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Georgia Experiences the Deficit of Middle Class Hotels

The demand for hotels in Georgia grows higher than the supply – if in the past 4 years, the number of visitors grew by 30% per year, the number of hotel rooms – only by  6% – “Colliers International”, a leading global commercial real estate company, says  in its study commissioned by the Tbilisi City Hall and the Ministry of Economy.

 It is primarily concerned with the characteristics and potential of the Georgian real estate market today.
The study covers market segments, such as hotels, offices, retail space and residential apartments.

According to the findings, at this stage the largest number of hotels is located in Tbilisi and Batumi.

The company’s representative Irakli Kilauridze says that hotels in Tbilisi work with about 75% capacity, and this is quite a high figure which suggests that there is a large potential for growth in this area. At present, the number of hotel rooms in Tbilisi makes approximately 2 000.

Along with that, the prices of hotels are quite high – for example, a room cost  in Tbilisi can reach $ 210 per night.

The study authors write that 16 projects are being implemented in Tbilisi that will increase the number of rooms to 2 625.

According to Keti  Bochorishvili, Deputy Economy Minister,  Georgia has great potential in terms of  hotel business  since the problem of shortage of hotel rooms is permanent.

“When we are in talks with major tour operators, it turns out that Georgia is not interesting  for  them due to the lack of rooms. This severely slows down the development of the country, such as conference tourism. In order to hold such events regularly and make the country one of the world’s centers of conference tourism, at least 10 000 hotel rooms are required – she notes.

According to Irakli Berikashvili, the head of the Economic Affairs Office at the Tbilisi City Hall,  research clearly shows investors where is the potential for their  investment development.

“We have a picture in all major fields. Now we are going to formulate all the data in the form of specific investment projects. We will work in all areas that are defined in the study as deficient. In particular, it comes to middle- class hotels,”- he says.

In the Black Sea resort of Batumi hotel occupancy is 40%. Currently 10 hotels are  under construction there that will create additional 1 568 rooms.

According to the survey, the main major players in the Georgian hotel market are “Holiday Inn”, “Marriott”, “Sheraton”, “Radisson” Best Western “,” Rooms ” and Citadines.

Several hotels of the networks “Hayat”, “Millennium”, “Park Inn”, “Rixos”, “Hilton” and “Radisson” are also planned to build  in Tbilisi.

Large hotels  such as “Kempinski”, “Hilton”, “Babylon Tower” and CROWNE PLAZA are under construction in Batumi.