PREPARED FOR: Entertainment Market in Georgia 2017
CONTENT Executive Summary 3 Country Profile 4 Business Environment 5 Economic Outlook 6 Tourism Overview 8 Casinos 14 Gaming Regulations in Georgia 15 Food & Beverage 16 Nightclubs 19 Stadiums & Arenas 20 Fitness & Swimming 22 Theatres & Concert Halls 23 Conclusions and Outlook 24 Appendix 1 - Real Estate Registration and Construction Permit 25 Appendix 2 - Primary Information Sources, Data Used for the Study, Definitions and Assumptions 28 Disclaimer 30 Colliers Georgia at a Glance 31 BATUMI, GEORGIA Colliers Global Stats at a Glance 32 2
EXECUTIVE SUMMARY Georgia s diverse environment, cultural background, and business-friendly legal framework form a strong base upon which the country is building a lucrative entertainment industry. Recent governmental reforms have worked to support that base further, and revealed the country s desire to continue developing in to a world-renowned entertainment destination. Most of Georgia s entertainment offerings are firmly connected with the growing tourism industry. Tbilisi offers the majority of specialized facilities, followed then by Batumi and Kutaisi, though other regions of Georgia also offer a wide range of entertainment possibilities. Georgia s booming gambling industry has taken a giant leap forward in recent years. A number of casinos now operate successfully in Tbilisi and Batumi, with more anticipated openings in the near future. While neighboring countries are restricted by tight legal regulations, Georgia s more open approach has allowed it to become a demand destination for gambling tourism. Unlike a decade ago, Tbilisi is now a famous party city, and several local nightclubs have been successful enough to gain worldwide recognition. Often mentioned among the top European clubbing cities, Tbilisi s clubs are active year-round, while most of Batumi s venues remain seasonal. With world-class infrastructure, Georgia hosts a number of international sporting events each year. A number of modern stadiums and sport arenas are added to the supply every year, and several some large-scale projects are currently under development. Similar to sports venues, fitness and swimming facilities are also being actively developed. Several international fitness brands operate in Tbilisi, and Batumi offers a wide range of facilities focused on healthy living. Thanks to the county s rich history in performance art, Georgia s cultural life has remained substantial. Many primary theatres and concert halls have recently undergone renovation, while several new venues have been added to the supply. 3
Background Georgia is the most active economic center in the region. With a liberal tax code, corruption free government, and significant opportunities for foreign investment, it provides a highly supportive business environment. At the crossroads of Europe and Asia, Georgia borders Turkey, Armenia, Azerbaijan, and Russia. The country occupies an area of 69,700 square kilometers (sq km) and is home to a population of 3.7 million people. The country s land borders run a length of 1,839 kilometers (km), while the Black sea coastline is 315 km. During last two decades, Georgia has implemented large-scale reforms that have led to political and economic transformation. It has strengthened its democracy and furthered its relationship with the European Union (EU). Georgia has also made business development within the country a top priority through encouraging entrepreneurship, attracting private investments, and shifting tax incentives, thereby positioning itself as an attractive option to the international business world. With its unique cultural heritage and exuberant hospitality, Georgia s tourism industry continues to grow and thrive, further bolstering economic growth. Government Georgia is a parliamentary republic. Parliamentary elections are held every four years. Georgia s parliament is located in Kutaisi City and acts as the representative body for the country, exercising legislative power and developing domestic and foreign policy. As an executive council of government ministers, Georgia s cabinet is headed by Giorgi Kvirikashvili, who is a member of the majority Georgian Dream Party. Based on accountability, citizen participation, technology, and innovation as its guiding values, today s government continues to make European and Euro-Atlantic integration a primary strategic objective. Legal Framework The Georgian Constitution, adopted in 1995, lays out the structure of the national government and defines its authority and function. Georgia s court system has three branches: the Courts of First Instance (District or City Courts), the Appellate Courts, and the Supreme Court. The Courts of the First Instance have jurisdiction over all civil, criminal, and administrative cases. Decisions from the Courts of the First Instance may be appealed to the Appellate Courts and further appealed to the Supreme Court. As an alternative to litigation, Georgian laws allow arbitration both in local as well as international arbitration institutions. Georgia is a member of the International Centre for Settlement of Investment Disputes (ICSID). Public service hall in Georgia provides customers with state services including business registration and property registration through one-stop-shop principle that ensures efficient service delivery. Property Ownership & Non-Agricultural Lands In Georgia property rights are recognized and protected by the Law. An owner has the right to possess, use and dispose of his or her property. The rights of individual owners to possess, use and dispose of land are regulated by the land legislation. There is no restriction on non-agricultural land ownership in Georgia. According to the Heritage Foundation Index, Georgia has substantial improvement in property rights and is 11% above the world average. COUNTRY PROFILE KEY FACTS 3.7million POPULATION CAPITAL CITY OF GEORGIA OFFICIAL LANGUAGE CURRENCY GDP PER CAPITA, 2016 TBILISI GEORGIAN GEORGIAN LARI (GEL) 3864.6 USD UNEMPLOYMENT RATE, 2016 11.8% AVERAGE MONTHLY SALARY, 2016 LIFE EXPECTANCY Labor Market Overview 69.7K sq km AREA 375 USD 72.7 years Georgia s labor force comprises approximately 1,998,300 people. The unemployment rate is 11.8%, which is lower than the 14.8% average over the last decade. As of December 2016, 14.9% of the working population are employed by public sector, while 85.1% work in the nonpublic sector. Georgia s labor force is well-educated, multi-lingual and relatively low cost. 4
BUSINESS ENVIRONMENT International Rankings Georgia has improved its status as a free economy thanks to its fiscal policy, regulatory efficiency, and open market policies. According to the World Bank s Doing Business report 2018, Georgia ranks 9th for ease of doing business among 190 economies, 4th for ease of starting business, and 4th for ease of registering property. In 2017 Fitch Ratings has affirmed Georgia's Long-Term Foreign Currency Issuer Default Rating at 'BB-' with a Positive Outlook. Standard &Poor s and Moody s rated Georgia as BB- and Ba2 respectively. Georgia has been among the top most improved countries four times in the past 13 years. Registering a new business takes a maximum of two days and requires no minimum capital requirements. According to the Heritage Foundation Index of Economic Freedom 2018, Georgia s economy is categorized as Mostly Free, ranking 16th across 180 countries. Georgia remains the least corrupt country in the region. According to Transparency International, Georgia remains the top performer among the Eastern Partnership countries. Foreign investors in Georgia are guaranteed equal rights to those of Georgian citizens. After payment of taxes foreign investors are entitled to repatriate the earnings (income) gained from investments and other funds abroad. Tax Climate In order to attract investments and boost economic growth, an Estonian-type tax model was adopted in 2017 that exempts undistributed earnings from profit tax, and instead taxes distributed earnings only. Georgia has a liberal EASE OF DOING BUSINESS 2018 tax code that includes only six types of taxes: Profit Tax (15%), Personal Income Tax (20%), Value Added Tax (18%), Import Tax (0%, 5% or 12%), Excise Tax (on selected goods), and Property Tax (up to 1%). Georgia has Double Taxation Avoidance treaties with 52 countries. 9 THE WORLD CORRUPTION RANKING, 2017 130 Ukraine Azerbaijan 122 122 Moldova 107 Armenia 81 Turkey Bulgaria 71 68 Belarus 59 Romania 46 Georgia GLOBAL COMPETITIVENESS INDEX 2017-2018 Source: World Bank, Colliers International Georgia Lithuania Latvia Belarus Moldova Romania Armenia Bulgaria Azerbaijan Turkey Ukraine 76 Source: Transparency International, Colliers International Source: World Bank, Colliers International 5
