DEVELOPMENT STAGES, OPPORTUNITIES AND CHALLENGES OF THE HOTEL BUSINESS AND HOTEL TYPE ESTABLISHMENTS: GEORGIAN EXPERIENCE

Summary. One of the essential and reliable guarantees for the further development of the tourism potential of Georgia, of course, is the development and expansion of the hotel business and hotel-type establishments, because Georgia, as a country of four seasons, has excellent tourism opportunities and has the chance to be active throughout the year. The article's primary purpose is to study and explore the role and importance of the hotel business in Georgia, both in terms of the development of the Georgian tourism market, the society involved in this area, and the formation of financial income in the country. The economy as a whole. Despite the significant successes and results already achieved in this field, as evidenced by the highest ratings of leading and influential international organizations, where Georgia, at different times, as an essential tourist center, as well as individual hotels, is often in advanced positions, the problem is that the hotel industry market in Georgia is still in the process of formation and cannot fully meet the complex needs of customers with different levels, abilities, tastes, and needs. The article analyzes the stages of formation and development of the hotel business and hotel-type establishments in Georgia; current state, features, and development opportunities; analysis of statistical data and results; Existing risks, challenges, and problems, ways to overcome them and prospects, compliance with international standards and impact on the sustainable development of the country's tourism market.


Introduction
At different times and under other conditions, the Georgian hotel industry more or less satisfied customers' needs and was constantly changing.At the end of the 20th century and especially at the beginning of the 21st century, the hotel product, the quality of services, and the principles and methods of hotel management have undergone significant changes, and today they represent a technological and customer-oriented modern hotel industry operating in a highly competitive environment.

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Georgia has been actively involved in gaining the status of an attractive tourist country since the beginning of the 21st century.Today, it is already one of the fastestgrowing tourism centers in the world.This is evidenced by the fact that at different times Georgia is often in the top positions in the top ratings of leading and influential international organizations: in the Association of International Congresses and Conventions -the ICCA rating, which is formed annually and is one of the leading indexes in the field of business tourism Georgia has increased by 16 points in recent years, improved and came out on top in the regions of the Caucasus and Central Asia (in particular, the country is in an advanced position concerning such states as Monaco, Ukraine, Kazakhstan, and Qatar); "CNN Travel" dedicated a special column to Georgia: Nine reasons why we should visit Georgia now."9 reasons to visit Georgia now".(http://edition.cnn.com/2015/08/13/travel/reasons-to-visit-georgia/);Georgia took the 3rd place in the top ten best unknown places in the world published by "Yahoo travel" (https://www.yahoo.com/travel/10-best-places-youve-never-045945682.html);And it took the 5th place in the top ten of the best unknown places in the world published by "CNN," about which almost nothing is known internationally.(http://edition.cnn.com/2011/12/06/travel/12-best-places-bt/).
It is impressive that "Marriott International" ranked the Paragraf hotel in Georgia (Skekvetili) in first place among 300 hotels of the Autograph Collection brand in Europe in selecting the best "franchise" hotels of 2018.The customer satisfaction index determined this status.The "Paragraf" hotel has maintained its leading position for about a year since its opening and is ahead of hotels operating in London, Milan, Barcelona, Rome, and other European cities. Tbilisi hotel "Stamba" was included in the ranking of the best hotels of the influential British publication "Telegraph."The publication evaluates the hotel with 9 points out of 10 points.According to the rating of "Forbes Georgia," which is based on data from American "tripadvisor.com,""Rooms Hotel Kazbegi" was ranked first in the top ten.It is especially noteworthy that the hotels in the top positions in the top rankings of international organizations are Georgian brands.
The number of visitors from foreign countries for recreation, health, knowledge, sports, and business purposes, as well as the activity of local tourists, has gradually increased in the country.
Based on this, the hotel services market, as a unique area of market relations, is gradually crossing national borders, and its development is significantly dependent on the development of international tourism.The structure of the hotel services market is formed by enterprises engaged in providing hotels, hotel-type accommodation facilities, and food services, which in turn meet hotel standards and customer tastes and rely on market prices.The increase in the interest of tourists, visitors, and travelers to Georgia has led to the attraction of investments, including foreign direct investments, which increase dynamically every year, and the opening of branded hotels, which is one of the business cards of the development-oriented and safe hotel business.Reasonable development of the hotel business is an essential source of financial income for the country's economy and a means of raising the local population's standard of living and employment.It covers various С ЕКЦІЯ I I. ПІДПРИЄМНИЦТВО , ТОРГ ІВЛ Я ТА С ФЕР А ОБСЛ УГОВ УВ АННЯ areas of the economy, and its successful activity is one indicator of the country's economic and political stability.
