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Batumi: new trends in the real estate market

პონტუს 2
Lika Megutnishvili
30.11.23 12:15
1078

Batumi, situated along the Black Sea coast and widely regarded as an appealing city, has consistently captured the interest of investors. This can be attributed to a variety of factors.

Investment Appeal:

Batumi has garnered numerous accolades for its investment appeal, repeatedly earning the title of the best investment city and securing a top position on Forbes' prestigious ranking list. In 2022, the World Travel Awards recognized Batumi as the rapidly advancing tourist destination in Europe. Additionally, Batumi Airport claimed the 7th spot in Skytrax's list of top airports in Europe.

Growing Investments:

The surge in investments in Batumi can be attributed to the affordable rates of investment properties and a tax system that offers flexibility. Notably, apart-hotels have emerged as a key catalyst for investment growth. In 2018, Batumi witnessed the sale of 10,000 apartments, a figure that surpassed 16,000 in 2022, according to data from NAPR.

Transformation of the Real Estate Market:

It's worth mentioning that the notable increase in the apartment supply has brought about substantial transformations in the market. Although prices experienced a swift ascent until 2022, a subsequent decline ensued, reverting to the 2019 average, as per NARR data. This trend suggests that the real estate demand in the market may have reached saturation. Nevertheless, Batumi remains an appealing investment destination, retaining its allure for investors.

Tendencies of the Tourism and Hospitality Industry:

Interestingly, the demand for real estate persists, albeit with a shift towards a different sector – luxury hotel investment properties. Post-pandemic, Batumi's hotel industry has witnessed a substantial upswing, with a noteworthy 67% of hotels maintaining consistent occupancy rates. Additionally, average room rates have surged to their highest level in six years, according to data from STR Global.

As for 2021, Batumi's 242 hotels could only provide 5.38 beds per 1,000 visitors, a figure significantly lower than the global market average of 15 beds. Analyzing this data alongside the 2022 tourist visit statistics from the Georgian National Tourism Agency (GNTA) reveals intriguing trends in tourist behavior. The 2022 report highlights that the top five countries with citizens spending the most money in Batumi include Iran, the United Arab Emirates, and Saudi Arabia. This suggests that these nations are the primary guests of luxury hotels in the city.

New Possibilities of Investments:

With these statistics as a foundation, the Georgian development firm, Pontus Development, has chosen to venture into the construction of a 5-star hotel. This establishment will bear the Rotana brand, hailing from the United Arab Emirates.

Unique Features of the Project:

Both Pontus Development and Rotana express a strong belief in the Pontus Rotana Resort & Spa Gonio project investment viability. Several factors have been considered to establish the hotel's competitiveness in the market.

The feasibility of the project is not only substantiated by the premium pricing of 5-star accommodations in the United Arab Emirates but is also reinforced by a pragmatic forecast predicting year-round occupancy. This forecast is underpinned by several compelling arguments:

  1. The Rotana brand enjoys widespread popularity in the Gulf countries, and its entry into the Georgian market introduces a new dimension to the luxury segment, previously absent in Georgia.
  2. With over 700,000 active members in the Rotana Club, the hotel anticipates a consistent influx of devoted visitors.
  3. A key determinant of the hotel's anticipated success is its status as the first resort hotel within the Rotana chain in Europe and the inaugural Rotana establishment in Georgia, complete with a casino. This development creates additional prospects for attracting tourist groups beyond the peak season.
  4. Being recognized as the "best business hotel brand in the Middle East," Rotana ensures the project's appeal to both leisure and business travelers. The hotel is equipped with a spacious conference hall and all necessary amenities to cater to the needs of business visitors.

This project represents more than just a singular investment; It constitutes a substantial contribution to the prosperity of Batumi and its surroundings, positioning the city as a prominent figure on the tourism and investment landscape. Further details about the project can be accessed through the following link.