2012 2013 2014 2015 2016 2017 ECONOMIC OUTLOOK Overview Georgian economy performed well in 2017; GDP growth picked up to 4.8%.This boost was largely driven by double-digit export growth that worked to improve the trade balance. Based on preliminary data, it is estimated that the annual export rate grew by 29% year-over-year (y-o-y). According to the National Bank of Georgia s preliminary data tourism revenues grew by 27% and money transfers also increased by 20%, narrowing the current account deficit. As Georgia s principal trade partner economies such as Russia, Iran, and the EU are recovering, we should expect to see an increase in Georgia s export capacity. Georgia has free trade regimes with countries of Commonwealth of Independent States and Turkey; Georgia has already signed free-trade agreements with the EU (DCFTA), the European Free Trade Association (EFTA) states, and China, and negotiations are currently underway for freetrade with India. According to the International Monetary Fund s forecast, Georgia will maintain the economic growth at around 4-5.5% in 2018-2021. The Georgian government is committed to fiscal sustainability and restraining current spending. Therefore, the fiscal deficit is expected to narrow through 2018-20. Exports Georgia s leading trade export partners in 2017 were Russia, Azerbaijan, Turkey, Armenia, and China. Exports to the EU countries increased by 13% y-o-y and represented 24% of the total exports; exports to the CIS countries that rose significantly by 60% y-o-y amounted to 43.3% of the total exports. Fast-growing Sectors The fastest growing sectors during the first nine months of 2017 were construction (up 12%), hotels and restaurants (up 11.9%), mining and quarrying (up 7.2%), financial intermediation (up 7%), and real estate operations (up 6.9%). REAL GDP GROWTH %, year 6.4 5.5 4.8 5.0 4.6 4.5 4.2 4.8 3.4 2.9 2.8 3.6 3.3 2.9 3.0 3.0 2.5 2.1 1.0-0.1 2012 2014 2016 2018 2020 Georgia Caucasus F'cast Source: Colliers International, Geostat, IMF NOMINAL GDP STRUCTURE, 2016 REMITTANCES, 2012-2017 1,600,000 30% 1,400,000 20% 1,200,000 1,000,000 10% 800,000 0% 600,000-10% 400,000 200,000-20% - -30% 6 Total Remittances, thousands USD (LHS) Growth, y-o-y (RHS) Source: National Bank of Georgia, Colliers International CURRENCY FLUCTUATIONS (LCU PER USD), Y-O-Y % CHANGE 90% 70% 50% 30% 10% -10% 2012 2013 2014 2015 2016 2017 Ukraine Azerbaijan Armenia -30% Russia Turkey Georgia Source: World Bank, Colliers International Source: Geostat, Colliers International
Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 ECONOMIC OUTLOOK Foreign Direct Investment (FDI) Based on preliminary data FDI inflows in 2017 increased by 16.2% y-o-y and amounted to USD 1.86 billion (bn). FDI growth in the construction, and hotel and restaurant sectors accelerated by 114% and 58%, respectively. FDI is expected to remain high into the 2020s due to two factors. The first will stem from Chinese road and rail investments that plan to link with new, long-distance trade routes (boosting traffic via Turkey, Azerbaijan, and Iran). The second increase is expected to come from foreign investors seeking to do business in a low-tax, lightly-regulated regional base. Approval by the European Bank for Reconstruction and Development (EBRD) to finance the Nenskra Hydropower Plant project (HPP) and the offer of USD 285mln in extended funds from the IMF also worked to strengthen external financing assurances. Inflation Although the headline inflation in 2017 was at 6%, above the central bank s target (3%), inflation is expected to slow down starting in early 2018. According to the IMF, Georgia s monetary policy rightly places emphasis on price stability. In addition, reforms continue to support price stability. Georgia s Larization program has triggered the decrease in the dollarization of deposits and loans. FDI INFLOWS BY YEARS (mln, USD) 1,023 1,021 1,818 1,653 1,603 1,862 2012 2013 2014 2015 2016 2017* *Preliminary data Source: Geostat, Colliers International INFLATION, % 9.0 8.0 7.0 6.0 Headline Inflation 16.3% 8.6% 10.1% Transport and Communication Construction 5.0 4.0 3.0 2.0 Core Inflation 15.8% FDI BY SECTORS 2017 4.8% 16.0% Financial Sector Real Estate Energy Hotels and Restaurants 1.0 28.3% Others 0.0-1.0 Source: Geostat, Colliers International Preliminary data Source: Geostat, Colliers International 7
Millions Millions TOURISM OVERVIEW Travel Volume to Georgia In 2017 the number of international inbound travelers grew by 18.8% y-o-y from 6.4 million to all-time high 7.6 million. The majority of visitors came from Armenia, Azerbaijan, Russia, Turkey and Iran. The number of international visitors from Saudi Arabia, Kuwait and Iran grew significantly in 2017 by 165%, 154% and 118% respectively. Visits from the EU countries also showed the positive trend. Visits from the U.K., Austria and Netherlands were up 40%, 34% and 31% respectively. July and August remained the most popular months for visiting Georgia. In 2017 46% of the inbound travelers were tourists followed by same-day visit (32%) and transit (22%) categories. Tourist arrivals increased by 27.9% over 2016 reaching 3.5 million visitors in 2017. According to the World Travel and Tourism Council s (WTTC) forecast tourist arrivals will amount to 8,056,000 by 2027. Georgia also ranks 16 th among 185 countries in WTTC ranking of long term-growth of tourism and travel s contribution to GDP. According to the Georgian tourism development strategy, Georgia aims to attract 11 million international visitors by 2025. Citizens of 98 countries are allowed to travel to Georgia without visa and stay up to one full year. In addition, foreigners who hold visa/residence permit 0f 50 countries enjoy visa-free travel to Georgia. Visitors who need to obtain visa can take advantage of e-visa portal for getting the short-term visa. Simplified travel and visa free regimes build on the strong growth of inbound tourism. Road travel remains the main mean of transport for international arrivals due to the large share of neighboring countries in the inbound travel. However, visits by airlines grew by 47% in 2017. INTERNATIONAL VISITORS 2012-2017 8.00 7.55 7.00 6.36 6.00 5.90 5.39 5.52 5.00 4.43 4.00 3.00 3.48 2.00 2.72 1.79 2.07 2.23 2.28 1.00 0.00 2012 2013 2014 2015 2016 2017 Tourist Arrivals International Arrivals Source: Georgian National Tourism Administration, Colliers International DYNAMICS OF TOURISM ARRIVALS FROM TOP 15 SOURCE MARKETS Country 2012 2013 2014 2015 2016 2017 Armenia 921,929 1,291,838 1,325,635 1,468,888 1,496,437 1,718,016 Azerbaijan 931,933 1,075,857 1,283,214 1,393,257 1,523,703 1,694,998 Russia 513,930 767,396 811,621 926,144 1,038,750 1,392,610 Turkey 1,533,236 1,597,438 1,442,695 1,391,721 1,256,561 1,246,745 Iran 89,697 85,598 47,929 25,273 147,937 322,938 Ukraine 76,610 126,797 143,521 141,734 174,858 193,002 Israel 30,851 39,922 42,385 59,487 92,215 125,319 India 6,833 6,195 4,679 12,114 36,410 59,732 Kazakhstan 15,115 21,148 28,394 36,777 48,849 56,765 Saudi Arabia 1,169 3,780 5,485 9,850 21,257 56,247 Poland 20,563 36,946 46,314 41,425 44,436 52,284 Germany 26,448 30,815 33,446 36,826 40,915 51,445 Belarus 7,972 12,915 19,148 28,959 37,110 47,984 USA 28,513 26,713 28,272 31,147 34,250 42,645 UK 14,805 16,672 18,586 19,233 19,198 26,852 Source: Georgian National Tourism Administration, Colliers International 22.4% 18.4% 22.7% 16.5% 4.3% SHARE OF MAIN SOURCE MARKETS, 2017 15.6% Armenia Azerbaijan Russia Turkey Iran Other INTERNATIONAL ARRIVALS BY TYPES OF VISIT 8 7 6 5 4 3 2 1 0 0.8 1.9 1.2 1.1 1.4 2.1 2.2 2.2 1.8 2.1 2.2 2.3 Source: Georgian National Tourism Administration, Colliers International 2012 2013 2014 2015 2016 2017 1.3 2.3 2.7 24h+ Same-day visit Transit 1.7 2.4 3.5 8
