Hotel investment — in real numbers, not in a pitch deck

Georgia offers attractive opportunities for international hospitality investors, supported by a growing tourism sector, diverse destinations and a hotel market that continues to develop.

Tbilisi, the Black Sea coast, mountain and ski destinations, and Georgia's wine regions offer opportunities across different hospitality segments — from city hotels and internationally branded properties to resorts, boutique hotels and wellness concepts.

However, an investment decision should never be based solely on the overall potential of a country or destination. Each opportunity should be assessed individually, taking into account location, demand, competition, seasonality, development costs and expected financial performance.

Our approach is to evaluate the opportunity first — and the investment second.

A popular destination does not automatically make a good hotel investment.

The right opportunity depends on the amount of capital to be invested, the investor's objectives and risk profile, target guests, seasonality, competitive supply and actual market demand.

We therefore assess both the destination and the most appropriate hospitality format — whether a city hotel, resort, boutique hotel, aparthotel, wellness & spa property, internationally branded hotel or another concept.

The objective is not simply to select a popular location, but to identify the combination of location, concept and market positioning with a strong commercial foundation.

Foreign investors can invest in and own real estate in Georgia through various structures. However, the appropriate structure depends on the type of asset, land classification and the legal framework applicable to the specific project.

Particular attention should be paid to land ownership, as certain categories of land may be subject to restrictions on foreign ownership.

Before acquiring a property, appropriate legal and property due diligence should therefore be carried out to verify title, land status, development rights and other relevant legal matters.

HMG can coordinate the investment process with qualified legal and technical specialists to help ensure that the project is structured appropriately from the outset.

A hotel investment should not be assessed solely on an attractive location, impressive architecture or financial projections presented by a seller or developer.

A professional assessment considers market demand and competition, the proposed hotel concept and scale, total development costs and the property's expected operating performance.

A Hotel Feasibility Study can provide investors with a clearer understanding of the project's strengths and weaknesses, capital requirements, revenue potential and key risks before significant capital is committed.

Our role is not to demonstrate that every project is a good investment. It is to help determine whether a particular opportunity is worth investing in.

There is no universal return on investment for a hotel.

Financial performance depends on factors including acquisition or development cost, hotel category, number of rooms, Average Daily Rate (ADR), occupancy, seasonality, additional revenue streams, operating expenses and management efficiency.

A project-specific financial model can therefore be prepared to assess projected revenues and expenses, Occupancy, ADR, RevPAR, GOP, cash flow and other key investment indicators under realistic operating scenarios.

Rather than relying on a promised return, investors receive a data-driven financial picture that helps them evaluate potential performance and make an informed investment decision.

Hotel investment risks may include an unsuitable concept, overestimated market demand, development cost overruns, construction delays, inefficient design, seasonality, inappropriate operator selection and underperforming hotel management.

Investment risk can never be eliminated completely. However, many risks can be identified and significantly reduced before major capital is committed.

Market research, feasibility analysis, financial modelling, due diligence, development budget control, operational design review, operator assessment and professional project monitoring all contribute to a more informed and controlled development process.

Effective risk management begins before the investment is made — not after problems arise.

For an international investor based outside Georgia, having experienced local representation can be critical.

HMG can act as the investor's Hospitality Advisor / Owner's Representative, coordinating with the various parties involved in the project — including consultants, architects, designers, hotel operators and other professional teams — from the owner's perspective.

Depending on the scope of engagement, this may include monitoring project progress, budgets, timelines, hotel concept, design and operational requirements, as well as the pre-opening process, with regular reporting to the investor.

This allows international investors to maintain visibility and professional oversight of their investment without being permanently present in Georgia.

The process begins with understanding the investor's objectives — the level of investment being considered, preferred type of hospitality asset, whether a specific property or opportunity has already been identified, and the expected investment outcome.

If a specific project already exists, we can begin with an initial assessment of that opportunity. If the investor is still exploring the Georgian hospitality market, the process may begin by identifying suitable locations, market segments and investment directions.

The next step is to define the appropriate scope of work, which may include market assessment, feasibility study, financial modelling, due diligence coordination, development advisory, hotel operator selection or full project support.