Considering that the hospitality sector contributes significantly to the Georgian economy, it is pertinent to analyze the employment trends in the HoReCa industry. In particular, in this article, we will evaluate changes in the main indicators before and after the pandemic hit.
The number of employees in the HoReCa industry increased steadily from 2016 to 2019, with an average annual growth rate of 10.1%, with the average growth rate even higher in the accommodation sector (17.6%) but somewhat lower in the food sector (5.3%). There were also changes in the distribution of the employees in the HoReCa industry over the same period. In particular, from 2016 to 2019, the share of employees in the accommodation sector increased by 7.6 percentage points, reaching 45.9% of total employees in the HoReCa industry.
The number of people employed in the HoReCa industry declined sharply in 2020, with a 33.2% YoY drop.
In 2020, the drop in the number of employees was significantly higher in the accommodation sector (a 40.9% decrease), compared to the number employed in the food sector (26.7%), which can be explained by the food sector being less dependent on international visitors and being able to adjust to the pandemic-related regulations more swiftly (by providing delivery services).
In Q1 of 2021, the YoY decline in the number of employees in the HoReCa industry was even more notable, reaching 45.9% (a 56.2% drop for accommodation, and a 38.8% drop for the food sector). Since Q2 of 2021, the number of employees has risen in both sub-sectors compared to the corresponding period of the previous year, reaching YoY growth of 9.2% in Q3 of 2021, which could be explained by the low base and the partial alleviation of restrictions on the industry, albeit staying well below pre-pandemic levels (16.3% lower compared to Q3 2019).
While discussing employment in the HoReCa industry, it is also worth analyzing the nominal monthly average remuneration of those employed in the accommodation and food sub-sectors. The average monthly salary of employees in the HoReCa industry has been increasing steadily with slight fluctuations, mainly due to the seasonality of the industry. From 2016 to 2019, the nominal average monthly salary peaked in Q4 of 2019 for both sub-sectors, reaching 1321 GEL for accommodation and 821 GEL for the food sector, while the average monthly salary over the same period for the HoReCa industry as a whole amounted to 1019 GEL, with a YoY growth rate of 11.0%.
In Q2 of 2020, the average monthly salary showed a significant 10.9% YoY drop, with a higher decline in the accommodation sub-sector (20.1%) compared to the food sub-sector (2.8%). The trend of annually declining salaries continued until Q1 of 2021. In Q2 of 2021, the average monthly salary demonstrated significant YoY growth of 14.3%. In Q3 of 2021, nominal salaries continued to grow, going beyond pre-pandemic (2019) levels for both sub-sectors, reaching 1358 GEL for accommodation and 873 GEL for food, while the average monthly salary for the HoReCa industry as a whole amounted to 1062 GEL (with a 6.5% YoY growth rate), which can be explained by a combination of factors, such as the significant inflation rate, the partial alleviation of restrictions, and a relative increase in demand in the HoReCa industry.
Hotel Price Index
In January 2022, in Georgia the hotel price index decreased by 7.2% compared to December 2021. The 3-star, 4-star and 5-star hotel price index decreased by 5.2%, while for guesthouses, the price index decreased by 9.6%.
In January 2022, compared to January 2021, hotel prices in Georgia increased by 5.3%. The prices of 3*, 4*, 5* hotels increased by 5.9% and the prices of guesthouses increased by 9.4%.
Average Hotel Prices
In Georgia, the average cost of a room in a 3-star hotel was 132 GEL per night in January 2022, while the average cost of a room in a 4-star hotel in Georgia was 237 GEL per night and the average cost of a room in a guesthouse was 107 GEL per night.
The average cost of a room in a 5-star hotel in Georgia in January 2022 was 441 GEL per night. In Kakheti, the average price was 567 GEL, followed by Tbilisi – 524 GEL, Samtskhe-Javakheti – 487 GEL and Adjara – 362 GEL