The Georgian Federation of Hotels and Restaurants predicts the price reductions as a result of the removal of the tax liabilities for tourism business.
President of the Association Shalva Alaverdashvili states “Commersant” that the tax concession applies to apart hotels and those companies which will build apart hotels and then manage them will be exempted from VAT.
According to Alaverdashvili, by removing the 18% VAT, the pricing policy will be regulated on the market, especially in Batumi, where a few apart hotels are placed.
Shalva Alaverdashvili says these tax changes will lead to price drop as apart hotels are a private property and it should be rented out, the country will move to mass tourism development.
In addition, Alaverdashvili notes that the removal of tax liabilities will help development companies to implement more projectsand afterwards manage them. He explains that so far the management company paid VAT, then income tax, the amount wasdistributed among owners and a management company had a meager income.
In Shalva Alaverdashvili’s opinion, hotel business in Georgia is given more opportunity for the development, and theconstruction of large apart hotels should be expected in Tbilisi as well as in Batumi. Alaverdasvili adds that other types of concessions for the hotel business are not discussed at the stage so far.