Investment Opportunities in Tourist Accommodation Facilities: A Case Study for Batumi

The tourism industry has traditionally been the leading sector of the economy of the Georgian Black Sea resort of Batumi for many decades and is currently experiencing rapid growth. This trend is accompanied by an increase in investment activities and the constructions of rental accommodations. Developers are focusing on promoting their rooms and apartments, positioning them as a source of long-term rental income, while potential private (mostly non-professional) buyers are facing difficulties in making grounded investment decisions. The purpose of this study is to identify a number of key indicators that determine a reasonable return on investments in Batumi tourist facilities. After empirical research on a wide range of variables relevant to making investment decisions in this market, key representative indicators were identified and a research design were developed to explore local investment opportunities. Classifying investment proposals into 4 categories depending on their size, the applied methodology determines frames of profitable investment opportunities for each category. The research design can be applied to other similar destinations as well, by adjusting the indicators to the specifics of the relevant investment markets. Keywords: Tourism, investment, rental accommodations, returns on investment, Batumi JEL Codes: E22, H54, L83, R42