who and their history etc... But, for all the good that brings, it makes an already small town very, very small.

My Georgian? I can say enough to get in trouble but sometimes not enough to get out of trouble. People I work with speak English and most of the business I do is in English. Though everybody who wants to come and do business here should make some effort to learn a little Georgian. Everyone appreciates this. Georgia is an interesting place, but very complicated and chaotic at the same time if you don't understand some of the basics. And it's important to be as positive as possible and try to manage your expectations. If you are honest, and you are good and patient, work hard and expect the same from everyone else, eventually it's respected and returned.