Hotel Room Investments - Unlocking Financial Potential There are some key considerations to make when selecting a suitable investment

Georgia has seen an unprecedented interest in the landscape of investment opportunities in recent years. While diversification is key to maximizing returns, and various options are available on the market, one in particular is gaining traction: Investing in hotel rooms. The hospitality sector is thriving in Georgia, and investing in hotel rooms can give precisely what every investor wants: Peace of mind and a stream of passive income. But what exactly does investing in hotel rooms entail, and how can one find or choose the right one?

Investing in a hotel room is based on a relatively simple principle: An investor acquires a room or rooms in a hotel complex, and then the hotel administration manages the property, while the investor receives an income from renting out their room(s) in proportion to their investment.

There are some key considerations to make when selecting a suitable investment.

To maximize profit from renting out a hotel room, one must look for financial indicators based on research: The investment project should be evaluated by an independent research organization. Once the project is given the green light, the location of the project should be reviewed- an essential component to consider, as continuous demand for rental ensures high occupancy throughout the year and thus provides a reliable cash flow stream. Naturally, higher rental prices translate into higher income for investors.

Further selection criteria will provide the necessary insights:

• Management company: Preferably, the project should be managed by an international brand. Such brands have an extensive client base, vast opportunities for attracting tourists, and extensive experience, all of which minimize the potential risks.
• Conclusion of a contract with the management company at the construction stage: This is important, since the brand always has its own standards, and the construction of the project must comply with these standards to ensure a high level of service in the future.
• Infrastructure: The availability of necessary amenities both in and out of season (for example, open and closed pools and casinos) will attract guests year-round.
• Location: Beachfront is usually the more popular choice, and allows you to rent rooms at higher prices.
• Investment justification: It is crucial to evaluate the potential profitability of the investment by transparently estimating its investment appeal, backed by external research or the developer's past ventures. Metrics like return on investment (ROI), internal rate of return (IRR), yearly payback, average yearly pricing, and predicted occupancy rates should be provided promptly. A lack of such data could signify risks and a limited grasp of the project execution process.

Mitigating Risks: External and Internal Factors

While the prospect of a hotel room investment is already exciting in itself, prudent investors must also be aware of potential risks and factors such as economic stability, tourism trends, and the developer's track record.

The country's economic and political stability is the primary external factor affecting any kind of investment. The government must reassure investors of security and a certain degree of predictability. A peaceful environment in the region attracts more tourists and creates favorable conditions for investment. A perfect example is the hospitality industry in Georgia, which has seen constant growth over the past few years, and which has a promising outlook. The demand for real estate in touristy areas has grown considerably, and the rental prices have doubled, making hotel rooms a very lucrative investment.

Besides the external factors, due diligence is obviously to be done about the construction developer and their credibility. A good starting point is a portfolio of completed projects. The developer's previous experience and success in implementing similar projects would indicate reliability, quality, and sound reputation while Financing the construction with company funds and obtaining the required legal permits and land ownership ensures an uninterrupted build and legal protection with minimal risk to the investor.

Differences between hotel rooms and other types of investment property

On the market, rooms within apart-hotels or branded residences are frequently viewed as akin to hotel accommodation, yet notable distinctions exist.

Hotel guests anticipate a specific standard of service, suitable infrastructure, and comfortable amenities. For instance, most modern 5-star hotels do not have air conditioning systems installed in individual rooms because air conditioners can create excessive noise and fail to provide a constant, comfortable temperature. Instead, modern hotels use a centralized heating, air conditioning, and ventilation system that ensures the right temperatures, humidity, and air quality all year round.

Standard hotel rooms also lack kitchen amenities, even though a kitchen can appeal to guests who are on a lower budget who prefer to save on in-room meals. For the comfort and luxury of hotel guests, however, hotel restaurants and room service can accommodate any gourmand.

With 5-star hotel infrastructure, one can expect all the perks that come with it, such as room service, restaurants, spas, and other amenities, available all year round, regardless of the season.

Hotel construction usually requires significant costs, including additional expenses for soundproofing, energy efficiency, etc. Hotels that follow high construction standards are more efficient and sustainable in the long run. When these conditions are met, a high level of service can be guaranteed, which, in turn, increases the hotel's rating, occupancy rate, and average spending per guest.

Pontus Rotana Resort & Spa in Gonio is truly a unique investment opportunity in the Batumi, Black Sea real estate market.

Pontus Rotana, Georgia's first 5-star hotel managed by the Rotana Hotel Management Corporation, is well known in the hospitality sector in the UAE. Although this is the first significant investment in Georgia for Pontus Rotana, it represents a goldmine for savvy investors.

A unique hotel complex consisting of more than 500 rooms is located on the beachfront in Gonio, Batumi, and is scheduled to open in 2027. With more than 700,000 active customers, mainly from the Gulf countries, Rotana promises not only stylish rooms and high-quality service, but also a first-class casino, a first for the Rotana portfolio. All the above will ensure high occupancy, even during the off-season.

The hotel infrastructure includes world-class amenities. With over 700 square meters of outdoor and indoor swimming pools, spa, restaurants, and bars, including a rooftop bar, business lounge, and children's area, Pontus Rotana Resort will be a rare gem on the Black Sea coastline.

The Pontus Rotana Resort & Spa - Gonio project goes beyond the standard offers in the Batumi market, which mainly comprises apartments and apart-hotels. This exclusive 5-star hotel complex represents a luxurious and stable investment opportunity that will elevate the attractiveness and prestige of the region and let investors unlock untapped potential. Pontus Rotana promises not just accommodation, but an unparalleled hospitality experience.

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