The subtleties of tourism in Georgia: the line between crisis and revival

How Produce Georgia Agency will help business in a pandemic

Creating a prosperous business climate in Georgia is one of the main tasks of the government. Business in Georgia should shape the country's GDP, introduce technologies and innovations. After all, given the fact that the country has neither a powerful industrial potential nor rich minerals, it is possible to provide the population with jobs and develop the economy only by creating comfortable conditions for doing business not only for local entrepreneurs, but also for international investors. Unfortunately, this will not be possible without incentive legislation. At the moment, we can observe promising steps by the government towards this - low taxation, simplicity and availability of company registration, work on the creation of modern infrastructure, tax incentives in the Free Industrial, Virtual and Tourist Zones.

At the moment, there are acute issues that hinder the development of business in Georgia. In the first 5 months of 2018, the country's business ombudsman conducted 564 contacts with businesses and 20 meetings with associations. Almost all appeals are complaints and appeals for help, 64% of which came from Tbilisi, 10% from Adjara, 26% from other regions. On the basis of them, the main problems faced by business in Georgia were formulated. More details about them will be discussed in our article.

At the moment, the share of GDP of small and medium-sized businesses in Georgia is 20%, which is very low in comparison with other countries (not only in Europe).

Of the factors that negatively affect its development, the following can be distinguished:

  • Bureaucracy.
  • The complexities of the judicial system.
  • Unskilled labor.
  • Low level of knowledge of doing business at the international level.
  • Difficulty lending.
  • High cost and competition.
  • Difficulties with the privatization of agricultural land.

Business in Georgia: bureaucratic obstacles and difficulties with lending

Business in Georgia has an ambiguous attitude towards the judicial system. Entrepreneurs often face delays in court proceedings and cases. The trial itself is going on ambiguously - the court acts only as a moderator, paying attention only to the details and not affecting the investigation process itself. The reason is that investigations are not within the competence of the courts. An exception to this is possible only when the investigation slows down doing business in Georgia.

Also an acute problem is the very slow reaction of the municipal authorities to the applications of entrepreneurs, the consideration of which is delayed indefinitely.

Banks in Georgia do not consider themselves to be an investment vehicle for business. Considering that it is possible to take out a loan only upon confirmation of its return, this problem slows down newly created enterprises, which lack funding. To solve this problem, the government plans to create a loan guarantee mechanism. It will become a kind of guarantor of the return of finances received on credit by small and medium-sized businesses in Georgia.

Business in Georgia and the impact on it of the lack of qualified specialists

One of the most important business problems in Georgia is the low qualification of specialists and a shortage of personnel. There is a very high demand for workers with vocational education in the employment market. Most vacancies were registered in the trade (38.5%), healthcare (8.3%), processing industry (13%), construction (7.2%), tourism (1.9%) - according to data on 1 September 2017.

In order to provide business in Georgia with qualified personnel, investment by the state in vocational training is necessary. Then, at the same time, another acute problem of the country will be solved - unemployment (at the moment, 500 thousand citizens consider myself unemployed).

At the moment, there is an acute shortage of specialists in the field of equipment management in industrial production and food products. It is also very difficult to find a qualified accountant in the country - a specialist who is important for a successful business in Georgia. This problem especially affects non-resident entrepreneurs, because for reporting and filling out declarations, it is required not only to have good tax knowledge, but also to know the Georgian language.

Business in Georgia and problems hindering its development

The pandemic of the new coronavirus has presented challenges not only to Georgian business, but also to that state agency, one of whose goals is to improve the country's business environment

In order to strengthen support for local entrepreneurs, the Georgian government decided to expand the "Produce in Georgia" project.

The changes will affect the programs for subsidizing loans and collateral, which cover more than 200 types of activities, and micro-grants, which cover more than 300 types of activities.

The main thing is to give access to finance

Head of the Department of Entrepreneurship of the Produce in Georgia agency Lasha Bostashvili said that all the programs of the structure are aimed at increasing the availability of finance for entrepreneurs.

However, according to him, in 2019, both businesses and banks had virtually zero interest. But now, when the country, as a result of the pandemic, faces new challenges, both business and financial institutions need to use this product.

"Today the budget of this component is already 300 million lari, and the banks, for their part, should make up a loan portfolio of approximately 2.1 billion lari. We already have an agreement with 13 commercial banks, and the process has begun It should also be noted that this time the state, in the event of a new loan, will secure 90%, "Bostashvili said.

He said that another important component was added to the program this year, which, when restructuring the old loan, implies the provision of a 30% guarantee from the state.

"For greater clarity, I will say that a representative of any business with a loan can apply to the bank with a request to restructure it, after which Produce in Georgia will provide a 30% loan security from 5 thousand to 5 million lari ", - explained the head of the department.

  • Since 2014, Produce in Georgia Agency has supported 359 production projects, as a result of which more than 13 thousand jobs have appeared in the country. Including, over the past year, 85 projects were financed, which is 31% more compared to 2018. Private sector investments also increased by 19%.

At the same time, he stressed that representatives of the trade industry can already use the agency's programs, in particular, take a loan in the amount of 50 thousand lari to 5 million lari and use it for operating expenses. For example, to pay for utilities, pay salaries, pay rent.

New Challenges - New Programs

Bostashvili said that at the end of 2019 the agency optimized a number of programs, in particular, reduced the amount of subsidies for a two-year loan from 10% to 7%.

Business in Georgia faces many serious challenges. They hinder its development, due to which some enterprises are closed or even not reopened. These problems will be discussed in the article.

