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Geotel Assesses 2012 Results Positively, Expands Hotel Network

Published: October 2, 2012 | 7:23 pm
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The COMMERCIAL magazine

Geotel hotel network assessed 2012 results positively. According to the company founder, all the hotels were full. During the interview with The COMMERCIAL magazine Kakha Baindurashvili spoke about the local tourism development perspectives and the future plans of the hotel network development.

- Geotel hotel network is represented with four hotels in Georgia’s regions. What’s been the major motivation conditioning your involvement in hotel business?

- This summer has been the first season for our company. Though we had not conducted an aggressive advertising campaign, all of our hotels were full. Now we’re preparing for winter season.

Geotel network currently operates four boutique hotels in Tusheti, Gudauri, Sataplia and Mestia. We’re motivated to develop Green Tourism in the country, the direction that enjoys quite a steady growth worldwide. All of our hotels are located at ecologically clean areas.

The fact that the segment of boutique hotels is less saturated has been the major motivation conditioning our will to launch this business. There are lots of 3-star hotels in Georgia. However, network management is not developed yet, especially in mountains.

Plenty of tourism-oriented countries are represented in our region. Moreover, Georgia is the part of European tourism market where gigantic brands are working to attract tourists. Thus, it’s rather difficult to remain competitive on the market unless you offer an organized and systemic order of services.

As for challenges, problems raise in respect to transportation. Supply issue is complicated in remotely located hotels, same is with construction materials. However, unlike the Western experience, according to which it takes around 15 years to reach the break-even point, in Georgia this is achieved in a relatively short term. The fact that the number of visitors in our country is increased by 35% annually again confirms the existence of growth demand. In Georgia investing in this business is worthwhile due to the short term of profit gaining.

- Who is the team in charge of Geotel management? What is their prior experience in hotel management?

- Shalva Alaverdashvili, the director of the company has a rich experience in hotel business. Professionals like him in Georgia are quite rare to find. Shalva has worked for years in Great Britain’s famous hotels, in Georgia he was the manager of the hotel network Rcheuli. Also, he’s participated in a number of significant local and international projects. All the members of our team are experienced professionals.

In addition to management, in order to lead a successful business, company needs to hire qualified personnel. One of the main ideas for launching Geotel was the creation of an operator company that in future would offer services for other hotels as well. If we look at the international experience, these two directions are considered as separate businesses. This is a right approach to the subject as theoretical and practical training of the personnel is quite time-consuming. 3-star hotels cannot afford this luxury. On the other hand, there is a seasonal issue. When you have several hotels joined under one network you’re flexible to hire mobile personnel for winter and summer hotel services. Thus, you save expenditures and the company does not have to look for temporary staff. In our case, we operate two winter and two summer hotels where we try our best to maintain permanent personnel.

- Who is your target segment? Which countries do your guests mostly come from?

- Our main segment are tourists who are interested in visiting regions, getting familiar with local architecture and culture. This year the majority of our guests were foreign tourists, mostly from Israel. As for tourists from CIS countries, they’re more oriented at sea tourism. In general foreigners prefer active tourism-mountain tourism. Unlike the tourists from neighboring countries who come here by their own cars mainly to spend holidays at the sea side, European tourists are more attracted to physical activities and refer to mountain tourism. Considering the geographical location of our hotels, this is why the majority of our foreign tourists are from non-CIS countries.

- As for prices, are Geotel rates affordable for middle-income population?

- This year we tried to maintain low prices. However, tour rates, which are focused mostly on foreign travelers, are relatively higher. In this case the expenditures are higher as well. For instance, because of transportation and supply issues, investment provided per person in Tusheti might be ten times more than in Tbilisi.

- How popular are tours offered by Geotel? What types of tours are demanded most?

- Demand on particular type of tours depends on age range. Tourists above 45 years prefer Jeep Tours, Israelis are especially active in this direction. Youth coming from the Western Europe are more into hiking; they take longer holidays and choose walking tours.

- Geotel is not presented at Georgia’s Black Sea Coast till now. Do you plan to expand your network at the seaside?

- We have no intentions to expand business at the Black Sea Coast in near future. Sea tourism differs from mountain tourism. Essentially different approach is necessary to manage boutique hotels in mountain regions and at the sea side. Covering both directions requires additional finances.

- Lately, we see hotel-type residential complexes being constructed in Georgia. Do you plan to use this concept in Geotel hotels?

- The segment of hotel-type residential complexes is less covered. These types of buildings are randomly represented in Bakuriani and Gudauri, also Orbi Group is conducting large-scale constructions in Batumi. As for international experience, for instance, in the French Alps hotel-type residential complexes occupy 30% of the territory. In Georgia this direction has a big potential for further development, however it requires specific know-how of management. If we get interested in this business in future reference, we’ll develop it independently from Geotel.

- What are Geotel’s upcoming plans? Which regions do you plan to expand network?

- In future we plan to cover Kakheti and Samtskhe Javakheti regions, also Adjara. Sea tourism is not our core business though. There’s a big potential for tourism development in mountainous Adjara, but we’ll start from the lowland.

Next summer we’ll be offering operator services to other private hotels as well.




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