Billions TOURISM OVERVIEW Economic Impact of Tourism Tourism industry accounted for 7.1% of Georgia s economy in 2016. During the first 9 months of 2017 tourism value added grew by 13% y-o-y and amounted to 3.16 bn. Tourism value added reflects the economic activity generated by industries such as hotels, food and beverage (F&B), travel companies, airlines and other transportation services. Accommodation category that represents 19% of the total value added grew by 33% y- o-y through 9M of 2017. F&B industry was also up 10%. Tourism and Travel industry supported 102,650 jobs in 2016 that represents 15% of total jobs provided by business sector. Revenues from inbound tourism have been growing rapidly for the past five years. Based on preliminary data, revenues in 2017 rose by 27% y-0-y and amounted to USD 2.75 bn. The volume of foreign card operations by international travelers has also been growing steadily (+27% ) hitting 2.1 bn Gel in 2017. Spending volume should increase as Georgia continues to attract travelers with higher holiday budgets. It has been announced that the 18th World Federation of Tourist Guide Associations (WFTGA) international convention will be held in Tbilisi, Georgia from January 21, 2019 to January 27, 2019. The convention will bring together around 300-500 tourist guides from 70 countries. Hosting WFTGA will increase awareness about tourism in Georgia and will contribute to the development of tourism industry. TOURISM REVENUES, USD, BILLIONS Source: National Bank of Georgia, Colliers International TOURISM VALUE ADDED, BILLIONS, GEL 22% 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 7.3% 7.1% 7.0% 6.7% 6.5% 2.62 2.64 3.07 3.51 3.73 2.80 3.16 2012 2013 2014 2015 2016 9M 2016 9M 2017 7.4% 7.2% 7.0% 6.8% 6.6% 6.4% 6.2% 6.0% 28% STRUCTURE OF TOURISM OUTPUT 9M 2017 32% 19% Transport Food and Beverage Travel Companies Accomodation Tourism Output (RHS) Share in total GDP (LHS) Source: Geostat, Colliers International Source: Geostat, Colliers International 9
TOURISM OVERVIEW Travel Purposes Number of guests in hotels has a positive trend during the past four years. Out of 2.54 mln hotel guests in 2016 1.7 mln were international travelers. 75% of them were leisure travelers, 21% visited Georgia for business purposes and only 2% for the health tourism. Average length of stay of tourists in Georgia is 12 days. Ukrainian and Russian tourists tend to stay for the longest periods on average 15 and 12 days, respectively. As number of guests in hotels is growing, revenues in hotel industry have increased to 519.8 mln Gel in 2016. FDI in hotels and restaurants during 2012-2016 amounted to 320 mln USD. Types of Tourism Winter tourism is gaining momentum. Government is actively involved in the implementation of various projects. Mestia-Hatsvali cableway construction was completed in 2017. Goderdzi ski resort in Adjara and Tetnuldi ski resort in Mestia were recently opened. Two cableways were added to Goderdzi resort. Wine tourism, adventure tourism and spa and wellness tourism are in their early development although they have a great potential. Government is planning to intensify work on developing medical tourism as Georgia can become quite competitive in the region offering lower prices to the customers. Benchmarking In 2016, tourist arrivals in Central and Eastern Europe grew by 4%. Many destinations enjoyed strong results, including Georgia (+19%), Bulgaria (+16%), Moldova (+12%), Romania and Lithuania (both +11%). Estonia recorded 5% growth. LENGTH OF STAY OF TOURIST ARRIVALS 20% 4.00 18% 19% 3.63 3.50 16% 16% 3.00 14% 12% 2.50 2.17 12% 10% 2.00 11% 1.73 8% 1.54 1.50 6% 1.19 1.00 4% 0.50 2% 0.25 11% 5% 0% 0.00 Georgia Bulgaria Moldova Lithuania Romania Estonia International tourist arrivals (24+ hours) y-o-y growth rate 2016/2015 International tourism receipts (USD/billion) 2016 Source: World Tourism Organization (WTO), GNTA, Colliers International HOTEL INDUSTRY REVENUES LENGTH OF STAY OF TOURIST ARRIVALS (AVERAGE DAYS) 700 600 500 400 300 200 1.86 1.26 1.39 1.85 2.54 3.00 2.50 2.00 1.50 1.00 75% HOTEL GUESTS BY PURPOSE OF VISIT 2016 8% 21% 2% 13.0 13.2 12.6 12.9 12.4 100 0 0.50 249.44 281.66 342.12 459.68 579.79-2012 2013 2014 2015 2016 Hotel Industry Revenues, Gel, mln (LHS) Number of Guests in Hotels, mln (RHS) Source: Geostat, Colliers International Leisure and recreation Business Source: Geostat, Colliers International 2013 2014 2015 2016 2017 Statistics are based on the data for tourists who stayed in Georgia more than 24 hours up to 1 year. Source: Ministry of Internal Affairs 10
TOURISM OVERVIEW Domestic Tourism In 2016, Georgian residents took a total of 12.96mln domestic trips. 46% of those trips included at least one overnight stay, with the average trip length being 2.2 nights. Residents of Tbilisi accounted for the largest share (28.3%) of the trips, followed by the residents of Imereti and Racha (21.3%) and Shida Kartli (10%) regions. Majority of the domestic trips made by the Georgian residents were with the intention to visit friends and relatives. The second and third most frequent purposes were shopping and medical care, respectively. Adjara was the third most visited region in 2016; since it is located next to the Black Sea, it was the most popular holiday, leisure, and recreation destination. Domestic tourism is a significant part of Georgia s economic activity. In 2016, domestic travel spending accounted for 71.8% of direct Travel & Tourism GDP. Total expenditure by domestic visitors amounted to over 1.6bn GEL. Majority, 463.8mln GEL, was spent on food and drinks, followed by shopping (433.4mln GEL) and transportation (273mln GEL). Since 85% of domestic visitors preferred to stay at a friend s, relative s, or their own home, spending on accommodation accounted for only 4.6% of the total expenditure. 869,631 local travelers stayed in hotels in 2016. 58% of them for leisure and 28% for business purposes. Hotels in Tbilisi received 232,390 local guests, while hotels in Batumi and Kutaisi hosted 170,790 and 42,911 Georgian guests, respectively. 26.7% 16.8% SHARE OF TOTAL EXPENDITURE 2016 4.6% 1.7% 21.5% 12.3% PURPOSE OF VISIT 2016 11.1% 9.0% 6.8% Air Travel Airlines carried 4.07 million passengers in 2017, up by 43% from 2016 according to the Georgian Civil Aviation Agency. Tbilisi International Airport once again received the largest number of passengers, depicting a 40% growth compared to last year. At the same time, the number of passengers in Kutaisi Airport increased significantly by 49%. Batumi Airport is also up from 312,357 to 495,668 passengers. The number of incoming international travelers in Batumi airport rose from 129,718 in 2016 to 208,845 in 2017, which represents a 61% increase. The number of international arrivals increased by 47.5% and 19.6% in Tbilisi and Kutaisi airports, respectively. There are 33 airlines operating in Georgian market offering passengers 43 direct routes to 28 countries. The major airlines offering flights to Tbilisi airport includes Turkish Airlines, Lufthansa, Flydubai, and Qatar Airways The list of airlines operating in Batumi airport include Turkish Airlines, Georgian Airways, Belavia, and Air Arabia. Ones operating in Kutaisi airport include Wizz Air Hungary and Ukraine International. Wizz Air is the leading low-cost carrier in Georgia. It currently offers routes to 11 countries and more connections to major European cities are on the way in 2018. Flights to Barcelona, Paris, Rome and Prague will be launched in May 2018. In addition, Flydubai added Kutaisi as its new seasonal destination. Flydubai will offer flights to Kutaisi airport starting from June 2018. The airline will also increase the number of flights to Batumi airport from 4 to 7 per week. Pegasus also increased the frequency of its flights to and from Tbilisi airport from 7 to 9 per week. Affordable travel opportunities from European cities will boost inbound tourism even further. NUMBER OF PASSENGERS RECEIVED IN AIRPORTS 2016-2017 3,164,139 52.5% 3.6% 4.7% 2,252,535 28.6% Food and Drinks Transportation Cultural and Entertainment Service Shopping Accommodation Other Visiting friends/relatives Shopping Health and Medical Care Holiday, Leisure, Recreation Visit to Second Home Business or Professional Other 495,668 312,357 405,173 271,363 Tbilisi Batumi Kutaisi Photo: Kutaisi International Airport 2016 2017 Source: Georgian National Tourism Administration, Colliers International Source: Georgian Civil Aviation Agency, Colliers International 11
