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Georgia as a paradise for extreme vacationers2009-06-30 15:44
Georgian seaside resorts are half empty. Hotels offer discounts hoping to attract travelers who are not in a hurry to come to the country of magnificent Alpine meadows, ancient temples, Black Sea resorts and Borjomi healing waters. How will Sakartvelo tourist business survive the crisis?
The effect of the crisis on tourist and hotel business of Georgia was not immediate. After last August's war the owners started to panic and by winter the global economic crisis brought the gloomiest forecasts. In spring the last hope was buried by the ongoing protest actions.
Economic Palette newspaper with reference to the experts writes about this year's tourist business being on the level of 2004 in terms of prices. As a consequence the owners are bearing losses. Head manager of Tori hotel in Tbilisi remarks only one or two rooms out of 42 were occupied in May. Underload is the major loss for the hotel. Earlier the hotel's conference hall was leased out for various events, now the business community holds back on extra spending. Comparing to 2007 the hotel's revenues shrank by 70 %", - he complains.
Tamara Kaikatsishvili, the Georgian Palace (Kobuleti) hotel manager complained to Kommersant radio about 20% reduction in the flow of travelers. Hotel owners have already had to cut prices from GEL 150 to 99 per room. Borjomi Gorge wellness center managers didn't lower prices and as the radio reports the number of travelers was halved.
Gudauri ski complex reports huge losses in follow up of last year's results with GEL 3 mln 797 thousand deficit. However in 2007 it was deep in debts too having GEL 3 mln 606 thousand as liabilities. The ski complex managers account the losses for investments in ropeway construction. Gudauri control stake belongs to the state, 10.5% of the stock is owned by BTA Georgia bank and 2.5% - by a group of individuals.
Only foreign investments can save the complex from bankruptcy. Recently Georgian Economy Minister Lasha Zhvania told Georgian media that Israeli businessmen displayed interest in purchasing Gudauri. On July 9 Tbilisi welcomes the delegation of Association of Israeli Entrepreneurs with a potential buyer of the hotel in it, Zhvania says.
Georgian leaders see no problems in the situation of the tourist business in Georgia. Officials explain the problems are caused by last year's war and frantic manifestations of the opposition's discontent they have nothing to do with. The government believes it contributes a lot to this economy sector by working out a law on VAT benefits for tourist companies and sponsoring the development of health-resort infrastructure.