The FINANCIAL — Israeli investors are going to invest at least USD 50 million in Georgia in 2012.
The FINANCIAL — Israeli investors are going to invest at least USD 50 million in Georgia in 2012.
About 10 boutique hotels comprising 500 hotel rooms are being built by Israeli investments. Among these hotels are Rixos Residential, which is being built on Gudiashvili Street, and Art Hotel, in Abanotubani. Sighnaghi, Borjomi, Kvariati and Tbilisi are the main places were Israeli investors will build the hotels. As the Israeli businessmen say, this year they will be oriented on tourism industry development in Georgia.
Since the three year gap caused by Russian pressure on Israel, Israeli investors are now returning to Georgia.
“Out of the Eastern European countries Georgia is the first country that Israeli investors have returned to,” said Itsik Moshe, President of the Israel-Georgia Chamber of Business. “Before the world crisis Israeli investments amounted to USD 300 million. After the crisis we started to continue investing in Georgia. As the crisis is not yet over, we do not see as big potential in other Eastern European countries as we see in Georgia. Besides, we have 50 percent growth in tourist activities from Israel to Georgia,” added Moshe.
“We expect three flights per day from Israel to Georgia by 2015. Still, there will be a deficit of 10,000 hotel rooms despite the fact that we are creating 500 new hotel rooms. So it will be profitable for Israeli businessmen to run hotel businesses here,” he added.
Israeli businessmen are trustful of the Georgian Government and the way the government handles the economy. Israeli investments will be growing rapidly in Georgia, say businessmen. After the discontent in Israel’s business sector due to the arrest of Israeli businessmen, the trust is already back, claim the investors.
“The bridge of understanding is already built. A group consisting of 15 businessmen came with me to Georgia for the purpose of doing business here,” said Yossi Tatika, businessmen and a head of the Israeli business delegation. “We should listen more carefully to the Georgian businessmen, be more tolerant, and respect them. We are only guests in the country after all,” he said.
“The businessmen are very impressed with the banking system in Georgia, which they consider quite reliable. The government encourages foreign investments in the country and does everything it can to help the growth of the Georgian economy. I believe that Rixos Residence, which is based on Israeli investments, will be a landmark, a symbol of Israeli investments in Georgia,” he added.
“It is very interesting for investors to see a new place which is expected to have significant growth in the coming years,” said Itzhak Gerberg, Ambassador of the Embassy of Israel in Georgia. “Nowadays it seems that Georgia is the best place for investors. The infrastructure is developing and that seems to be giving a big boost to tourism development as well,” he added.
The main problem which is hindering tourism development in Georgia is the high cost of flights and lack of hotels in the county, investors say. “There are not enough hotels in Georgia and there are not enough flights from Israel to Georgia,” said Rozen Beni, one of the founders of Shavit and Rozen Company, which is building a hotel in Borjomi. “Our first project is currently being implemented in Borjomi. We are building 23 hotel rooms near Borjomi Park. We are not investing in other places at present, only in Georgia as we so love this country. Our business plan is to enter a place where we can get profit and do something that is useful for the place at the same time. I remember from my childhood that Borjomi is a special place. I used to spend three weeks in Borjomi almost every year when I was a child. Since that time I have wished for Borjomi to become a centre of tourism in Georgia with good infrastructure,” Beni added.
“After Israel spoiled relations with the Turkish market, more and more Israeli tourists are coming to Georgia,” said Ithak Shavit, another founder of Shavit and Rozen Company. “If the flights are cheaper then that many more tourists will come here. On top of that the government should do some advertisements in Israel to promote Georgia. This country is close to Israel and it is very comfortable for Israeli businessmen to run their businesses here,” he added.
“We want Georgia to develop and Israeli investments to contribute to this process,” said Yossi Hamami, economist. “It seems that Georgia has to make some adjustments to stimulate investors coming to the country. Even to try to help more investors recruit money. In Israel an investor can get a loan from the government, financing them to help the business sector. I think that the Georgian Government should encourage businessmen more. We talked about this issue to the representatives of the Georgian Government and we hope that the government will take our advice into consideration,” he added.
As for Georgian side, Maia Sidamonidze, Head of the Georgian National Tourism Agency, promises that Georgia will run a big advertising campaign in Israel to raise the awareness of the country amongst Israeli tourists. “Georgia will start this campaign by the end of 2012. Israel holds one of the leading positions in terms of touristic activities. 10,456 tourists have visited Georgia from Israel this year. This number has increased by 24 percent compared to the same period of last year,” Sidamonidze added.
“As for the high cost of flights, we are building a new airport in Kutaisi where cheaper airline companies will start operating. So ticket prices will be much less than they are at the moment. We are sure that Kutaisi airport will contribute to the increasing number of tourists in Georgia,” Sidamonidze added.
To create a better investment environment, Israeli businessmen are going to offer a special initiative to Georgia. “We are going to ask Israeli and Georgian governments for Israeli investors to be allowed to take out loans from Israeli banks and invest in Georgia,” said Itsik Moshe.
Maia Sidamonidze promises that all the initiatives of the Israeli investors will be discussed individually. “The Georgian Government will do its best to offer favourable conditions to Israeli investors,” she said.
Discussion about this post