TOURISM OVERVIEW DIRECT FLIGHTS FORM GEORGIA MAIN FLIGHT ROUTES Origin Destination Flight Duration (hours) Tbilisi Baku 1.1 Tbilisi Tehran 1.7 Tbilisi Istanbul 2.0 Tbilisi Tel Aviv 2.1 Tbilisi Kiev 2.2 Tbilisi Moscow 2.4 Tbilisi Athens 2.6 Tbilisi Minsk 2.6 Kutaisi Vilnius 2.6 Kutaisi Budapest 2.7 Tbilisi Dubai 2.9 Tbilisi Warsaw 3.0 Tbilisi Riga 3.1 Tbilisi Saint Petersburg 3.1 Tbilisi Vienna 3.2 Kutaisi Berlin 3.3 Tbilisi Prague 3.4 Tbilisi Almaty 3.5 Tbilisi Munich 3.6 Flight Duration 0 2 Hours 2 3 Hours 3 4 Hours 4+ Hours Source: Georgian National Tourism Administration, Colliers International Kutaisi Milan 3.6 Tbilisi Amsterdam 4.2 Tbilisi Urumqi 4.5 Tbilisi London 4.6 Batumi Istanbul 1.7 Batumi Kiev 2.0 Source: www.flighttime-calculator.com
TOURISM OVERVIEW MICE Facilities MICE (Meetings, incentives, conferencing, exhibitions) tourism is an important sector for hospitality industry and is an opportunity for Georgia to transform itself to a year-round destination. Convention and Exhibition Bureau of Georgia offers customers, national and overseas, a place where they can obtain honest and impartial advice for prospective MICE events in the country. Substantial supply of high-end internationally-branded hotels, safe environment, visa free travel with up to 100 countries, direct flights to 28 countries, cultural and geographical diversity and a vast number of attractions create favorable environment for attracting international business visitors. In addition, the economic initiatives and incentives that the Georgian government has introduced to attract more international clients to the country are significant in the development of the MICE market. The liberal economy, attractive business environment, free industrial zones, improved quality of public services, lack of corruption and recent investments in tourism infrastructure make Georgia a good place to invest. Supply Over the past few years the supply of conference facilities has been growing both in Tbilisi and Batumi. The capital holds 48% of Georgia s total supply of conference and meeting facilities, with an overall capacity to host about 7,500 delegates. Batumi s conference facilities can accommodate 5,600 guests. The rest of the MICE facilities are located in other regions of the country with the capacity of 2,600 guests. The supply growth can mostly be attributed to an increasing number of internationally-branded hotels in Tbilisi and Batumi. The opening of the Biltmore Hotel Tbilisi in 2016 has increased the city s stock by two conference halls able to host about 850 delegates. During the next four years sixteen new internationally-branded hotels are expected to open in Tbilisi, with a conference/meeting facilities able to accommodate 10,830 guests. Demand On average, 5-7% of hotel guests in Georgia are MICE tourists. The vast majority of events are held in Tbilisi. The largest and one of the most significant event in 2017 was Tbilisi Belt & Road Forum, hosting about 2,000 delegates from more than 60 countries. In 2017 Tbilisi received roughly 500,000 delegates who participated in various conferences and meeting. Batumi is an attractive destination for MICE as well. Around 100,000 delegates attended conferences and meetings in 2017. Batumi hosted the 17th Congress of the Conference of European Constitutional Courts, attended by delegates from more than 40 countries. Georgia has the high potential to become a top MICE destination for CIS, middle east and Central Asian countries. 35% 17% CONFERENCE/MEETING FACILITIES CAPACITY DISTRIBUTION Tbilisi Batumi Regions 48% Source: Colliers International 13
Georgia is well recognized globally as a key gaming spot of the region. Tbilisi hosts the majority of the casinos, while Batumi is the second largest gambling city. Revenues for gaming venues comprise a large share of the country s economy. The gaming venues turnover grew rapidly during the last decade, reaching GEL 4,037 million (mln) at the end of 2016, while the first three quartiles turnover in 2017 totaled GEL 3757.3 mln, reflecting increases of 36% and 78% when compared to the same period in 2016 and 2015, respectively. Casinos play important role in country s tourism development as the absence of restrictions in Georgian gaming venues attracts number of visitors from neighbor countries. Georgian Casinos offer a wide range of games like Poker, Black Jack and Roulette, as well as slot-machines. Casino visitors can enjoy a number of gaming facilities. Tbilisi s most recognized casinos include Casino Iveria, Shangri La Casino, Casino Adjara and others. Casino Ambassadori was opened in the city Centre in 2017. Jewel Casino Tbilisi and Casino Aviator will be opened in The Biltmore hotel and Stamba hotel, respectively, in the beginning of 2018. The city of Batumi is another popular gambling destination with a fast growing number of gaming venues. Large-scale casinos, such as Casino Adjarabet, Casino Iveria Batumi and Casino International Batumi operate in the city. Another high-class casinos to open in Batumi include Le Meridien Casino, Euphoria Hotel casino, Mega Palace Hotel casino etc. Famous American casino brand Las Vegas also enters Georgian market. It will be placed in 40,000 sq m recreation complex in Kobuleti resort, including 5-star hotel and various indoor and outdoor entertainment facilities. Started in August 2017, the project is planned to finish by 2021. CASINOS TURNOVER OF GAMING VENUES IN GEORGIA (MLN/GEL) 4,036.5 3,757.3 2,763.3 2,246.1 2,032.8 996.0 1,213.4 112.7 366.3 2010 2011 2012 2013 2014 2015 2016 M9 2016 M9 2017 Source: National Statistics Office of Georgia, Colliers International MAJOR CASINOS IN GEORGIA Tbilisi Batumi Rest of Georgia MAJOR PLANNED CASINOS IN GEORGIA Tbilisi Batumi Rest of Georgia Shangri La Iveria (Radisson Blu Batumi) Rooms Hotel Casino (Kazbegi) Casino Jewel Le Meridien Casino Las Vegas Casino (Kobuleti) Casino Adjara 14 Casino Iveria Casino Ambassadori Sheraton Batumi Casino Intourist Palace Casino Golden Palace Batumi Casino Casino International Batumi Crowne Plaza Casino Ambassadori Hotel (Kachreti) Casino Source: Developers, Operators/Property Managers, Colliers International Casino Aviator Melco Crown Entertainment Casino Sheraton Metekhi Palace Casino Euphoria Hotel Casino Metro Atlas Georgia Mega Palace Hotel Casino New Wave Tower Source: Developers, Operators/Property Managers, Colliers International Radisson Blu Iveria
GAMING REGULATIONS IN GEORGIA 1. A casino operator has to obtain a permit from the State Authorities of Georgia. The permit is issued by the Revenue Service of Georgia 2. The validity of the permit is five years. 3. In order to obtain a gaming permit, the person shall meet the special requirements defined by the law and special acts of the Government. The requirements are the following: a) Casino Regulations that shall include: the list of tables in the casino, indicating the manufacturers number, title, date of production, manufacturing country; the minimum and maximum bets; the manual for operation; Gaming Rules; Rules of Conduct; the place and the time for issuance of prizes; the time for consideration of the claim; b) Types of coins; c) The type of games that are not indicated in the Casino Regulations are prohibited from being offered. ANNUAL CASINO FEE IN GEORGIA Geographic area Permit fee Tbilisi GEL 5,000,000 Batumi, Surrounding area of the Lake Bazaleti, Borjomi, Kobuleti, Vill. Kachreti GEL 250,000 Akhaltsikhe GEL 100,000 Gudauri, Kazbegi, Bakuriani, Sighnaghi, Tskaltubo Batumi, Kobuleti, Khelvachauri, Anaklia, Ganmukhuri GEL 0 (no special conditions demanded) GEL 0 (for casinos operating in hotels with more than 80 rooms) The rest of the country GEL 5,000,000 Casino Iveria 15 Source: Revenue Service of Georgia, Colliers International
