‘Host in Georgia’:
Six hotels worth 12m GEL planned for Georgia’s regions

The 'Host in Georgia' program will co finance six new hotels in Bakuriani, Gudauri, Poti and Ureki. Bakuriani in autumn. Photo by N. Alavidze/Agenda.ge
Agenda.ge, 02 Aug 2016 - 13:44, Tbilisi,Georgia

Georgia is encouraging tourism to its regions and supporting the hotel industry by building several new hotels in four iconic areas of the country.

The state program ‘Host in Georgia’ is supporting the expansion of the regional hotel sector by financing 12 million GEL (about $6 million/€5 million*) in six new hotels.

The scheme encouraged small-time regional entrepreneurs to build new hotels and develop the hospitality industry in Georgia’s diverse regions.

Local company Toka Ltd will be responsible for building a hotel in Georgia’s Bakuriani ski resort. This will be the first hotel to be built within the ‘Host in Georgia’ program.

The new hotel will have at least 10 rooms and is due to open this December.

Another hotel will also open in Bakuriani and two more will open in Georgia’s second iconic Gudauri ski resort. A fifth hotel will open in Black Sea port town Poti and another in Ureki, which is also on the west coast and is famous for its magnetic black sandy beach.

Over the next two years the Entrepreneurship Development Agency (Enterprise Georgia) of Georgia’s Ministry of Economy will co-finance these new hotel projects together with small-time investors.

The investors will be required to take a bank loan to cover their share of the costs but their interest costs will be covered under the scheme. Those behind the ‘Host in Georgia’ program said it supported small-time investors to get into the hotel sector and encouraged the entrance of international hotel brands via a franchise or management contracts by co-financing royalty fees.

The Agency will co-finance 10 percent of the interest rate for two years for investors who take loans in the national currency, the Lari, while people who take loans in US dollar or in Euro will receive eight percent co-financing from the Agency.

The minimum amount a person can borrow is 500,000 GEL (about $213,040/€190,189*), while the maximum a person can borrow is one million GEL (about $426,080/€380,378*).

In the Bakuriani hotel example, Enterprise Georgia will jointly cover the interest costs of Toka Ltd’s loan for the first two years while the company itself will only pay the amount it borrowed ($270,000 USD) to build the new hotel.

Last year the Government of Georgia added the ‘Host in Georgia’ sub-component to its ‘Produce in Georgia’ state program to revive the country’s production industry and improve Georgia’s economic future.

Within the ‘Host in Georgia’ sub-program, the state will co-finance the business projects of entrepreneurs who want to build a new hotel in any region of Georgia except capital Tbilisi and Black Sea resort town Batumi.

*Currencies are equivalent with the latest National Bank of Georgia exchange rate.