The hotel industry in Georgia faces various tasks at almost every stage of its formation, development, and regulation: • How efficient is the hotel industry in Georgia, and does it ensure the satisfaction of the complex needs of customers with different tastes and needs?
• To what extent was the hotel industry able to offer a highly efficient work system and quality products and services?
• To what extent is the state's support sufficient for further developing hotel business and hotel-type establishments in Georgia?
• What problems and challenges does the hotel business in Georgia face, and what are the prospects for the following planned development and regulation stages?
• How effectively was the state able to maintain and further develop the hotel business under various large-scale risks and the covid pandemic?
Methodology and literature review The work includes the stages of establishment, development, and regulation of hotel business and hotel-type establishments in Georgia, its compliance with customer needs, and its impact on the country's economic growth.
The research uses both quantitative and qualitative approaches to determine the current reality.It is based on statistical data analysis and results, data received from various governmental organizations, non-governmental agencies, and international organizations, and their motivations and actions regarding existing challenges, problems, and effects, also on information from the National Tourism Administration and the State Statistical Service of Georgia, materials, and recommendations from international organizations.Verbal interviews with representatives of the Georgian government and international organizations were used.The conclusion and recommendations are based on the quantitative and qualitative analysis of existing and received data on the current situation and international experience.
Review and discussion: Several factors determine the tourism opportunities of Georgia, and one of the leading factors is the dynamic development of the hotel business and hotel-type establishments.The role of tourism in the economic development of Georgia is excellent, and it is considered a priority sector of the country.The steps taken in this direction directly impact the growth and profitability of the hotel business and hoteltype establishments.
The rapid rise of the hotel industry in Kazakhstan began in 2000, manifested by the rapid development of local hotels, hotel-type accommodation facilities, and food service enterprises, as well as the establishment of world hotel brands in the market.The abundance of world brands and the subsequent increase significantly contribute to the rapid development of the hotel business.Transnational corporations are a novelty in the hotel services market of Georgia, and their number is increasing, which is, of course, a great advantage for the further sustainable development of tourism and the country's economy.The number of local small, S ECT IO N I I. E NT R EP RENE U RS HI P, T RA DE AND SERVICE S ECTO R medium and large hotels that are successfully operating and, with their price policy, offer quality and additional services are gradually growing attractive and competitive for international and domestic visitors.However, it should be noted that the number of mid-range hotels for domestic and international tourism still needs to grow.Even the most superficial analysis of the activities of hotels and hotel-type accommodation facilities in Georgia shows that at certain stages, even today, their development did not respond to market requirements.Moreover, they only enjoyed and were satisfied with such approaches, which allowed for excellent financial results.Even today, many hotel managements in Georgia have yet to respond to real needs and continue to receive income only from the accommodation, i.e., existing room fund, occupancy, and room sales.However, in modern conditions, such approaches are doomed from the start because when the system does not develop, it dies, which directly applies to hotels.We are talking about the fact that in the conditions of tough competition in the modern hotel service market, continuous development of the hotel is necessary to maintain competitiveness.The continuous development of the hotel implies implementing management with new, modern approaches, the cancellation of old and partially effective or utterly ineffective management elements, and the modernization of existing ones concerning modern standards.However, at the same time, when renovating the hotel, it is desirable to preserve the most attractive elements of the hotel's identity.Georgian hotels and enterprises engaged in hotel accommodation facilities and food supply activities have primarily been able to and successfully used.Today, many hotel concepts saturate with elements of Georgia's historical and cultural heritage, from location to Georgian hospitality, which often becomes a means of success.One of the essential factors is phenomenal Georgian hospitality and diverse and unique Georgian cuisine, which often becomes a decisive factor in guest satisfaction.Morten Skumsrud, Vice President of European Franchising of Marriott International, said at the award ceremony of the Paragraph hotel in Georgia (Shekvetili): "There are about 300 franchised hotels in Europe, and being among the best in this nomination is an indicator of our team's attitude For the hotel, its guests, the "Marriot" and "Autograph" brand, it not only meets the customer's requirements but also exceeds all expectations, which is a great merit of the standard service and Georgian guest-hospitality.
