A Safe Haven for Upper-Upscale Hotel Investors

Batumi — A Strategic Investment Destination on Georgia’s Tourism Map

Batumi continues to attract developers and investors. Amid the rapid construction of dozens of new projects, it’s crucial to assess which asset types remain relevant and profitable. Tourism is the key driver of investment appeal, and its dynamics directly affect which real estate formats will win. Let’s analyze how the market is evolving and what investors need to consider.

Tourism in Georgia: Growing in Numbers and Quality

In July 2025, Galt & Taggart released an updated report on Georgia’s tourism sector, confirming that 2024 not only marked recovery but exceeded pre-pandemic levels. The country welcomed 5.1 million tourists, generating $4.4 billion in tourism revenue — higher than in 2019.

However, it’s not just about the number of tourists, but also their origin, spending habits, and preferred accommodation types. This is especially relevant to Batumi, Georgia’s hub for both leisure and gaming.

Who Comes to Batumi — and What Do They Choose?

The most dynamic growth in tourist arrivals comes from mostly high-spending countries: Kazakhstan, Israel, China, India, and the GCC region (others in chart).

According to the report:

• Flights from Saudi Arabia increased by 277% vs. 2019
• Azerbaijan arrivals rose by 177% despite closed land borders
• UAE and GCC countries (Kuwait, Qatar) followed closely

Tourists from the Gulf are among the most solvent. Their primary interests include casinos and shopping, with significant spending in restaurants, especially those connected to casino hotels.

Unsurprisingly, these travelers typically stay in upscale and upper-upscale hotels, which show consistently high occupancy and rates.

What’s Happening in the Hotel Market?

The Galt & Taggart report covers both upscale and upper-upscale segments. Meanwhile, the
Cushman & Wakefield report — prepared specifically for Pontus Rotana — focuses exclusively on the
upper-upscale category, where the performance metrics are even stronger.

At the same time, it’s important to note that during this period there has been a significant increase in the number of hotel rooms:

From 2019 to 2024*:

• Hotel rooms increased from 1,522 to 2,966
• Nearly 94% growth overall, including +44% in upper-upscale
  * It is important to take into account that 2020 and early 2021 were pandemic years.

Forecast for 2025–2028:

• Expected to reach 4,079 rooms
• Approx. +37% growth total (upscale and upper-upscale)

Conclusion: While the number of hotel rooms will continue to grow, the pace is clearly slowing — which supports sustained occupancy levels for existing and upcoming premium hotels, assuming stable tourist flows.

Apartment Market — Entering the Risk Zone

The apartment segment tells a different story.
Here, the number of new units is expected to more than double.

To maintain current occupancy levels, tourism must grow significantly faster, or average stay durations must increase. Otherwise, oversupply may lead to underperformance.

Investment Implications

Upper-upscale hotels remain resilient due to:

• High demand from solvent tourists
• Limited branded supply
• Strong occupancy and ADR

By contrast, apartments face:

• Sharp increase in supply
• Flat or slower-growing demand
• Higher risks to ROI and longer payback periods

Pontus Rotana Resort & Spa — A Response to Demand

The Pontus Rotana Resort & Spa aligns perfectly with the market trend:

• First 5-star Rotana hotel in Georgia, located beachfront in Gonio
• Operated directly by Rotana (not franchised)
• Upper-upscale resort category
• Targeted at high-spending GCC tourists
• First-ever Rotana hotel globally with a casino
• ROI projected at 13%, according to Cushman & Wakefield