Home News RESULTS OF HOTEL INDUSTRY COMPONENT

RESULTS OF HOTEL INDUSTRY COMPONENT




The Hotel Industry Development component of the State program ‘Produce in Georgia’ already gains a huge success. The agency "Entreprise Georgia" already supported 82 business entities, with a total investment volume of GEL 232 mln and based on these 82 new Hotels  total more than 2 550 people will be employed and an additional 2 350 new rooms will be added in the Georgian Hotel Industry.
The New Hotels will be build in Bakuriani, Gudauri, Poti, Ureki, Nikortsminda, Kazbegi, Sagarejo, Ginio, Shekvetili, Telavi, Tskaltubo and Kutaisi. 
Entrepreneurs operating in the regions of Georgia can benefit from the new component of the State Program “Produce in Georgia” – Hotel Industry Incentive. According to the Governmental decision and based on the market demand the scheme was introduced to promote hospitality business across the country, to attract number of tourists, to create jobs and to help the development of each region.
The scheme promotes entrance of international hotel brands via franchise or management contracts by co-financing royalty fees.
It is notable that according to the state program’s component – Hotel Industry Incentive, the Entrepreneur who is interested in the financial support, has the opportunity in any region of Georgia, excluding Tbilisi and Batumi cities:
To Build a New Hotel
To conduct the Expansion/Re-equipment of the existing infrastructure
Also to sign a franchise contract with the international hotel operator and bring the foreign brand in the Georgian market
From the Entrepreneurship Development Agency under The Ministry of Economy and Sustainable Development, the co-financed will be implemented in a following way:
Building a hotel, as well as infrastructure upgrades/re-equipment of the hotel
The co-financing of commercial loan’s annual interest rate by 10% ( in foreign currency by 8%) for the first two years
The Minimum Volume of the Loan – 200,000 GEL;
The Maximum Volume of the Loan – 2, 000,000 GEL;
Collateral participation in the first 4 years, the loan volume by 50%;
Co-Financing in the Consulting services
The Co-financing of Franchise Agreement
Franchise / management contract with so-called “Royalty Fees” co-financing for the first 2 years (no more than 300,000 GEL)
Co-Financing in the Consulting services
The hotel development by the "franchise" agreement
Franchise / management contract with so-called “Royalty Fees” co-financing for the first 2 years (no more than 300,000 GEL)
the co-financing of commercial loan’s annual interest rate by 10% for the first two years
The Minimum Volume of the Loan – 200,000 GEL;
The Maximum Volume of the Loan – 5, 000,000 GEL;
Collateral participation in the first 4 years, the loan volume by 50% (No more than 250,000 GEL)
Co-Financing in the Consulting services
It should be noted that an entrepreneur can take advantage from both co-financing of the loan interest, as well as from current tax co-financing while bringing the brand by "franchise/management contract.
For more information check the link: http://www.enterprisegeorgia.gov.ge/en/business-development/Host%20in%20Georgia

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