The hotel business, unlike other areas, is a relatively complex, multi-factorial, and unique system, as it is a constantly changing mechanism and primarily depends on the hotel product and service quality, which the hotel staff continuously creates throughout the process.The quality of hotel products and services in Georgia is challenging for the hotel business and tourism development.It occupies a special place in the continuous development cycle of the hotel.The needs of customers mainly determine the formation of a quality hotel product.Practice shows that the creation of a new product is a creative process related to the analysis of many factors, which requires much time, qualified personnel, and funds from the conception of a new hotel product to its realization.Forming a new hotel product involves market research, estimated sales volume, life cycle, benchmark price, market launch period, and sales.Such an approach to creating a new product excludes the spontaneous character of this process because the hotel changes its С ЕКЦІЯ I I. ПІДПРИЄМНИЦТВО , ТОРГ ІВЛ Я ТА С ФЕР А ОБСЛ УГОВ УВ АННЯ position in the market and conditions the existence of the mechanism of continuous development of the hotel.Today, the formation of a quality hotel product contributes to the arrival of a sufficient number of visitors to the local hotel industry.
Parallel to the growth of the hotel business in Georgia, the quality of service is a significant challenge since quality service is the key to business success.Customer satisfaction depends on the quality of services provided by hotels, which leads to a competitive advantage and a high level of financial income.Although the hotel's concentration on high-quality and affordable hotel services leads to its continuous development, more than the existing standard services is required, no matter how high-quality.The hotel is obliged to provide not only additional services but also the provision of any service according to desire and need.This is evidenced by the Georgian government program, according to which, for the development of the tourism and hotel services market, the Georgian government, among other conditions, places a particular emphasis on improving the quality of service.Availability of hotel services in different places and conditions and without the state's involvement becomes almost impossible.
Georgia distinguishes by its unique places where people can share ancient culture and enjoy wild sights.Almost untouched nature, interesting natural and cultural values, high mountain ranges and abundant rivers, diversity of flora and fauna, and unique endemic species.Therefore, many tourist attractions scatter in mountainous and often inaccessible places, where the hotel business is tiny or underdeveloped, which is a severe problem.Despite the implemented projects in this direction, the hotel business of Georgia still needs to overcome such a challenge.The work on the mentioned issue has already started.
It continues with the great support of the state, which is first of all expressed by the fact that the state provides for the development of the hotel industry, the financing of all infrastructural works, and funding of direct and targeted infrastructure and infrastructural objects directly related to the hotel.This is evidenced by the government program of Georgia, according to which the government of Georgia places a particular emphasis on improving the hotel business, among other conditions, for tourism development.Because the hotel business plays one of the leading roles in the formation of the country's GDP, as well as in terms of the formation of state budget revenues.In addition, there are other government programs in the country, including the "Produce in Georgia" program, through which the country co-finances new hotel projects.At the government's initiative, a new project has been launched, which envisages the creation of new tourist and resort attraction centers, for which 200 million GEL was allocated from the state budget.
The world is changing, and it is clear that the operation of the hotel industry everywhere, as well as in Georgia, in addition to the lack of resources necessary for its activity, may be threatened by various unknown and unpredictable challenges in the form of acceptable, critical, and catastrophic risks.The unstable and turbulent economic, political and social environment caused by such unpredictable, largescale, and devastating risks as the 2008 Russia-Georgia war, the Covid pandemic, and the Russia-Ukraine war left their mark on the Georgian hotel business and the S ECT IO N I I. E NT R EP RENE U RS HI P, T RA DE AND SERVICE S ECTO R development of the Georgian tourism market as a whole., which have undergone drastic changes in the last few years.
The aggression of Russia in 2008, which ultimately led to the temporary occupation of almost 25% of Georgia's territories and which continues to this day, cast a deep shadow on Georgia as an attractive tourist country, which in turn affected the development of hotel business and hotel-type establishments.