FOOD & BEVERAGE Leaned on local hospitality traditions that attract a number of visitors, Georgia s gastronomic culture is famous worldwide. Unique Georgian wine and delicious traditional dishes are served in local café-bars and restaurants. Tbilisi is the largest supplier of gastronomy venues, creating several food and beverage (F&B) clusters throughout the city. Chardin & Kote Apkhazi With a total leasable area of more than 10,000 sq m, the largest and most popular F&B cluster in Tbilisi is located along the prominent Chardin, Kote Apkhazi, and Erekle avenues and adjacent smaller streets. Almost fully occupied by a wide variety of F&B venues, this cluster offers visitors a host of café-bars, restaurants, coffee shops, pubs, steak houses, and ice-cream shops. Wine bars/cellars (like the Schuchmann Wine Bar) are among the busiest beverage venues. Popular restaurants in the cluster include 1001 Nights, Chashnagiri, Tifliso, and Organique. Chardin St. As a primary tourist destination, the Chardin & Kote Apkhazi F&B cluster is especially active during the summer months due to an influx in foreign visitors. Many venues on Chardin Street or nearby are frequented by VIP guests and tourists; local cafes and restaurants, eager for positive feedback on international travel websites such as TripAdvisor, are thus motivated to keep the level of their products and services quite high. Akhvlediani & Kiacheli One of Tbilisi s oldest and most popular F&B clusters is located alongside the two parallel streets of Akhvlediani (Perovskaya) and Kiacheli, spilling over in to several nearby streets including Miminoshvili and Vashlovani. Within the sprawling cluster, there are up to 30 venues occupying a total area of around 1,500 sq m. Most of the venues provide traditional Georgian and European cuisine or a mix of the two. There are a number of Asian restaurants and cafes as well, serving traditional Japanese, Chinese, Indian, and Thai food, while Hungarian and Irish café-bars and pubs are also represented. Relatively large venues in the cluster include the Hungarian bar Duna, the Maharaja Indian restaurant, and the ALTHAUS tea house. Several large restaurants are currently being refurbished. Famous pubs including Wheels (Georgia s first-ever pub), Nali, and Buffalo Bill s are among the most-visited venues. A majority of the cluster s venues offer live music several days a week, while others provide karaoke and Asian-themed dance evenings. Kiacheli St. Seasonal factors affecting the F&B venues are usually connected with holiday periods, though summer and winter periods impact each venue differently based on its category. 16
FOOD & BEVERAGE Tabidze St. Tabidze Street is one of Tbilisi s newly-developed clusters. Currently, F&B venues occupy around 1,500 m2 of the cluster s leasable space. Unlike other clusters, the share of traditional Georgian cuisine is relatively modest as the majority of its restaurants offer European or international fare. Restaurants lease the largest portion of space in the cluster, though there are also several wine and coffee cafes on Tabidze street and nearby. Additionally, Tabidze s wine cafes sell various souvenirs and artwork made by Georgian Artists, while several restaurants offer live music and Karaoke. Terasa, Merilini, and 11/11 are among the cluster s most visited venues, attracting 20 to 30 tables filled with locals and tourists each day. The number of guests remains relatively stable throughout the year. Tabidze St. Chovelidze St. Chovelidze Street is a relatively new Tbilisian cluster currently being developed. Following the opening of the Rooms Hotel Tbilisi in 2014, several other venues opened for business along Chovelidze Street. Besides Rooms Hotels Kitchen Restaurant that offers European and American dishes, three venues of up to 1,000 sq m are located nearby, providing 200 seats to dining guests. With several floors, open and closed halls, and a garden where European dishes are served, Club-restaurant Lolita is the largest of the three. The club is popular with local and international visitors, drawing guests to dine and enjoy live music performed by popular local and foreign bands and DJs. Other large venues in the cluster include the Chinese Restaurant and the Frenchthemed Keti s Bistro. Chovelidze St. Aghmashenebeli & Marjanishvili Renovated Aghmashenebeli Street is now home to one of the capital s primary F&B clusters. In addition to the popular cafes and restaurants serving traditional Georgian and European cuisine, the cluster is notable for its numerous international options including Asian, Turkish, Arabic, Iranian, and Indian restaurants, clubs and cafeterias. Several worldwide brands, such as McDonalds, Subway, and Dunkin Donuts, are also represented in the Marjanishvili & Aghmashenebeli Cluster, though small café-bars and canteen-like venues consume the majority of available space. The most well-known traditional Georgian restaurants on Aghmashenebeli Street include Machakhela and Barbarestan. As the Marjanishvili & Aghmashenebeli cluster is a popular touristic destination, guest numbers usually increase during the summer months. This increase impacts Asian restaurants more significantly, while traditional Georgian F&B guest numbers remain comparatively stable during the year. Aghmashenebeli St. 17
FOOD & BEVERAGE New Tiflis Renovated as part of the larger New Tiflis project, Aghmashenebeli Avenue is home to one of the city s most popular F&B clusters. New Tiflis comprises the territory from N44 Aghmashenebeli Avenue to Saarbrucken Square, creating a 500-metre pedestrian-only area with a rehabilitated infrastructure that offers visitors a wide range of dining options. Up to fifty food and wine venues are represented in the cluster, occupying approximately 5,000 m2. Most of the cafés and restaurants serve both local and international dishes, though because of the cluster s popularity with tourists, traditional Georgian-only restaurants are in the highest demand. Some of the most popular venues of the cluster include Lagidze Water, Amber Bar, White Bar, and Travel Bar. Several Arab and Indian restaurants are also located in the cluster. New Tiflis s food and beverage venues provide guests with up to 1,200 seats, though during the summer season numbers can reach as high as 4,000 guests. Aghmashenebeli St. A number of venues in the cluster provide live music or karaoke facilities. Wine venues collaborate with travel agencies, informing city visitors about special discounts and informative tours and tastings available in their cellars. The cluster s F&B businesses can be described as highly seasonal, given the dramatic fluctuation in visitors depending on the time of the year. Fabrika Located in Tbilisi s historical area and crafted from a renovated Soviet-era factory, Fabrika is a hip, multifunctional urban space offering locals and tourists a number of entertainment and dining possibilities. The blend of authentic Soviet elements and modern facilities creates a unique and cozy atmosphere, making Fabrika one of the city s most popular creative hubs. As a region s biggest hostel, Fabrika aims to bring together active local and foreign individuals, providing facilities to work, relax, and socialize. In 2017, more than 320 events drew hundreds of visitors to Fabrika where they attended workshops, meetings, flea markets, and more. Fabrika s tenants include art galleries and salons, shops, and F&B venues. Fabrika s F&B options are gathered in Fabrika Yard which is open to the public, offering guests several Georgian-European and Asian food venues such as Dive Bar, Moulin Electrique, Tone, and Shio Raman. Fabrika Hostel The F&B venues seat more than 200 guests in total, though Fabrika s bars are capable of hosting significantly more people, using Fabrika Yard as an additional space. Fridays and weekends are the busiest days during the week, though Fabrika reaches its peak visitor numbers during events. 18
