Georgia’s hotel industry is under growing pressure from rising operating costs and ongoing uncertainty, according to Tamar Bagdavadze, founder of Coste Hotel Group. Speaking to BMG, she said higher wages, inflation, and increasing service costs have significantly reduced profit margins for hospitality businesses.
Bagdavadze also pointed to geopolitical and domestic political developments as major challenges, saying the hospitality sector is often the first to feel the impact of instability. “We’re constantly in a position where it feels like we’re surfing and fighting the waves,” she said, describing the industry's struggle to adapt to changing conditions.
Her comments come as Georgia’s tourism sector recorded weaker performance in the second quarter of 2026. According to the National Tourism Administration, international visitor trips fell 4.5%, while tourist visits declined 2.7% year-on-year.
The decline was largely attributed to conflicts in the Middle East, which led to a 49% drop in visitors from Iran and an 11.6% decline from Israel. Visitor numbers also fell from Turkey, Armenia, and the United States, with total international visits in the first half of 2026 decreasing 3.3% compared with the same period last year.