The Covid pandemic was able to cause severe damage to Georgia, both in the field of tourism, hotel business, and hotel-type institutions, as well as for the economy as a whole.One hundred thousand people in the tourism sector, including the hotel business, were unemployed and without any income.Based on today's reality, Georgia could deal with the mentioned large-scale problem.At the same time, the government of Georgia, in parallel with the successful fight against the Covid pandemic, took necessary steps in terms of the survival and further development of the tourism sector and hotel business and hotel-type establishments in general, which was implemented in several stages.The package of emergency benefits and assistance implemented in the first stage looked like this: Business entities related to tourism, including hotel businesses and hotel-type institutions, were deferred for four months of property and income tax until November 1, 2020, which covered 6,118 business entities.The budget amounted to 113 million GEL.The statesubsidized 80% of the 6-month bank loan interest for small hotels.Which benefited 2,200 hotels and the budget amounted to 10 million Lari.At the same time, the possibility of loan restructuring also appeared.In the second stage, a package of benefits and assistance was implemented, which concerned those employed in the tourism industry, including the hotel business and hotel-type establishments: Employees who lost jobs or were sent on unpaid leave received 1200 GEL for six months.The self-employed who lost their income received one-time assistance for 300 GEL.The employer of the tourism industry received a state subsidy for every retained job: for six months, the salary of 750 GEL was entirely exempted from income tax.The package of benefits and assistance implemented in the third stage was mainly related to accommodation facilities: exemption from property tax in 2020, postponement of income tax until the end of 2020, and subsidized loans for accommodation facilities.They subsidized participation fees at tourism exhibitions and promoted the introduction and implementation of UNWTO recommendations.The budget included: the cancellation of property tax for the tourism industry in 2020 -45 mln.GEL, exemption, and deferment from income tax of the tourism industry -90 mln.GEL, subsidizing hotel loans -60 mln.Lari (3,000 hotels) and support of tourist companies and guides -5 million.Lari.Despite the lockdown caused by the pandemic, in 2020-2021, about 260 accommodation facilities were involved in the Covid hotel's project, and about 4000 people were employed.
The government of Georgia was able to successfully fight against the Covid pandemic and take serious steps for the further development of sustainable tourism and hotel business.

Statistical data and results
Economic growth in Georgia in 2021 amounted to 10.4%.According to preliminary data, the economic growth will be double-digit in 2022 as well."For nine С ЕКЦІЯ I I. ПІДПРИЄМНИЦТВО , ТОРГ ІВЛ Я ТА С ФЕР А ОБСЛ УГОВ УВ АННЯ months, there has been 10.2% economic growth in Georgia, unprecedented in all of Europe.The restoration of tourism is proceeding at a fast pace, and if we compare it to 2019, this year, tourism has already been restored by 97.5%.The received incomes amounted to 2.5 billion USD," -states the Prime Minister of Georgia, Irakli Gharibashvili.The unprecedented growth of economic indicators is a great merit of the hotel business, which is visible from the statistical data.
To create a clear picture, we offer the declared statistical data of Georgian hotel enterprises for 2014-2021.Based on statistical data, on the one hand, in the first stage until 2020, we are dealing with a significant increase in the number of hotels and hotel-type enterprises engaged in the provision of accommodation facilities and food delivery, as well as in all the components of this field.At the next stage, in 2020-2021, with the simultaneous decline of all components caused by the Covid pandemic, and then, from 2022, again with the growth of all components of this area.
The On the other hand, separate components of hotels and hotel-type enterprises engaged in the activities of providing accommodation facilities and food supply: С ЕКЦІЯ I I. ПІДПРИЄМНИЦТВО , ТОРГ ІВЛ Я ТА С ФЕР А ОБСЛ УГОВ УВ АННЯ turnover volume, the output of products, added value, number of employees, and investments in fixed assets, in turn, look like this [1]: Chart N 3 [1] Georgian National Tourism Administration.www.gnta.ge From 2006 to 2019, the volume of turnover of enterprises engaged in the provision of accommodation facilities and food delivery activities increased equally every year.According to the indicator of 2019, the turnover volume is more than 2 billion GEL.With the indicator of 2020, we can see that the turnover volume dropped sharply and almost halved, caused by the Covid pandemic.Moreover, from 2021, it started to rise again at a reasonably fast pace, and the noticeable increase continues today [1].

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In 2006-2010, the output of enterprises engaged in providing accommodation facilities and food supply was almost at the same pace.From 2010 to 2019, the annual rate increased, while the rate in 2020 fell sharply.Here too, from 2021, the rise began again at a reasonably fast pace, which continues in 2022 [1].
Chart N 5 [1] Georgian National Tourism Administration.www.gnta.ge Let us look at the annual indicators of the added value of enterprises engaged in providing accommodation facilities and food delivery.The chart clearly shows an annual increase from 2006 to 2019, and in 2020, a sharp drop in the indicator can observe.With the 2020 indicator, the benchmark has also returned to the 2015 data.From 2021, it began to rise again at a reasonably fast pace, and in 2022, the significant upward trend continued [1].
Chart N 6 [1] Georgian National Tourism Administration.www.gnta.ge As for the number of employees, from 2006 to 2019, we are dealing with an annual increase in indicators, and in 2020, a sharp drop.With the indicator of 2020, the benchmark returned almost to the result of 2014.Unlike other components, from 2021, the number of employees of enterprises engaged in the provision of accommodation and food delivery began to rise, and the upward trend continued in 2022, although at a relatively low pace [1].
