Effective Governance and Policy Instruments Integrated, Planning and Investment Incentives, Infrastructure Development and Public Private

Partnerships in Management

Aleksandre Onoprishvili

Mountain Resorts Development Company

LTD "Mountain Resorts Development Company" is a subordinated entity of the Ministry of Economy and Sustainable Development of Georgia.

Company runs 4 Caucasian resorts:

Gudauri – North-East Georgia

Elevation info 2000 m – 3275 m

Slopes 57 km

Ski lifts 7

Bakuriani - South-East Georgia

Elevation info 1740 m – 2700 m

Slopes 22 km

Ski lifts 4

Goderdzi – South-West Georgia

Elevation info 1700 m – 2390 m

Slopes 8 km

Ski lifts 2

Mestia - North-West Georgia

Hatsvali 1865 m – 2347 m

Tetnuldi 1700 m – 3200 m

Slopes 32 km

Population in the Area

Implemented Projects • Mountain and Village Master Plan for Gudauri was elaborated by the Canadian

Company Ecosign Mountain Resorts Planners.

• 10 place Gondola lift and platter lift was constructed in Gudauri in 2011 by the ski lifts manufacturer company Poma;

• Installation of new ski lifts in Gudauri was followed by the development of new investment area;

• New ski destination “Goderdzi” was created with chairlift and Gondola lift in 2012 by the ski lift producer company Doppelmayr;

• 6 ski lifts are in the process of construction in Mestia by Poma and Leitner;

• Snowmaking system was installed in Gudauri and Bakuriani by the company Demaclenko.

• Bike park and trails by Alliance;

• Tubbing zone by SunKid;

• Kids Parks;

• Alpine Coaster by Tatralift a.s.;

• Snow Park;

• Night skiing;

• Cinema “Didveli”.

Implemented Projects

• Contactless checkpoints by SKIDATA AG;

• Joint ski ticket system;

• Electronic information monitors;

• Mobile App.

Implemented Projects

Economic Overview

According to “DOING BUSINESS” reports Georgia is a number one in Eastern Europe and Central Asia in Doing Business. Notable reforms in business sector have spurred economic development in recent years and positioned the country to rank of #1 reformer in terms of “Ease of doing business” by the World Bank. Georgia holds 50st place out of 175 countries according to the Transparency International’s Corruption Perceptions Index for 2014.

“DOING BUSINESS” RANKINGS

Topic Rankings Georgia’s Ranking 2015

Doing Business 15

Starting a Business 5

Dealing with Construction Permits

3

Registering Property 1

Getting Electricity 37

Getting Credit 7

Protecting Investors 43

Paying Taxes 38

Economic Overview and Investment Environment

Georgia has registered improvements in five of the economic freedoms, including: - freedom from corruption; - investment freedom; - business freedom; - the control of government

spending; - monetary freedom.

Achieving its highest score ever in the 2015 Index, Georgia has advanced further into the category of “mostly free.”

Georgia is ranked 11th out of 43 countries in the Europe region, and its score is well above the regional average.

Investment Environment

The Government of Georgia has worked out a frameworks towards the development of mountain resorts in Georgia. The measures and actions include:

• Development of new investment territories;

• Support local and foreign investors with communication infrastructure (electricity, roads etc.);

• Elaboration of General Development Plan of the resorts

Adoption of a Law on the Development of Mountainous Regions on 31st of July 2015:

• New legislations provides important and substantial business, economic and social benefits, together with a guarantee of annual funds from the national budget reserved for mountain development;

• The benefits described in the new Law include: tax exemptions for selected companies operating in the mountainous areas; more opportunities and support will be available for infrastructure and business development in the highlands.

The role of state and the actions of the government of Georgia in the development of mountain tourism and ski destinations

Public-Private Partnership Projects

Public Private Partnership (PPP) represents one of the administrative measures which increases the efficiency of the development of mountain-ski destinations.

PPP created positive conditions and fostered investment in Georgia’s ski and accommodation infrastructure.

Thanks to public-private cooperation Kokhta and Mitarbi area will be fully developed for 2017 year. Within the framework of PPP:

• Government invests in the construction and operation of 3 ski lifts and trails;

• Government provides investor with necessary communication infrastructure;

• The Georgian company GRDC invests 70 million in the construction of accommodation;

• Additional 800 beds will be created by the private company.

The role of Public-Private Partnership in developing ski resorts and other destinations

Public-Private Partnership Projects

The role of Public-Private Partnership in developing ski resorts and other destinations

Within the framework of PPP additional accommodation facilities will be constructed by other private companies – ORBI, REDCO, MGZAVREBI.

Marketing Conditions and Tourist Overview

Georgian tourist destinations have booming number of both local and regional visitors (mostly eastern Europe) . As an example one of the most popular ski resorts Gudauri located in north east of Georgian has visitors from Central and Eastern European countries such as Russia, Ukraine, Belarus, Poland and others.

The statistic data shows growth number of visitors.

61268

82905

59770

117171

0 50000 100000 150000

2011-2012

2012-2013

2013-2014

2014-2015

Number of Visitors Gudauri

[VALUE]

2,822,363

4,428,221

5,392,303 5,515,559

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2010 2011 2012 2013 2014

International Visitors Inflow Georgia

2010 2011 2012 2013 2014

Source: GNTA 2015 Source: Skidata 2015

Growth of Hotel Number

5%

30%

55%

80%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2012 2013 2014 2015

Growth of Gudauri Accommodation Properties

As a consequence of the growth of demand and infrastructure investment by the government, real estate market has grown considerably compared to 2011.

Most Affordable Price in the Region

13.00 € 22.00 € 23.00 € 24.00 €

40.00 €

0.00 €

5.00 €

10.00 €

15.00 €

20.00 €

25.00 €

30.00 €

35.00 €

40.00 €

45.00 €

Gudauri Tsakhadzor(ARM)

KrasnayaPolyana (RUS)

Bukovel (UKR) Roza Khutor(RUS)

One Day Ski Pass Prices

As a result of the government initiatives and investments, Georgian ski resorts managed to keep affordable pricing

Future Development Plans

Infrastructural Projects:

• Connecting Gudauri-Kobi and creating joint ski area;

• Installation of additional ski lifts and creating new ski runs;

• Artificial water reservoir for snow making;

• Installation of snow making system;

• Building ice rink for curling and hockey;

• Construction of biathlon park

Marketing Projects:

• Participation in international ski expos;

• Placing promotional articles in international and onboard magazines;

• Uniting all ski Georgian ski resorts in one ticketing system

3rd Euro-Asian Mountain Resorts Conference

Georgia to Host Third Euro-Asian Ski resorts Conference in 2017

Thank you for your attention!