The FINANCIAL — Bank of Georgia, one of the leading Banks in Georgia has declared of crediting Holiday Inn. The credit budget of USD 13 million will be disbursed for finalizing the hotel.
The total budget for the hotel is USD 26 million, half of the project is financed with the capital of Adjara Group, which owns the project of Holiday Inn and the rest by BoG loan.
The terms of the loan disbursement and the interest rate are confidential. However, it was mentioned that debt will be long-term.
“Financing the project is quite important as the new brand enters Georgian market. It is the first project of such scale in the hospitality business and we strongly believe that economy of Georgia today is in a phase when making such steps is possible,” says Archil Gachechiladze, Deputy CEO at Bank of Georgia.
“Hospitality business is one of the major determinants for tourism development and we do believe Georgia has the potential of becoming a tourist country, therefore, we are ready to credit this sector by USD 13 million,” he adds.
Gachechiladze says that corporate clients will be offered much simpler terms and bigger crediting in 2010.
The volume of credit portfolio has reached GEL 1,8 billion in the first quarter of 2010. Gachechiladze says that increase will continue during the year.
“Holiday Inn in Tbilisi will be the first franchise within hotel that entered Georgian market,” says Iva Davitaia, CEO of Adjara Group, building Holiday Inn.
The world brand hotels Marriott and Sheraton are managed under the management contract in Georgia.
“Holiday Inn is classical franchising that slightly differs from management contract and gives the owners of the hotel an opportunity to manage the hotel,” says Davitaia.
Holiday Inn, located in the building of former hotel Adjara will be a 4 Star Hotel and its opening is planned in September-October in 2010. In the first year, the hotel forecasts to receive approximately 75 000 guests.
There will be 316 rooms in the hotel as well as entertaining centers, restaurants, cafes, lounge bar, and conference rooms.
“Holiday Inn believes it is worth to enter Georgian market. There are several other companies already operating in the field. However, Holiday Inn has its niche market offering much lower prices rather than Marriott and Sheraton,” says Gachechiladze.
As Davitaia says, in terms of local competition in Georgia, there are a number of factors to be considered.
“The image of the hotel should be of international level, we are speaking of international visitors.
Holiday Inn is the large-scale brand in the world, it has a huge hotel chain and is operating in approximately 100 countries, moreover, it has the first large-scale reservation system. Therefore, we are not scared of competition,” declares Davitaia.
“One of the competitive advantages of Holiday Inn is that the guests will receive high quality service at an reasonable price.
Holiday Inn is a solid brand and that’s why we gave preference to it,” he adds.
Gachechiladze says that Bank of Georgia has many other projects in the construction business.
About a week ago Bank of Georgia started renovation works of three big projects in Batumi. Moreover, the bank is actively cooperating with City Hall and is engaged in the project New Life of Old Tbilisi among banks.
“There is high potential of tourism development in Batumi as well as in other parts of Georgia. Moreover, there is high support from Turkey for investors to arrive in Batumi,” declares Gachechiladze.
Davitaia also believes of Georgia being a country with high potential of tourism development, he refers to the statistics provided by the Department of Tourism.
“Statistics says that the rate of holiday-makers is increasing by 15-20%. Despite August war, the year 2009 was quite positive according to the Department of Tourism. Moreover, forecasts are also positive for 2010, they say the number of tourists will reach to 1.5 million in 2010,” declares Davitaia.
The brand Holiday Inn is managed by Intercontinental Hotel Group (IHG) which unites other 7 brands including Holiday Inn. It offers more than 630 000 hotel rooms worldwide and 4 300 hotels in almost 100 countries.