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New Directions in "Produce in Georgia" Program

New Directions in “Produce in Georgia” Program

An interview with Deputy Minister of Economy of Georgia Keti Bochorishvili

– As reported, “Produce in Georgia”  program will include anew direction – tourism. This is a growing trend, although it is concentrated in Tbilisi and Batumi. Will this program contribute to the expansion of the hotel business in the regions, as well as growth of low-cost  3-star hotels across the country?

– In recent years, the number of tourists arriving in the country is growing steadily, and Tbilisi and Batumi are especially of their interest. Although, there are other tourist destinations where  the number of hotels is not still sufficient in order  major international tour operators to start working  for them.

The program “Produce in Georgia” was launched  almost a year ago, and its main idea  is to stimulate production. The project is constantly amended, we have a constant contact with businessmen and try to add the individual components on the basis of their interests.

International branded hotels in the regions are of great importance, as it will allow the regions emerge from the shadows and appear on the world map as their marketing and advertising will be  carried out by the management of large companies. If you look at the statistics, branded hotels occupancy is 20% higher, they have international booking system, they are represented throughout the world, management has extensive experience in hotel management  and  service, etc.

– When we talk about bringing the branded hotels, it is obvious that it will take much more money, including for business. What will be the role of government in this process?

– If we compare the costs for attracting big brands with costs for  marketing and service improvement, the difference will be minimum, moreover, it will cost even a little cheaper. So if everything is planned appropriately from the very beginning, the costs will be distributed much more economically.

– What is the limit on financing of each project?

– This is a loan in the amount of  GEL 500 000 to 5 million. Operating hotels which plan to expand may  also  involve in the  program. There are several criteria the beneficiaries will have to meet. In particular, he must own the land on which it is planned to build a hotel, he should negotiate with international partners, must have a relationship with the banks. Aid will be provided to entrepreneurs in such components as the co-financing of interest payments for the loan and payment of the cost of the brand within 2 years.

Our goal is  to help businesses get on the  feet and start working. It must be designed so that after two years it  no longer needed any help from the state. A program promoting Georgian regions is not designed for  Tbilisi and Batumi, where the hotel business  is very well developed and our intervention is not required. Our task is  to attract tourists to other regions and to make Georgia the country of all- year-round tourism and not seasonal, as it is now.

– What is the budget of the program?

– “Produce in Georgia” program’s budget is GEL 10-16 mln. It includes a component to support entrepreneurship and the develop  the hotel sector. We must understand that the results should not be expected today or tomorrow. This is a long-term program, and we’ll  see the first results no earlier than in one year. Moreover, at this stage the issue to include the hotel sector in the program is preparing for submission to Parliament. Most likely, it will take effect no earlier than 1 August.

– Whether foreign investors will be able to  use this program, and will the local businessmen find themselves  in a losing position?

– Conversely. Foreigners have always had the opportunity to invest, and the Georgian business has always had a problem of unavailability of finances. From this point of view, there will be no restrictions. The project is designed for  all those who work in the territory of Georgia. Most importantly,   the project to be  effective and create jobs. Anyone who has experience and meets the criteria can participate in the program.