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Focus REPORT: GEORGIA


hotels in adjara region hotel Sheraton


Intourist Palace Radisson Hyatt Hilton


Kempinski Marina


Sanapiro


Hotel ERA Hotel Alik Sputnik OASIS


CAMEO


category 5* 5* 5* 5* 5* 5*


n/a n/a n/a n/a n/a n/a n/a


Meanwhile in 2010 the economy rebounded and GDP stood at 6.4 per cent. Unemployment is around 16.4 per cent and 31 per cent of the population are below the poverty line.


Georgia’s main economic activities include the cultivation of agricultural products mainly grapes, citrus fruits and hazelnuts, mining of copper plus a small industrial sector. Construction, banking and mining sectors are growing. The country imports nearly all its supplies of natural gas and oil products but also has hydropower plants to overcome shortages.


Today the main problems in Georgia seem be the dire state of the economy and secessionist revolts in the outlying provinces of Abkhazia and South Ossetia. The country is also renowned for its problems in tax collections but since the government came into power in 2004 things have been improving. For the past few years the Georgian government has been undertaking several economic reforms in a bid to create an attractive business environment and boost the economy. The main aim is to create new jobs, stimulate business activities and increase the welfare of citizens.


For one, the country’s tax system has been overhauled since 2005 reducing the number of taxes from 21 back in 2004 to just six (Income tax, Corporate income tax, VAT, Excise tax, Tax on Import and local tax which includes property tax.). There is no capital gains tax, inheritance or wealth tax and Georgia has a low flat tax rate of 20 per cent income tax which is due to be reduced to 18 per in 2013 and to 15 per cent by 2014. Standard VAT


Your


city Batumi Batumi Kobuleti Batumi Batumi Batumi Batumi Batumi Batumi Batumi Batumi Batumi Kvariati


rooms 205 145 156 166 n/a 344 53 96 40 52 54 90 50


is 18 per cent, whilst corporate income tax is 15 per cent. Georgia is the fourth least taxed country among 66 countries ranked.


Over the last five years the World Bank and other institutions have lent around US$101m to Georgia to finance the rehabilitation of nearly 700km of road infrastructure, whilst Tbilisi and Batumi have two modern airports.


There are around 260,000 businesses operating in Georgia of which more than 4,600 have been established with foreign capital. Today with a pro-business legislation, liberal tax code, solid workforce and legal framework to protect investors, the country is looking to develop opportunities here. One such area is the leisure, hotel and gaming areas.


Although the hotel sector is in the early stages of development in Georgia there are currently six internationally branded hotels on the market out of 386 hotels (around 9,300 rooms). The turnover for the hotel industry in Georgia amounted to GEL123.4m in 2010.


Marriott, Sheraton, Radisson Blu, Citadines and Holiday Inn are already operating in Georgia, whilst Intercontinental, Kempinski and Hilton are in the process of constructing their facilities. There is also talk of a newcomer from Ritz Carlton in Batumi by 2015, whilst Trump Towers are also anticipated to appear in Georgia.


The hotel supply is concentrated in Tbilisi and Batumi and there are currently 120 hotels and guest houses and five luxury


status Completed Completed


Under construction Under construction Under construction Unknown Completed Completed Completed Completed Completed Completed Completed


casino yes Yes


Closed


hotels in Tbilisi, which between them offer 5,000 beds. The five luxury hotels are Courtyard Marriott, Tbilisi Marriott, Sheraton Metekhi Palace, Radisson Blu and Holiday Inn.


The city will see another three global hotel brands appear over the next few years – Intercontinental, Hyatt Tbilis Hotel and Kempinski – all due for completion this year. Meanwhile in Batumi there are six luxury hotels.


The government introduced Free Tourism Zone legislation in 2007 to encourage foreign investment and develop regional development initiatives in a bid to encourage hotel and casino construction in the outlying parts of the country. At the moment there are several government packages to boost the country and they also offer particular investment packages for hotel and casino developments.


After success with Kobuleti as a FTZ project the government is also offering investment opportunities in Mestia for the development of the Four Season Ski Resort, Tskaltubo for the spa and wellness resort and Gudauri for the development of its ski resort. In addition the government is also focusing on the region of Samegrelo-Zemo Svaneti and is currently promoting Anaklia.


Anaklia is a seaside resort in Western Georgia bordering the Black Sea and Kolkheti National park, and it is being earmarked as a growth area for casinos and as such investors are being offered free casino licences. The town is just 20 km, from Tbilisi and the government via its Invest in Georgia programme is


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In 2008 the Ministry of Finance gave out 1,290 permits in the gambling business and the duties paid to the state budget came to GEL21.5m. This was broken down to 935


permits for gaming salons and


GEL7.4m paid to the budget; 99


permits for lotteries


and GEL594,00 and 12 permits for lotto and GEL72,000 paid.


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