Activity of famous leasing and rental online marketplace Airbnb has grown on Tbilisi market.
Over the last two years, the number of Airbnb listings in Tbilisi has more than tripled from 2,100 properties in 2015 to 7,000 this year.
Almost 4,300 active hosts are now offering a wide array of accommodation options. The most prevalent are one and two-bedroom apartments, which together account for over 60% of listings in Tbilisi.
According to Galt & Taggart, there are almost 1,000 active hosts who provide two or more listings, with as many as 100 hosts offering five or more. It is safe to say that buying apartments in Tbilisi with the aim of securing rental income via Airbnb has become a niche business model.
Only about 10% of its worldwide bookings are for business travel, so the largest impact is felt in the leisure segment, where budget/economy accommodation is dominant.
“Based on our estimates, there are approximately 3,500-4,000 hotel rooms in the budget/economy segment in Tbilisi. We consider entire home listings ranging from studio size to 3-bedroom apartments on Airbnb, which currently add up to almost 4,700 listings, to be competing directly with this segment. Despite the strong growth in supply, occupancy rates for Airbnb rentals in Tbilisi have been on the rise. The 50 th percentile of listings in June 2017 was at 50% occupancy (+32ppts y/y), while the top 10% of properties enjoyed occupancy rates of 93% and higher (+15ppts y/y). Average nightly rates in June 2017 for one and two bedrooms ranged between US$ 19 and US$ 25, while RevPAR for all available listings in Tbilisi was at US$ 23 for the month of June, up 30.6% y/y. Based on our estimates, the 50th percentile, in terms of occupancy and RevPAR, of Airbnb listings is largely in line with the performance of budget/economy hotels in Tbilisi”, – the report notes.