Investment Opportunitiesin Georgia - Tourism

Georgian National Investment Agency(GNIA)

2012

Tourism

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Fast growing sector▪ Number of visitors increased 33% in 2010 and 39% in 2011 reaching 2.8 million▪ Georgia attracts visitors mainly from neighbors: Turkey (26%), Azerbaijan (25%), Armenia (25%), Russia (10%)▪ Average stay ~ 5 nights / Average spend of USD 1,500▪ Overall capacity of < 10,000 rooms▪ Already operating hotels - Sheraton, Radisson, Marriot, Holliday Inn, (under construction - Cempinski, Hillton) etc.

Potential▪ Youth Olympics in 2015▪ Free tourism zones – summer resorts▪ Availability of gambling business – gaming is partially or completely banned in Russia, Ukraine, Azerbaijan,

Kazakhstan, Turkey, Israel, Iran, Iraq▪ 8 national parks▪ 2400 springs of mineral waters

Georgia is expecting significant growth trajectory in tourist arrivals

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0,61,0 1,1 1,3 1,5

2,02,8

3,7

4,9+38% p.a.

+33% p.a.

+29% p.a.

2013F2012E2011201020092008200720062005

International arrivals have seen ~40% year-on-year growth

Total international tourist arrivals # of arrivals into Georgia

International luxury hotel chains doing well; more are coming to the market

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Verbatims of international hotel brands in GeorgiaUpcoming international hotel brands before 2015

“ We are very optimistic as demand has been increasing rapidly. Hotel occupancy hovers around 85%. Our guests come from all around the world representing various sectors including business, sportmen and tourists”

– Oto BerishviliSales & Marketing Manager

“We have seen significant increases in occupancy rate and financials since 2010. This year [2012] high season has seen a very promising start. We have advance reservations booked for almost the whole summer”

– Omer SubasiGeneral Manager

“We have seen 7-8% more guests in our hotels every year. Business and leisure travelers are our two biggest client group and they come from all over the world. Best occupancy period is summer from May to September”

– Alexander KvaratskheliaMarketing Manager

Batumi

Tbilisi

Batumi

TbilisiBatumi

Tbilisi

Hotel Chain Hotelier’s assessment of performance Location

Investment opportunities in tourism sector

Expansion of summer ”sun and beach” franchise focusing on high-end segment

All inclusive summer resorts New master resort

development

“Sun-beach” resorts

Description

Winter ski resorts Summer mountains resorts Regional Casino City

Potential location

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Batumi Anaklia KobuletiOther Black Sea

locations

Mestia Gudauri Bakuriani Goderdzi

Development of large-scale integrated casino complex to Serve regional markets.

Include hotels, casino entertainment, family Services and shopping Fiscal invesntives

available

Master development of winter resorts with unique profile equivalent to the Alps

Government is fully committed to provision of basic infrastructure

Four season resort value preposition

Majestic landscapes allowing for a wide range of summer tourism activities such as trekking, horse riding, bird watching and river racing

Mestia Gudauri Bakuriani Goderdzi Kazbegi Other locations

Batumi TbilisiOther locations

Development of Spa Resorts

Include hotels, Different types of Clinics, fitness, Outdoor activities

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Tskhaltubo AkhtalaOther locations

5Spa Resorts

3

Investment opportunities in Free Tourism Zones – Anaklia example

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Upcoming tourist destination

▪ Breathtaking landscape of Black Sea’s sandy beach▪ Beautiful Natural Reserve and surrounding wetlands▪ Biggest aqua park in the Caucasus▪ Wide range of tourist activities from sun & beach, cultural

heritages to adventure activities▪ Favorable and warm climate

▪ Prepackaged hotel projects▪ Free casino license for hotel capacity over 80 rooms▪ Full engineering utilities networks (water, electricity, gas)▪ Free land for development may be applied▪ Tax exemption may be applied

▪ 30-minute flight from Tbilisi▪ Easy access from highway connecting Anaklia with Batumi and

Poti

▪ 4-km long seaside boulevard▪ Fully functional utilities network▪ Pedestrian bridges▪ Concert halls and theaters

State-led infrastructure development

Easy access and modern infrastructure

Incentives

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Traditional tourist destination

▪ Georgia’s seaside health resort on Black Sea coast▪ Unique Fine Forest “Pichvnari” as part of Kolkheti Valley▪ Biggest amusement park in the Caucasus▪ Favorable and warm climate

▪ Free Hotel Master Plan▪ Fully provided utilities network and outdoor infrastructure▪ Free Land and tax exemption may be applied

▪ 30-minute flight from Tbilisi▪ Easy access from highway connecting Anaklia with Batumi and

Poti▪ The lands available are located 140 meters from Black Sea in

“Pichvnari” (Fine forest) area

▪ Pre-planned development area of 11.3 ha for 30 hotels▪ Ready designs and fast construction (completion with 15

months)▪ Affordable investment range of USD 1-3 million

Prepackaged projects

Easy access and modern infrastructure

Incentives

Investment opportunities in Free Tourism Zones – Kobuleti example

Investment opportunities in Georgia’s upcoming ski destination - Mestia

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Four Season Mountain Resort Mestia has a great potential to become a place for year–round fun and

adventure. Summer in Svaneti offers an array of stunning landscapes, lush and wild

flora, rare wildlife, flowing rivers and lakes.