NIGHTCLUBS Despite the fact that nightlife in Georgia has a relatively short history, Tbilisi has already earned a reputation as the region s premiere clubbing destination. Tbilisi and Batumi offer the majority of clubs, while additional facilities are relatively modest in other Georgian cities. MAJOR NIGHTCLUBS IN TBILISI With its distinguished line-ups and unique atmosphere, Bassiani is the largest and unquestionably mostrecognized techno club in Georgia. Often listed among the best nightclubs in Europe, this massive, 1,200-personcapacity venue is located in the basement of the Boris Paitchadze Dinamo Arena. The club s powerful sound system and lineup of world-famous and locally-loved DJs attract both locals and tourists to its mesmerizing underground scene. Popular artists hosted by Bassiani include Ben Klock, Function, Shackleton, Marcell Dettmann, the Zenker Brothers, and others. Opened in a Soviet-era restaurant building in 2012, Mtkvarze quickly became one of the most popular venues for local and foreign clubbers. Located on the east bank of Mtkvari River with a dance floor suspended above the river, Mtkvarze hosts popular Georgian and world-famous DJs in two different rooms over two levels. Electronic music is played in the larger space, while visitors enjoy a diverse range of music in the smaller room. Artists hosted by Mtkvarze include Sammy Dee, Anna Haleta, and Omar McCutcheon. Khidi is an underground club newly-opened in 2016 that quickly climbed to the top of nightclub-goers favorite venues. Spanning a 3-floor area located under Bagrationi Bridge on the right bank of Mtkvari River, the venue offers club-goers a high quality sound and lighting system. Khidi hosts a number of popular international artists while offering plenty of opportunity for newcomer musicians as well. Popular with techno events, the Café Gallery is located in the centre of Tbilisi. Situated on Rustaveli Avenue, Café Galley serves as a café during the day, transforming in to a club at night. In spite of its small, 200-person capacity, Café Gallery is a favorite haunt with locals. Other popular clubbing venues in Tbilisi include the open-air Vitamin Cubes near Turtle Lake, Night office on Mtkvari River s right bank, and the art-café Home on Betlemi Street. With distinguished glass architecture, the Gate club opened in Amusement Park Batumi in 2016, offering clubbers a high-quality sound system and several entertainment zones. Similar to the majority of local entertainment spots, the club s activity is highly seasonal, though its open and closed areas can host clubbers in every season. Sector 26 is an open-air seaside club on Batumi Boulevard. With its own swimming pool, the music plays all day, hosting famous DJs such as Martin Eyerer, Michael Gray, and Nicolas Jaar. Opened in 2015, Boom Boom Beach is another nightclub on Batumi Boulevard that offers guests a swimming pool and a dance floor with a 1,200-guest capacity. DJs who have performed at Boom Boom Beach include Gardens of God, Woo York, and The Dark Wood. Several other popular nightclubs operate in Batumi, though most are seasonal summertime spots, supported primarily by foreign tourists. Kutaisi s clubbing scene remains largely undeveloped, though the Reflector Club on Queen Tamar Avenue opened in 2017. The club s cozy dance floor and quality music quickly attracted a following of local, techno-music lovers. Hosting up to 100 people, the club offers performances by local and Tbilisian artists. Khidi Mtkvarze Café Gallery Bassiani 19
STADIUMS & ARENAS Georgia s modern sport facility supply has grown in recent years. Projects implemented by the Ministry of Culture and Sport include the construction and rehabilitation of sport complexes and arenas across the country. Today, there are roughly 550 sporting venues of various sizes in Georgia. The Georgian Government continues to invest heavily in construction of new sport complexes across the country. Each year, Georgia hosts many sporting tournaments. Up to fifty local and international events were held in the country in 2016-17, including the Judo Grand Prix, the World Women's Handball Championship, the European Athletics Youth Championship, and the European Championships in sumo, rafting, and fencing. Sector turnover of sport complexes and stadiums amounted to GEL 34.9 mln at the end of the third quarter in 2017, revealing a 57% increase from the same period in 2016. Boris Paitchadze Dinamo Arena (55,000 seats) and the Mikheil Meskhi Stadium (27,000 seats) are Georgia s two largest stadiums. The complexes have recently undergone renovations to bring them up to international standards. The Dinamo Arena hosted the UEFA Super Cup in 2015. Tbilisi Sports Palace and New Sports Palace are located in the city s central Saburtalo district. The Tbilisi Sports Palace can seat 10,000 spectators and hosts a number of sporting and cultural events throughout the year. Constructed for the European Youth Olympic Festival in 2015, New Sports Palace is a 4,515-seat complex used for both sports tournaments and training. Several sport facilities have recently opened in Georgia. Spanning four hectares, a new 1,000-seat, four-stadium multifunctional sport complex was opened in the Gldani district in 2017. A new GEL 7 mln rugby complex was constructed in Batumi. With natural and artificial grass and sand courts, the facility corresponds to international rugby standards. Opened in 2013, the first world-class golf club in Georgia is located on the Ambassadori Kachreti Hotel grounds. The second and the largest golf complex in Georgia will be constructed in Teleti village, a 15-minute drive from Tbilisi s central districts. The complex will include 18-hole golf course, a football stadium, swimming pool, running and cycling tracks. In 2017, the construction of three two-hall, multifunction sport palaces began in Batumi, Telavi, and Gori. The Batumi complex will be able to host 3,000 people, while the Telavi and Gori venues will each offer 2,000 seats. Expected to be completed in 2018, the palaces will serve various sporting activities, including local tournaments. The construction of a 20,000-spectator UEFA standard football stadium have started in Batumi in 2017. This GEL 99 mln project is expected to finish in next 3 years. The stadium will have a unique design and parking space for 1,200 cars. 10 more new sport complexes are currently under construction in Tbilisi (7 stadiums) and Kutaisi (3 stadiums). The complexes will be finished in 2018. Ten additional sport complexes, including seven stadium projects in Tbilisi and three stadiums in Kutaisi, are all under construction and expected to reach completion in 2018. TURNOVER OF SPORT COMPLEX, STADIUMS AND SPORT CLUBS IN GEORGIA (MLN/GEL) 14.4 24.4 45.1 24.8 26.8 39.3 30.1 22.3 34.9 2010 2011 2012 2013 2014 2015 2016 M9 2016 M9 2017 Source: National Statistics Office of Georgia, Colliers International Proposed: Batumi Football Stadium 20
STADIUMS & ARENAS MAJOR STADIUMS IN GEORGIA Name Location Capacity Sport Boris Paitchadze Tbilisi Dinamo Arena Mikheil Meskhi Stadium Tbilisi 55,000 Football, Rugby Tbilisi 27,000 Football, Rugby Tbilisi Sports Palace Tbilisi 9,000 Basketball, Judo Shevardeni Tbilisi 3,000 Football Kutaisi Central Stadium Kutaisi 14,000 Football, Rugby Kutaisi Rugby Stadium Kutaisi 5,000 Rugby Source Ministry of Culture and Sport of Georgia, Colliers International MAJOR PLANNED STADIUMS AND SPORT COMPLEXES IN GEORGIA Stadiums and Sports Complexes Location Capacity Football Stadium Batumi 20,000 Sports Palace Batumi 3,000 Sports Palace Telavi 2,000 Sports Palace Gori 2,000 10 football stadiums Various cities of Georgia 1,000 Black Sea Arena Source Ministry of Culture and Sport of Georgia, Colliers International 21
