Shalva Alaverdashvili, founder of the Hotels Federation, says the hotel sector has become far less attractive for investors in recent years. He notes that in Tbilisi, for example, there is now an oversupply of hotel rooms, which reduces investment appeal in hospitality.
According to Alaverdashvili, regional instability, wars, and global uncertainty directly impact tourism first, making hotel revenues increasingly unpredictable. He cites Dubai as a striking example, where once-busy hotels are currently empty, affecting many Georgian workers employed there.
He explains that the hotel business has shifted from recovering investments in 7–8 years to needing 20 years or more - a major deterrent for investors. Banks also view the sector as high-risk, tightening lending requirements.
Alaverdashvili says only luxury, five-star hotels may still be worth considering, as high-budget travelers continue to show stronger demand. In contrast, new mid-range (3–4 star) hotels, especially in Tbilisi, no longer make sense, as the city already has around 10,000 more rooms than it currently needs.
