Mid-Range Hotels on the Rise in Georgia

Options for mid-range hotels are expanding in Georgia. The independent hotel market opened, after the collapse of the Soviet Union in 1991, with a proliferation of family guesthouses. A guesthouse generally entails a family house or apartment with rooms for rent, similar to a bed and breakfast. They typically offer breakfast and, especially in rural areas, dinners can often be included as well. Guesthouses are usually on the low end of the price spectrum. While quality varies, visitors can usually expect simple, no-frills service from non-professionals in the hospitality industry and basic accommodation. On the other end of the spectrum were high end international chains – Sheraton Metechi Palace, Tbilisi Marriot – and later Holiday Inn, Radisson Blu, and others.

Backpackers praise Georgia as a budget destination, in part due to guesthouses and hostels where a bed can cost as little at 5-10 GEL ($2-4) a night. More well-heeled travelers can stay in a variety of four- and five-star hotels, including internationally recognized brands and local upscale boutiques, gaining in popularity since Rooms Hotel broke onto the scene in 2012. The mid-range market, however, has grown much more slowly and there are significant gaps in the market, particularly outside of Tbilisi and Batumi, according to the Georgian National Tourism Administration (GNTA).

So far this year, a total of 18 new hotels have opened in the country. GNTA reports that this number adds 1,624 beds and 812 suites to Georgia’s tourism sector. Seven of the new hotels are international brands. The majority of growth was in Tbilisi where 505 of the new rooms are located; 155 new rooms are in the eastern Kakheti region and 54 in the southern Samtskhe-Javakheti region.

52 new hotels are currently under construction in the capital, and in the Black Sea coast regions of Adjara and Guria, there are 40 and 29 hotels under construction, respectively.

One of the most notable new mid-range options is The Best Western Tbilisi, now open in the trendy upper-class neighborhood of Vake, near Round Garden. Prices range from $80 – 150 based on season and demand. It is the sixth Best Western in Georgia, and the second in Tbilisi – the first being the Best Western Tbilisi Art Hotel located in the Saburtalo neighborhood.

Best Western Hotels & Resorts plans to open two new hotels in Georgia by the end of the year, bringing their total to eight, with locations in Tbilisi, Batumi, Sairme, Bakuriani and Gudauri.

New hotels are also planned for Kutaisi, Martvili, Mestia, Anaklia, Poti, Tskaltubo, Stepantsminda and Telavi according to the GNTA.

In late 2016, ISET Policy Institute at Tbilisi State University warned that Georgia may be headed towards an oversupply of hotels. The “surge in the number of hotels and hotel rooms is a very good indicator of economic progress and the confidence of international and domestic investors in the future of the country,” reported Olga Azhgibetseva of ISET, however, “an excessive supply of hotel accommodation can have a significant negative effect on hoteliers if internal and external economic conditions turn out to lag behind expectations,” Azhgibetseva cautioned, “balancing between demand and supply in an environment with uncertain prices is therefore an important challenge faced by investors and policy makers.”

By Samantha Guthrie

13 August 2018 15:48