Home / Business / Hotel Industry Development component – Host in Georgia

Hotel Industry Development component – Host in Georgia

The new Hotel Industry Development component of the state program ‘Produce in Georgia’ has already noted huge successes.

Entreprise Georgia already supported 44 business entities, with a total investment volume of 128.7 million GEL and based on these 44 new hotels, more than 1,300 people will be employed and an additional 1,300 new rooms will be added to the Georgian hotel industry.

The new hotels will be build in Bakuriani, Gudauri, Poti, Ureki, Nikortsminda, Kazbegi, Sagarejo, Ginio, Shekvetili, Telavi, Tskaltubo and Kutaisi.

Entrepreneurs operating in these regions of Georgia can benefit from this new program component. The Georgian government made the decision, based on market demand, to promote the hospitality business across the country in order to attract tourists, create jobs and help the development in each region.

The scheme promotes the entrance of international hotel brands via franchise or management contracts by co-financing royalty fees.

Using the Hotel Industry Incentive, an entrepreneur who is interested in financial support has the opportunity in any region of Georgia, excluding Tbilisi and Batumi cities, to:

  • Build a New Hotel
  • Conduct an expansion or re-equip existing infrastructure
  • Sign a franchise contract with an international hotel operator and bring a foreign brand to the Georgian market

From the Entrepreneurship Development Agency under The Ministry of Economy and Sustainable Development, the co-financed will be implemented in a following way:

  1. Building a hotel, as well as infrastructure upgrades/re-equipment of the hotel
  • The co-financing of a commercial loan’s annual interest rate by 10% (or in foreign currency, 8%) for the first two years

The minimum value of the loan – 200,000 GEL;

The maximum value of the loan – 2, 000,000 GEL;

Collateral participation in the first four years, the loan volume by 50%;

  • Co-Financing for consulting services
  1. Co-financing a Franchise Agreement
  • Franchise / management contract with “Royalty Fees” co-financed for the first two years (no more than 300,000 GEL)
  • Co-Financing for consulting services
  1. Hotel development by the “franchise” agreement
  • Franchise / management contract with so-called “Royalty Fees” co-financed for the first 2 years (no more than 300,000 GEL)
  • The co-financing of commercial loan’s annual interest rate by 10% for the first two years

The minimum value of the loan – 200,000 GEL;

The maximum value of the loan – 5, 000,000 GEL;

  • Collateral participation in the first four years, the loan volume by 50% (No more than 250,000 GEL)
  • Co-Financing for consulting services

It should be noted that an entrepreneur can take advantage of both co-financing the loan’s interest as well as current tax co-financing when bringing a brand using a franchise/management contract.