FITNESS & SWIMMING The country s large number of fitness centres and swimming pools reveal how popular the idea of healthy living is in Georgia. Most venues offer a diverse range of physical health-related services, from spa treatments to dance classes. Tbilisi is Georgia s largest supplier of fitness and swimming facilities, followed by Batumi and Kutaisi. There are around a hundred fitness clubs in Tbilisi. While most of these are local, single-branch gyms, several international brands also successfully operate in the city. Tbilisi s primary clubs usually occupy spacious areas in the city s central districts and can host several hundred people concurrently. The primary fitness clubs in Georgia include Aspria, Snap Fitness, and World Class. With four sports gyms in Tbilisi (two in the central Vake and Saburtalo districts) and one in Batumi, Aspria offers its members unlimited, round-the-clock access to any of its fitness centres. Snap Fitness is an international fitness chain that opened its first Tbilisi location in 2015. With two branches in the Vake and Saburtalo districts, Snap Fitness has quickly gained popularity. In 2017, a GEL 3 mln investment was made to open the first World Class fitness gym, an international fitness chain. Located on the 4 th floor of the Tbilisi concert hall, the gym occupies 1,250 sq m of space and features panoramic views of Tbilisi s city centre. World Class has announced plans to open three additional centres in Georgia over the next several years. Other prominent fitness venues in Tbilisi include Urban Garden, Oktopus Fitness Club, Prolife Fitness, and Medi Fitness. Like the major fitness venues, large-sized open and closed swimming pools in Georgia offer a range of services and are visited daily by hundreds of people. Popular swimming facilities in Tbilisi include the Arena Complex, Neptune, Olympic Pool, Club 71, and the Anne Semonin Spa. Sport complexes Arena 1 and Arena 2 in the Vake district offer a wide range of well-appointed swimming and fitness facilities, and excellent infrastructure to accommodate additional water-related activities. Located on the top two floors of the Radisson Blu Iveria Hotel, the 1,600 sq m Anne Semonin Spa offers hotel and outside guests a wide range of options including open and closed pools with sweeping views of the city, a relaxation area, thermal suites, treatment rooms, and a solarium. Vake Swimming Pool and Fitness club on the city centre is also a popular place for people to relax and stay active. Club 71 in the Saburtalo district is a 3,000 sq m wellness centre with an array of state-of-the-art facilities. There are several world-class, international fitness and swimming facilities in Batumi, typically found in the city s international hotels including the Sheraton Hotel, Wyndham, Hilton, Euphoria, and others. At 900 sq m, the Aspria club, located in the Batumi Mall shopping centre, is the city s largest fitness facility. Batumi Plaza shopping centre on Chavchavadze Avenue also offers a wide range of fitness and swimming possibilities. Kutaisi s fitness and swimming facilities are relatively limited, though there are several venues available to accommodate local demand. Laguna Kutaisi and the Kutaisi Central Swimming Pool are the two major pools with fitness gyms. Other popular venues operating in the city include Galileo fitness, Kratos fitness, and Jumping fitness, among others. World Class Fitness Club 22
THEATRES & CONCERT HALLS The turnover of theatres and concert halls in Georgia reached GEL 28.6 mln at the end of the 3 rd quarter in 2017, reflecting a 19% decrease from the same period in 2016. Each year, Georgia s 49 professional theatres (24 of them in Tbilisi) host up to 5,000 performances in close to 16,000 seats. The number of theatre visitors increased by 9% from 555,000 in 2015 to 602,000 in 2016. The Rustaveli Theatre and Marjanishvili State Drama Theatre are Tbilisi s two most significant theatre venues. With a history dating back to the 19 th century, Rustaveli Theatre is one of the oldest in the country, and is the largest, offering guests 1,269 seats within three halls. With a fully-renovated art nouveau façade and 674-seat capacity, the Marjanishvili State Drama Theatre is Tbilisi s second most prominent theatre, hosting many premieres, repertoire spectacles, and popular tours each year. Other notable theatres include Tumanishvili Film Actors Theatre, Rezo Gabriadze Marionette Theatre, and the Free Theater. Located in the city centre, Tbilisi Opera and Ballet House is one of the city s main landmarks. The opera house celebrated its grand reopening in January 2016 after 5-years of renovations. Guests can enjoy up to 50 opera and ballet performances each year during a season that lasts from summer to early winter. The Tbilisi Concert Hall offers guests 2,251 seats and a richly varied schedule of singing and dancing performances, festivals, ensembles, and shows by internationally-acclaimed stars. The cities of Batumi and Kutaisi are also famous for their theatrical traditions. Drama and puppet theatres are both quite popular with local population. Located in the coastal city of Shekvetili, the 10,000-seat Black Sea Arena is Georgia s largest concert hall. Opened in 2016, the arena s state-of-the-art facilities provide guests with a world-class experience and the opportunity to enjoy popular shows with international stars such as Aerosmith, Christina Aguilera, the Gypsy Kings, and others. TURNOVER OF THEATRES, CONCERT HALLS AND OTHER SIMILAR VENUES (MLN GEL) 13.4 27.5 24.7 22.9 28.2 38.1 50.0 35.5 28.6 2010 2011 2012 2013 2014 2015 2016 M9 2016 M9 2017 Source: National Statistics Office of Georgia, Colliers International MAJOR THEATRES AND CONCERT HALLS IN GEORGIA Name Location Number of stages Capacity Rustaveli Theatre Tbilisi 3 1,230 Marjanishvili Theatre Tbilisi 4 780 Tbilisi Concert Hall Tbilisi 1 2,251 7 2 2 NUMBER OF PROFESSIONAL THEATRES IN GEORGIA BY TYPE 38 Opera and ballet Children and youth Puppet Drama, musical comedy and miniatures NUMBER OF THEATRE VISITORS IN GEORGIA (THOUSAND PERSON) 469 360 404 354 434 487 555 602 Art and Music Centre Batumi 1 1,100 Source: Developers, Operators/Property Managers, Colliers International Source: National Statistics Office of Georgia, Colliers International 2009 2010 2011 2012 2013 2014 2015 2016 Source: National Statistics Office of Georgia 23
CONCLUSIONS & OUTLOOK The last year has been quite successful in terms of major value-adder sectors economic performance in Georgia. Record number international visitors seen in the country during 2017 has encouraged the local providers of entertainment-related facilities to increase their supply and service quality. Similar to the past years, Tbilisi is a top performer in both diversity of entertainment possibilities and the number of entertainment venues supplied. The capital is followed by Batumi that develops fast during the recent period. Other Georgian cities, however, are characterized by relatively modest supply of entertainment possibilities. While the unequal distribution of entertainment facilities in the country s various regions can easily be explained by the increasing demand seen in the major Georgian cities, it is crucially important for other regions to make the most of their potential. As we have seen by the case of two famous Georgian cities of Anaklia and Sighnaghi, investing in entertainment facilities can be the feasible way of the region s economic and social development. To reduce the supply imbalance causing the accelerated pace of urbanization, the Georgian Government is investing heavily in out-of-capital entertainment facilities, implementing simultaneously relevant regulations to encourage private investments. As for today, the sport and gambling sectors can serve as a successful examples of these incentives realization. One of the major achievement of Georgian entertainment market during the past years is the fact that it managed to position itself as a destination country for several entertainment sectors. The Gambling business with its booming economic performance continues to strive further, while the diverse sport and cultural events held in the country attracts a number of international guests, raising the recognition of local entertainment facilities. However, in order to assist further development of local entertainment market it is vital to improve service available in the country and also exploit the entertainment potential of various Georgian regions. Bassiani Nightclub Fabrika Hostel 24
Real Estate Registration and Construction Permit APPENDIX 1
