The FINANCIAL — Georgian hospitality industry representatives are working on the creation of a new reservation system in order to compete with global reservation websites. The aim is to save money on services provided by global systems. The new system should help small hotels and restaurants to develop their business in the fast growing hospitality environment.
“There are many standards in the world, like American or European ones, but we are going to establish our own, Georgian standard,” said Ketevan Meladze, President of the Georgian Hotel and Restaurant Federation. “The first step of the Federation will be precisely to create a ‘Georgian standard’. The Federation will also implement modern systems of e-governance. The programmes that hotels use today are very expensive for them and if we take into consideration the fact that in Georgia the majority of hotels and restaurants are small sized, they almost can’t afford to pay for such programmes. Therefore, we intend to bring to the market several organizations which will provide the same service for a lower price. We have a new idea for the reservation process as well. Today we know that booking.com is very popular and widely applied, but it charges a high percent from the hospitality industry. We think that an alternative website should be created which will have a cheaper service. It will be better if this website is located on a state portal and is easily accessible for all interested people. At the moment the popular site ‘booking.com’ takes 15 percent from Georgia, but we will offer at least a quarter less than that,” she said.
The Federation is partnered with German fund GIZ, which is right now financing the preparation of managers for hotels and restaurants. Later on these managers will train the whole service staff in Georgia. The project will start in November of this year and will last for two years.
The Georgian Parliament ratified the Association Agreement with the European Union on 18 July, 2014.
The tax system is one of the most important problems which hospitality industry representatives think needs to be solved.
“There are seasonal hotels which should not be rated when it is not their target season. For example, those hotels which work in winter should not be rated in the summer and the opposite too. Income tax should be reduced for those investors who have just started their activities. This is so as to encourage them to do business. This will not only encourage local investors but also foreign ones, who will invest in Georgia with greater pleasure as a result,” Meladze said.
“On the one hand there are lots of opportunities in the field of restaurants. But on the other hand there are problems too,” said Aleksandre Margishvili, Vice Mayor of Tbilisi. “To solve these problems the more effective way is to work together instead of working separately. However, healthy competition should not lose its strength in developing business. The best option is to have partnership and competition at the same time. As a result the consumers will benefit from it. Not only improving the service quality, but bringing healthy food to this industry is vital at the moment. If we take into consideration that Georgia is expecting a very big flow of tourists by 2015 within the framework of the Youth Olympic Games, it is very important that the Federation creates a useful platform for all the businesses that will be involved in the preparatory works,” he added.
“This sector can only survive if it has powerful organization like this federation,” said Hans Ulrich Trosien, expert in tourism. He has been sent to the Department of Tourism and Resorts of Adjara A. R. by the International Migration and Development Center (CIM). “Taking into consideration Georgia’s goal to become a member of the European Union, serious changes are needed in many sectors including the hotels and restaurants sector. The legal situation in Georgia should be adapted to European law. A lot of standards should be changed and the bureaucracy should be changed to a higher level. In particular, in terms of labour safety, fire prevention and much more,” he added.
“I should also mention taxes. The labour code should be changed and be adjusted to European standards. All this is connected to enormous costs. These costs must be bordered otherwise many hotels and restaurants will get serious financial problems. These problems are enough to join the Federation. My recommendation is to see the Government as a partner and not as an enemy. The Federation should provide the Government with exhaustive information about the hospitality industry,” Trosien said.
“We know that the number of tourists in Georgia is increasing significantly, by 25 percent per year,” said Ahmed Eiweida, sector manager at World Bank. “The contribution of tourism to the GDP is also increasing. So, Georgia should not worry any longer about the quantity, but about the quality. Accordingly, the main goal of the Federation should be to help the hotels and restaurants in Georgia to provide quality service. The second message is that the World Bank has already been investing a large amount of resources, technical and financial, to support the tourism industry in Georgia. Having started with Kakheti, now Imereti is undergoing changes and this will very soon happen in Samtskhe-Javakheti and Mtskheta-Mtianeti. The whole idea is to create an environment for people who are involved in the hotel and restaurant industry to reach the areas where it was impossible to go because of a lack of infrastructure. We are once again ready to support the hospitality industry in Georgia as we do in general,” he added.
During the first seven months of 2014 the number of tourists increased by 4 percent compared to last year. The statistics also show that the number of Italian tourists visiting Georgia increased by 13 percent. The number of tourists from Lithuania increased by 88 percent, from Poland – by 47 percent, from Austria – by 17 percent, from Latvia – by 17 percent, and from Belarus – by 57 percent.
As for the income from tourism, it increased by 4 percent in the first quarter of 2014 compared to 2013. Last year the amount of money attracted by tourism amounted to USD 302,817.7 thousand while this year it amounted to USD 315,317.5 thousand, according to GNTA.
The number of visitors in August 2014 amounted to 772,216 (0.5 percent) less than the index of the same period in 2013, according to the statistical data on visitors crossing the border of Georgia in August 2014, provided by the Ministry of Internal Affairs of Georgia.
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