All the reviewed data unmistakably confirm that the covid-pandemic and the resulting lockdown in Georgia have practically set back at least five years (if not more) and caused irreparable damage to the hotel business in all parameters.This is confirmed by the analysis of statistical data and the results, where it became clear that the Covid pandemic has ushered in a new stage of opportunities and development of the hotel business, both around the world and in Georgia, which will be different from the reality of the previous period.
Global hotel brands are successfully operating in Georgia today, enjoying the best evaluations from visitors.According to the data of Forbes Georgia, which is based on the data of the well-known American website -"tripadvisor.com," the capital of Tbilisi and the Black Sea resort of Batumi are again in the top ten of the ranking.
The situation is similar in terms of load factor in branded hotels, the dynamics of which, according to recent years, looks like this: 2018-60%, 2019-56.3%,2020-22.2%.According to STR Global, the occupancy rate of hotels in Georgia was 45.7% in 2021, and the increase compared to the previous year was 106.8%.Here too, Batumi is leading with the load factor at 55.4% and Tbilisi at 41%.In 2022, the load factor will increase significantly, considering the well-known events in Russia-Ukraine.Today's reality has further changed the situation in Georgia as a whole and also in the hotel business.The Russia-Ukraine war caused a large flow of refugees from Ukraine and an unprecedented number of migrants from Russia, especially in the 2-3-4 quarters of 2022, which further caused a significant increase in the load factor of hotels and hotel-type establishments.
The characteristic of the hotel services market is capital intensive, and its development depends on economic, political, and social factors, especially on the processes taking place in regional and global conditions.One of the essential factors is direct foreign investments.According to the data for the three quarters of 2022, the volume of foreign direct investments in Georgia already amounts to 1.7 billion US dollars, where about 40 million US dollars come from investment funds.The large-scale growth of direct foreign investments in Georgian businesses, including the hotel business, directly depends on the indicators of the fight against corruption and business promotion.Regarding the fight against corruption, Georgia maintains an advanced position globally and ranks first among Eastern Europe and Central Asia countries.
"We see great progress in the fight against corruption, where Georgia is an advanced country.This is what causes the attraction of foreign direct investments in Georgia, which, among other points, is the path to the European Union for Georgia," -said Oliver Varhey, European Commissioner for European Enlargement, who is on a visit to Georgia.
From 2022, hotels and hotel-type establishments will grow at an even greater rate, and according to official information, the forecast for 2022-2025, the following hotels plan to open in the country [  For Georgia, the hotel business is a relatively new system, which, despite the successes and results, should be further developed and refined considering international standards.A vital and decisive factor in the development of the accommodation industry is the state's involvement.It is only possible to determine some things in advance.However, developing a specific, consistent and systematic strategy and tactics is crucial to ensure the hotel business has continued harmonious development.It is necessary to find the golden middle, which ensures the harmonious combination of the hotel business and hotel-type establishments with tourism destinations, which will ultimately be a big step forward for the development of the country and the increase of financial income.
The hospitality industry is complex and unique due to its specificity; simultaneously, it is a vulnerable system that reacts painfully to even minor fluctuations, especially large-scale risks and challenges.The only correct way to overcome these problems is their continuous development.In the continuous development cycle of the hotel, the quality of the hotel product and service has a privileged place, taking into account the new realities.
Our work, analysis, and results clearly show that there is no alternative to the further development and advancement of the hotel business.Hotel-type establishments, which in turn are one of the essential prerequisites for the sustainable development of tourism, are directly proportional to the well-being of the country and society.
Conclusion and recommendationsOne of the essential factors of tourism development and economic growth in Georgia is undoubtedly the development and territorial expansion of hotel business and hotel-type institutions.Авторські права захищені | Creative Commons Attribution-ShareAlike 4.0 International License 57 С ЕКЦІЯ I I. ПІДПРИЄМНИЦТВО , ТОРГ ІВЛ Я ТА С ФЕР А ОБСЛ УГОВ УВ АННЯ Judging by the declared data of the leading indicators of hotels and hotel-type accommodation facilities, we can see that the number of hotels gradually increased yearly.In 2019, according to the results, it reached the leading indicator of 1,682.Moreover, the following year, due to the Covid pandemic, in 2020, the data dropped sharply and almost returned to the 2014-2015 level.Of course, approximately the same indicators are shown in the total numbers.When summarizing the number of guests, the number of employees, and all indicators.The declared data of Georgian hotel enterprises for the years 2014-2021, according to the components, looks like this [2]: [2] National Statistics Office ofGeorgia.www.geostat.ge National Statistics Office of Georgia.www.geostat.ge