Georgia, with its breathtaking landscapes, diverse climate, and rich cultural heritage, has become an increasingly popular destination for tourists from around the world. The country’s growing tourism sector presents lucrative opportunities for entrepreneurs, particularly in the resort business.
Whether you’re looking to rent a resort for a seasonal operation or a long-term venture, understanding the dynamics of the Georgian market is essential for success. This article delves into what you need to know about running a resort business for rent in Georgia, highlighting market trends, potential challenges, and key considerations.
In this article, we will look at the resort business in Georgia: what every person needs to know. And real estate expert Alexander Chikovani, who has a lot of experience in this matter, will help us in this.
The rise of Georgia as a resort destination
Tourism growth and Its impact on the resort industry
Over the past decade, Georgia has witnessed a remarkable surge in tourism. According to the National Tourism Administration of Georgia, the number of international visitors grew from 4.8 million in 2017 to over 9 million in 2019. Despite a temporary decline due to the COVID-19 pandemic, the tourism sector rebounded strongly in 2022, with 5.3 million visitors, reflecting the country’s resilience and appeal as a travel destination.
This rapid growth in tourism has fueled the demand for accommodations, particularly in resort areas like Batumi, Gudauri, Borjomi, and Svaneti. The diversity of Georgia’s natural attractions — from Black Sea beaches to ski slopes and mountain retreats — means that there is potential for year-round tourism, making the resort business a profitable venture.
|
Year |
International visitors (millions) |
Tourism revenue (USD billion) |
Hotel occupancy rate (%) |
|
2017 |
4.8 |
2.75 |
65 |
|
2018 |
5.5 |
3.22 |
70 |
|
2019 |
9.3 |
4.43 |
75 |
|
2020 |
1.7 |
0.64 |
30 |
|
2022 |
5.3 |
3.12 |
68 |
This table illustrates the fluctuation in tourism-related metrics over recent years, highlighting the sector’s strong recovery post-pandemic.
Popular resort destinations
Georgia’s diverse geography offers a variety of resort settings, each attracting different types of tourists. Batumi, located on the Black Sea coast, is known for its vibrant nightlife, casinos, and beaches, making it a hotspot for summer tourism. Gudauri and Bakuriani, on the other hand, are famous for their winter sports, drawing ski enthusiasts from across the region. Borjomi, with its natural mineral springs, and Svaneti, with its stunning mountain landscapes and cultural heritage, attract eco-tourists and adventure seekers.
Key considerations for renting a resort in Georgia
Market research and location selection
Choosing the right location is crucial for the success of your resort business. Each region in Georgia offers unique opportunities and challenges, depending on the type of tourists it attracts. For example, if your target market includes families and wellness tourists, a resort in Borjomi might be ideal due to its reputation for health tourism. Conversely, if you’re aiming for young, active tourists, a ski resort in Gudauri or a beach resort in Batumi might be more suitable.
Conducting thorough market research to understand the preferences and spending habits of tourists in your chosen area is essential. Consider factors such as seasonal demand, average length of stay, and local competition when selecting a location for your resort.
Legal and regulatory framework
Navigating the legal and regulatory landscape in Georgia is a critical step in establishing a resort business. The country has made significant strides in creating a business-friendly environment, with streamlined processes for obtaining licenses and permits. However, it is still essential to familiarize yourself with local regulations regarding property rental, employment, and taxation.
In Georgia, foreigners can rent and operate resorts without significant restrictions, but it’s advisable to consult with a local legal expert to ensure compliance with all relevant laws. Additionally, understanding the terms of your rental agreement, including duration, rent adjustments, and maintenance responsibilities, will help prevent potential disputes.
Financial planning and budgeting
Renting a resort requires substantial financial planning. Beyond the rental fees, you need to account for operational costs such as staffing, utilities, marketing, and maintenance. It’s also important to budget for unexpected expenses, such as repairs or fluctuations in tourism demand.