REAL ESTATE REGISTRATION AND CONSTRUCTION PERMIT Property Acquisition Purchase / Gift Document Preparation Documents needed: - Proof of identity document - Duly attested Purchase Contract / deed of gift on immovable item Application Submission Public Service Hall or territorial office of National Agency of Public registry Service Fee Payment - Within 4 business days - 50 GEL - Within 1 business day - 150GEL - On the day of application - 200 GEL Property Registration In Georgia, the National Agency of Public Registry is the state institution responsible for the registration of property, registering both transfers between private entities and state-owned properties. In case of private transfer, the purchaser has two options: Via a notary - contract drafting and legalization by the notary and subsequent registration. The notary assumes responsibility for the content of the draft and its legalization. The presence of a translator and his signature on the bilingual purchase document is required and the translator assumes responsibility for the authenticity of texts. Time for preparation of the bilingual document and its legalization varies depending on the notary Via the National Agency of Public Registry - direct submission of the purchase contract for legalization and registration. In this case, the bilingual purchase document is to be drafted directly by both parties or by their authorized representatives. The Agency s representative certifies the signatures and may provide recommendations if the document is not accurately drafted, but does not carry any responsibility for the validity or its content. The National Agency of Public Registry is represented in: a) Public Services Halls (Tbilisi, Gori, Kutaisi, Batumi, Ozurgeti, Mestia, Zugdidi, Rustavi, Marneuli, Gurjaani, Telavi, Kvareli and Akhaltsikhe) and b) regional departments of the National Agency of Public Registry (located in cities throughout the country). In the case the property being purchased from the state/municipality (privatization, auction or other form of purchase) the documents should be submitted directly to the Agency. Times and fees for registration 4 working days upon the submitting of documents (ordinary time) - the day of submission of documents is not counted - GEL 50 (registration fee per one property) + GEL 5 for certifying the document (GEL 5 per each document subject to submission) 1 working day - GEL 150 + GEL 5 for certifying the document On the day of submitting the agreement in the Agency - GEL 200 + GEL 5 Times and fees for renewal of public registry information Online 1 working day - GEL 10 (USD 4.4) Same working day - GEL 40 (USD 17.6) Justice House 1 working day - GEL 15 (USD 6.6) Same working day - GEL 50 (USD 22) 26
REAL ESTATE REGISTRATION AND CONSTRUCTION PERMIT Construction Permits For the purposes of construction, buildings are divided into five types: 27 1 st class buildings - no construction permit is required; 2 nd class buildings - buildings with low risk factors; 3 rd class buildings - buildings with medium risk factors; 4 th class buildings - buildings with high risk factors; 5 th class buildings - buildings with very high risk factors. The permit issuance process is divided into three stages: Stage I - Statement of urban construction terms; Stage II - Approval of architectural-construction project; Stage III - Issuance of Construction Permit; State organs responsible for the issuance of permits: Local self-governmental (municipal) organs - for II, III class buildings within the municipal territory (at stages I and II) except from Gudauri, Bakuriani, Bakhmaro, Ureki-Shekvetili recreation territories and for special regulatory zones on the territory of Borjomi. Local self-governmental (municipal) organs - for IV class buildings (at stages I and II) with the participation of corresponding state organs Local self-governmental (municipal) organs - for II, III and IV class buildings (at III stage) independently (including Gudauri, Bakuriani, Bakhmaro, Ureki-Shekvetili recreation territories and for special regulatory zones on the territory of Borjomi) Tbilisi City Hall - for II, III and IV class buildings in Tbilisi Municipality (at all stages) independently Corresponding local organs of Adjara Autonomous Republic and Abkhazia Autonomous Republic - for II, III and IV class (at all stages) on the territory of the Autonomous Republics Local self-governmental (municipal) organs - II, III and IV class buildings (at stages I and II) for Gudauri, Bakuriani, Bakhmaro, Ureki-Shekvetili recreation territories and for special regulatory zones on the territory of Borjomi - with the participation of the Ministry of Economy and Sustainable Development. Ministry of Economy and Sustainable Development - for V class buildings Ordinary terms per each stage (working days): Stage I 10days for II, III and IV class buildings 15 days for Bakhmaro, Bakuriani and Ureki-Shekvetili recreation territories (excluding V class buildings), also for all buildings that require ecological expertise. 30 days for V class buildings 18 days for II and III class buildings Stage II 20 days for all IV class buildings, for Bakuriani, Bakhmaro, Ureki-Shekvetili recreation territories, for all buildings that require ecological expertise and for V class buildings. 5 days for II, III and IV class buildings 10 days for V class buildings Exceptions: The special terms for permission process: Construction permits concerning: Stage III III class buildings with an intensity coefficient up to 1,500 p/m 2 and for buildings with a height of up to the 14 meters that will be located on the territories where urbanization regulatory plans do not exist and are organized according to land use or which are organized according to the perspective development regulatory plans on the territory of Tbilisi - the permission process may involve II and III stages only The simplified permit procedure may involve just two stages and the permit is issued in the second stage. The terms for the simplified procedure are as follows: Stage I - 12 days for II and III class buildings 15 days for all IV and V class buildings, for Bakuriani, Bakhmaro, Ureki-Shekvetili recreation territories and for all buildings that require ecological expertise. Permission fees Stage II (issue of permit) - 20 days for all classes The municipal organs determine the permission fees though the maximum limits are envisaged by the Law: For all territory of Georgia - 1 (one) GEL (USD 0.4) p/m 2 of construction territory For construction of industrial buildings at resort areas- 5 (five) GEL (USD 2.2) p/m 2 of construction territory Exceptions: Investors seeking the construction of hotels in free tourism zones and investing not less than 1,000,000 (one million) GEL (USD 440,494) per each hotel are exempted from paying the permission fee.
Primary Information Sources, Data Used for the Study, Definitions and Assumptions APPENDIX 2
PRIMARY INFORMATION SOURCES, DATA USED FOR THE STUDY, DEFINITIONS AND ASSUMPTIONS In the process of preparing the research, we were guided by the information provided by property managers, owners, developers, governmental institutions (The National Agency of Public Registry, the National Statistics Office of Georgia, the National Bank of Georgia, the Ministry of Economy and Sustainable Development of Georgia, City Halls, World Economic Forum). The following web-portals is also used: www.geostat.ge www.nbg.ge www.gnta.ge www.tas.ge www.worldbank.com www.cia.gov www.imf.org www.gnta.ge Definition and Assumptions GEL: Georgian Lari Sq m: Square metre USD: The United States Dollar VAT: Value added tax 29
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COLLIERS GEORGIA AT A GLANCE 5 MILLION GEL REVENUE FROM REAL ESTATE SERVICES 50 PROFESSIONALS 100 * MARKET & ADVISORY REPORTS 25,000 VALUATIONS CONDUCTED RUSSIA 13 CERTIFIED IVS VALUERS 2 RICS MEMBERS $2,9 ** TOTAL AGGREGATE VALUE OF VALUED PROPERTIES $1.3 ** BILLION CONSULTING PROJECTS TOTAL DEVELOPMENT VALUE BLACK SEA TURKEY ARMENIA AZERBAIJAN * Accomplished by team members during last several years ** 2015-2017 figure
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