Georgia is just a paradise for tourists, here you can see everything: the big sea, huge mountains, virgin forests. Here, the cleanest air, saturated with the aromas of cuisine, old stone pavements, with a light smack of citrus and the freshness of the sea. Here you can spend your vacation with your family, friends or loved one. Lie on the sea beach or walk through the ancient castle, taste the famous Georgian cuisine and drink excellent Georgian wine.

Georgian Tour is an independent independent tour operator in Georgia

Dear tourists and visitors of the site, we draw your attention to the fact that the company "Georgian Tour" has been successfully organizing individual and group tours for several years and is a de facto tour operator in Georgia. Organizations such as Moscow Metro, Horse Police, Mostostroy and other large companies from all over Russia traveled with us.

Let's list what benefits you get by organizing your leisure time with us:

  • Possibility to form a tourist route in Georgia as it suits you (excursions can be added or vice versa to make more free days);
  • Freedom when choosing hotels and hotels - moreover, no extra charge from booking companies;
  • You can go on a trip separately, or join a group;
  • A tourist can declare his budget for the trip, and the manager will prepare an optimal offer, taking into account all wishes;

Feel free to call or write to us, we will be happy to answer any of your questions and tell us about the amazing places of this country that are worthy of your attention.

Georgian Tour RPO certificate holder

In November 2021, Georgian Tour received an RPO certificate, confirming the high level of business reputation and responsibility of the company to clients. The Certificate of the Register of Verified Organizations is an indicator that the tour operator always fulfills its obligations to the customers of services and has no claims from those who have already contacted the company.

You can check the data on the website of the unified register by TIN or OGRNIP of the tour operator (332905654522 and 315334000000198, respectively).

Companies that have received the RPO certificate deserve the trust of the most demanding customers. After all, this document confirms the impeccable diligence and seriousness of the organization, aimed at providing quality services, for which you will want to apply again.

What does the RPO confirm?

When choosing a tour operator, you may encounter a large number of similar parameters of existing organizations. But not everyone has licenses and government documents.

Highly qualified personnel, well-functioning communication systems, appropriate infrastructure - a country claiming to be one of the most popular tourist destinations must meet all these points

In an exclusive interview with Sputnik Georgia, the former chairman of the Georgian Tourism Department, Maya Sidamonidze, said that the tourism industry in the country faces great challenges and they need to start working on them right now in order to achieve real results in a few years and avoid regression ...

According to her, the country has already passed the first stage of tourism development - it was associated with the liberalization of the visa regime and the open skies policy. The emergence of new direct flights and companies has made Georgia competitive.

In the regions of Racha, Imereti, Kakheti, Adjara, Svaneti, resorts are developing, roads are being built, signposts are being installed, information centers appear, as a result, local and foreign investors have a desire to start a business and build hotels, catering facilities or entertainment. However, with the increase in the influx of tourists, new challenges have emerged related to the quality of service, the lack of professional staff, and good infrastructure.

"Investors are hindered from investing even more money by such factors as bureaucratic procedures existing in the country. We say that it is easy to do business in our country, but we can register a company in one day. But there are problems, associated with the permission to start construction work, the acquisition or re-registration of land plots in the mayor's office or local governments. Many investors today are faced with this, "Sidamonidze told Sputnik.

The lack of communication infrastructure, sewerage, electricity, high-quality food in some of the country's tourist points also hinders the growth of the number of tourists.

"The solution of such problems is a very important precondition for the development of tourist infrastructure at the resorts. After all, we do not use even one fifth of our tourist potential," Sidamonidze emphasized.

Violation of the rights of tourists

Consumer rights of both tourists and citizens of Georgia should be regulated on the basis of contractual agreements, Sidamonidze said. In some cases, consumer rights are violated not only among tourists, but also among residents of Georgia who apply to travel agencies, spend money, but do not receive proper service.

"Civil law should work properly, and when you bring a claim to court, the case should not be considered for three to four years - many are simply tired of litigation. And in those cases when tourists, by the way, in Racha, instead of five laris, they are forced to pay one hundred laris just because he is a tourist - this is more a problem of conscientiousness, "Sidamonidze said.

The country needs to conduct permanent information campaigns to raise public awareness of the benefits that tourism and visiting guests bring. In no case should local residents create a bad image for the country and let tourists with bad experience go away from traveling in Georgia.

Snowy peaks and monuments of history and architecture are only a part of what Georgia has to offer tourists

Against the background of the depreciation of the national currency and the difficult economic situation in the country, tourism remains one of the most successful and dynamically developing spheres of the Georgian economy.

Three and a half years ago, Evgenia Stepanova, the owner of the Kiev company City Sightseeing, was going to expand her business and chose Georgia.

"Georgia was the first country that I paid attention to, because it is a hospitable country, there are no bureaucratic barriers to starting a business, a very pleasant climate for investors. In addition, tourism has developed here in all indicators and indices. and the country has a very good image at the international level, "says Evgenia.

Evgenia Stepanova believes that her company has great growth prospects in Georgia

She had to suspend the work of her company in Ukraine due to the decline in tourist flow, but in Georgia, the activities of the company developed. Tourists were offered, in addition to excursions in the capital, one-day tours to the regions and full travel packages. The launch of a product that is unique for Georgia - river cruises was also successful.

"The ship is our highlight. Compared with Berlin or Amsterdam, of course, in this direction we still need to grow to their level, but the fact that we have successfully launched such a product clearly shows that in the city there is a tourist flow, "she says.

The fact that the tourism sector in Georgia is growing rapidly is indicated not only by the offices of travel companies and souvenir shops that flooded the old part of the city, but also by official data.

Last year, more than six million foreigners visited Georgia for the first time, almost three million of them were tourists. These are the highest figures for the years of the existence of independent Georgia.

Open Borders

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