Home / Tourism / Why Hotel Suites are Expensive in Georgia
Hotel stairs

Why Hotel Suites are Expensive in Georgia

Georgia, as the best tourism destination country, is able to offer many opportunities to visitors, including picturesque nature, diverse landscape, Caucasus ranges, Black Sea subtropical zone, rivers and waterfalls, underground cities, resorts and mineral waters, historical monuments, cities and settlements, traditional Georgia hospitality and distinguished Georgian cuisine – all these factors make Georgia a genuinely tourism country.

Currently, tourism sector remains in a germ condition and the development process proceeds heavily and slowly amid the ongoing reforms. With its natural resources Georgia is able to compete with France, China, Spain, Italy and many other developed countries and become most attractive country for tourists in the Caucasus.

Along with tourism sector development, there are many other problems that are concealed frequently, even by state structures, while it is their direct obligation to provide overall preconditions to duly develop the sector. The state receives huge financial support from donors, but problems remain unresolved anyway. This signifies that either assistance is insufficient or the process is carried out too slowly. We will name several problems and discuss one of them. In this respect international organizations and donors should enhance support.

Tourism Sector Problems and Recommendations:

  • Absence of Law on Tourism
  • Absence of Tourism Registration System
  • Unsatisfactory Safety Level in Country
  • Heavy sanitary-hygienic condition at accommodation places, tourism places and resorts
  • Disordered road and transportation system
  • Undeveloped network of hotels and agencies
  • Problems with water supply and sewage systems in regions
  • Absence of perfect information database on Georgia’s tourism potential
  • Lack of competent staff in tourism sector

Tourism Infrastructure:

  •  Inappropriate equipment of Food Outlets
  • Insufficient tourism-information desks and signs;
  • Problem with diversity of tourism products
  • Quality Monitoring

Absence of tourism registration system is one of the major problems in Georgia, because, currently, it is impossible to register revenues from tourism sector.

Lack of due infrastructure and registration system makes it impossible  to register revenues of private houses in resorts. All these factors precondition that  state budget revenues from tourism sector are very low. At the same time, high rate taxes, including utility expenses, VAT and income tax and profits tax significantly complicate condition of hotel business. This is one of the reasons why hotel suites are expensive in Georgia.

Tax system should be reformed and seasonal taxation mechanism should be introduced temporarily so as hotels have smoother tax rates in off-season period. Similar decisions will develop this business in regions and revenues will be registered accurately.

All these tendencies receive chaotic and massive character. You cannot see even 10 hotels of 100 ones in highland regions, which would be registered as taxpayers with cash register or bank account and they are right. It is unimaginable that owners of small houses transform their property into guest-houses, pay 2-3 times expensive utility expenses and  pay the mentioned high taxes in off-season period.

Even those hotels that are registered in taxation system frequently are forced by this problem to hide revenues and this problem is relevant in not only regions. Even a part of Tbilisi-based hotels face the same problem and they frequently have to choose whether to commit financial crime. For example, several visitors entered  one of the hotels in the center of Tbilisi in the evening and asked for free suites, paid cash, but they were not given any bill or document proving that specific persons had stayed at the hotel. This is an usual practice in many hotels.

Similar problems create difficulties to tourism companies too that cannot accommodate visitors to hotels with similar violations, as similar facilities cannot issue any  documents proving that tourism company has taken costs and, consequently,  has to pay higher profits tax. Today, Georgia lacks for suites and beds and all these factors frustrate public involvement in the tourism sector. It is impossible to develop guesthouse business in regions if Government does not revise taxation strategy.

The mentioned problem may be resolved by active involvement of specialists, tax and economic experts, government officials in tourism sector. This is not a new problem and there are many other obstacles in tourism sector.

Absence of law on tourism is a major challenge. This law was prepared in 1997 and terms were revised in 1998. Today we assert tourism is a priority direction, but it requires constitutional protection.

Problem with toilets. No special decree is are required to remove this awkward inconvenience. Parking problems, certification of guides, licensing of travel companies. Heavy sanitation-hygienic condition in underground walkway, disordered road and transport system, lack of competent staff in tourism field, lack of perfect information database about Georgia’s tourism potential – the list is really impressive.

Political will+active participation of NGO sector will enable to resolve problems in a short period. It is not difficult to determine relevant problems for coming 1, 2, 3 years and even to write a new tourism law in 2017. To this end, we should definitely ask international organizations to provide due consultations to harmonize Georgian legislation with European system and legislation of all peculiar tourism countries.

Toilets and sanitary-hygienic norms in municipalities and capital city may be resolved in a simple way. Qualification tests may be also held for guides once a year. It is also easy to explore full potential of Georgia and popularize it.

Tourism sector comprises much employment potential and even one project may employ 10 000 citizens. The main thing is an idea and specific project to achieve the objective. Tourism field is not a separate direction and it derives from travel of ancient people. It involves everything that Georgia offers to the world: cuisine, eco, ski, extreme tourism and so on. This is huge potential for our country and all of us. And population of Georgia and all lovers of Georgia should jointly develop this direction.

We will defeat unemployment problem only in this way.

Article by Giorgi Kvezereli