Massive investment opportunities in Tetnuldi, Mestia▪ 84 EUR milion for ski resort cluster with skier carrying capacity of 7,900▪ 15,500 beds of different types (resort village type, single-family

units, multi-family units) and shopping centers to be developed

Ideal natural endowment conditions▪ 5 months of permanent snow▪ Average temperature in winter of -6.40C▪ Elevation range of 1400 – 2300m▪ 12.6 hours of average daylight hours▪ Olympic downhill piste standard with 988m vertical drop ▪ Majestic alpine plateau landscape next to UNESCO heritage site

Ski facilities in place▪ New ski cable way of 1400m length with capacity of 1000 passengers

per hour▪ 6 ski lifts in the pipeline

Master infrastructure established▪ Mestia international airport▪ Ready utilities infrastructure: water, sewage, energy▪ “Renaissance” of city center▪ Mestia Development concept was prepared by famous international

company Ecosign –Mountains Resort Planners

Investment opportunities in Georgia’s existing ski destination - Gudauri

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Massive investment opportunities in Gudauri▪ Additional hotel capacity of different types

(resort village type, single-family units, multi-family units)

Established brand name in winter tourism in Georgia▪ No.1 ski destination in Georgia▪ 1.5-hour drive from Tbilisi with improved road▪ 5 months of permanent snow▪ One of finest high-altitude powder snow in

Europe▪ Elevation range of 2000 – 3300m▪ 20+ km of ski tracks with significant expansion

opportunities▪ Heliski as a Gudauri’s winter sport trademark▪ Ready utilities infrastructure:

water, sewage, energy

Four season resort value proposition▪ Majestic landscapes allowing for a wide range

of summer tourism activities such as trekking, horse riding, bird watching and river racing

Investment opportunities in Georgia’s upcoming ski destination – Goderdzi

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Investment opportunities in Goderzi, Adjara▪ Four-season ski resort cluster with skier carrying capacity

of 7,000▪ 633-ha area with tourism infrastructure developed by the

government (investment worth EUR 11 million)▪ Accodomodation of different types

(hotels, apartments, villas, multi-family townhouses, pensions) and shopping centers to be developed

▪ Non-winter tourism facilities e.g. golf course

Ideal natural endowment conditions▪ 5-6 months of permanent snow▪ Elevation range of 1700-2400m▪ 150 hectares of skiable terrain▪ 35 km of pistes

Four-season resort value proposition▪ Spring: golf-course, forest hiking, green lake park, Alpine

Wildflower display, mineral spring▪ Summer: Scenic mountain-top lookout, bear sanctuary and

nature center▪ Autumn: Artist’s studio village, cha-cha

distillery, demonstration farms, traditional workshops

Good accessibility▪ 2-hour drive from Batumi International Airport▪ 3-hour drive from Tbilisi International Airport

Tskhaltubo – Potential for one of the best spa resorts in the world

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Renowned destination in Caucasusfor health treatments since 8th century through Soviet times▪ Existing and operating sanatoriums and

baths receiving visitors on a daily basis▪ Capacity to host 15,000 tourists on daily

basis

Rich natural endowments▪ Vast reserve of thermal waters with unique

therapeutic qualities▪ Subtropical climate (warmest thermal spa

area in Eurasia), low elevation, rich nature▪ 2000+ hours of sunshine annually

Easy access with master infrastructure established▪ 7 km away from Kutaisi – 2nd largest and

Parliamentary Capital of Georgia ▪ Kutaisi international airport▪ New highway Tbilisi – Kutaisi - Tskhaltubo▪ “Renaissance” of city infrastructure

Investment opportunities – Renovation and redevelopment of 8 existing sanatoriums into luxury spa resorts▪ Land area ranges from 15,000 to 122,000 sqm▪ Building area ranges from 1,500 to 9,070 sqm▪ 99%+ stakes owned by the government

Investment opportunities in gambling business

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▪ Legislation in surrounding countries prevents people from enjoying gambling facilities, but Georgia will provide them with high quality gambling experience similar to world class gambling destination as Las Vegas or Monte Carlo

▪ Countries where gambling is completely or partially prohibited: Russia, Ukraine, Turkey, Azerbaijan, Iran, Israel, Kazakhstan etc.

▪ Easy access by Land, Sea and Air makes Georgia attractive gambling destination for all above countries and beyond.

▪ Gambling business is fully decriminalized.

▪ Integrated Regional Casino City proposition– 4-5 star hotels– Full-serviced casino facilities– Integrated sporting and recreational facilities: golf

courses, water park, shopping complexes, spa facilities, entertainment center

– Full range of services offered from conferences & meeting, events management, childcare services

Fiscal incentives available

Regional countries banning gambling activities either for locals or everyone country-wide

▪ xx

Russia

Kazakhstan

Uzbekistan

Afghanistan

Pakistan

IranIraq

Syria

Turkmenistan

Kyrgyzstan

Tajikistan

CaspianseaTurkey

Black sea

Ukraine

IsraelMediterranean sea

India

China

Lithuania

EgyptSaudi Arabia

LibyaAlgeria

Tunisia

ItalyFrance

BulgariaRomania

Germany

▪ xx

Russia

Kazakhstan

Uzbekistan

Afghanistan

Pakistan

IranIraq

Syria

Turkmenistan

Kyrgyzstan

Tajikistan

CaspianseaTurkey

Black sea

Ukraine

IsraelMediterranean sea

India

China

Lithuania

EgyptSaudi Arabia

LibyaAlgeria

Tunisia

ItalyFrance

BulgariaRomania

Germany

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GEORGIAN NATIONAL INVESTMENT AGENCY

8, Rustaveli avenue, 0118 Tbilisi, Georgia

Tel/Fax: (+995 32) 2 281 196

E-mail: enquiry@investingeorgia.org

www.investingeorgia.org