When calculating potential returns on investment, consider the seasonal nature of tourism in Georgia. Some resort areas may experience peak occupancy during specific seasons, while others may have more consistent demand year-round. Understanding these dynamics will help you set realistic revenue targets and manage cash flow effectively.
|
Resort area |
Average monthly rent (USD) |
Peak season |
Occupancy rate in peak season (%) |
|
Batumi |
$3,000 – $10,000 |
June – August |
85 |
|
Gudauri |
$4,000 – $12,000 |
December – March |
90 |
|
Borjomi |
$2,500 – $7,000 |
Year-round |
75 |
|
Svaneti |
$2,000 – $6,000 |
June – September |
70 |
This table provides an overview of average rental costs and occupancy rates in key resort areas, giving potential investors a snapshot of market conditions.
Staffing and management
The success of a resort business heavily depends on the quality of service provided to guests. Hiring skilled and experienced staff is crucial, particularly in areas such as hospitality management, customer service, and culinary arts. Georgia has a growing pool of talent in the hospitality industry, but competition for the best employees can be stiff, especially in popular tourist destinations.
In addition to hiring local staff, you may need to bring in specialized personnel, such as chefs or spa therapists, from abroad, depending on the type of resort you operate. Offering competitive salaries, benefits, and opportunities for professional development can help attract and retain top talent.
Managing a resort also involves ensuring that all operational aspects run smoothly, from housekeeping and maintenance to guest services and marketing. Consider whether you will manage the resort directly or hire a professional management company to handle day-to-day operations.
Marketing and promotion
Effective marketing is essential for attracting guests to your resort, especially in a competitive market like Georgia. Developing a strong online presence through a user-friendly website, social media, and partnerships with online travel agencies (OTAs) can significantly increase your visibility.
Additionally, consider offering special packages, discounts, or loyalty programs to attract repeat customers and generate word-of-mouth referrals. Collaborating with local tour operators, travel bloggers, and influencers can also help promote your resort to a broader audience.
|
Marketing channel |
Estimated cost (USD) |
Expected reach |
Conversion rate (%) |
|
Website development |
$2,000 – $5,000 |
Global |
2-5% |
|
Social media advertising |
$500 – $2,000/month |
50,000 – 100,000 impressions |
1-3% |
|
Online travel agency listings |
10-20% commission |
100,000+ potential guests |
3-7% |
|
Local partnerships and events |
$1,000 – $3,000 |
Targeted regional reach |
5-10% |
This table outlines the potential costs and effectiveness of various marketing strategies, helping you plan your promotional activities more efficiently.
Challenges and risks in the resort business
Seasonality and demand fluctuations
One of the primary challenges of operating a resort in Georgia is managing the seasonality of tourism. Many resort areas experience significant fluctuations in demand, with peak seasons often followed by periods of low occupancy. This can impact revenue stability and requires careful financial management to ensure profitability throughout the year.
For example, Gudauri sees a high influx of visitors during the winter months for skiing, but demand drops off sharply in the summer. In contrast, coastal areas like Batumi are bustling in the summer but quieter in the winter. Diversifying your offerings to attract guests during off-peak seasons — such as hosting events, offering wellness retreats, or promoting local festivals — can help mitigate the effects of seasonality.
Competition and market saturation
As Georgia’s tourism industry continues to grow, competition in the resort market is intensifying. New resorts and hotels are being developed in popular areas, leading to market saturation in some regions. This increased competition can drive down prices and make it more challenging to maintain high occupancy rates.
To stand out in a crowded market, focus on differentiating your resort by offering unique experiences, superior service, and personalized attention to guests. Investing in amenities that cater to specific niches, such as eco-tourism, adventure tourism, or wellness, can also help attract a dedicated clientele.
Regulatory changes and political stability
While Georgia is known for its stable and business-friendly environment, it is essential to stay informed about potential regulatory changes that could affect your resort business. Changes in taxation, property laws, or tourism regulations could impact profitability or operations.
Additionally, while Georgia has enjoyed relative political stability in recent years, it is still important to monitor the broader geopolitical situation in the region, as any significant instability could affect tourism and, by extension, the resort industry.
Conclusion
Investing in a resort business for rent in Georgia offers substantial opportunities, driven by the country’s booming tourism sector and diverse natural attractions. However, success in this venture requires careful planning, thorough market research, and an understanding of the local business environment. By selecting the right location, managing finances effectively, and differentiating your resort in a competitive market, you can tap into the potential
