2020 August-September Analysis

How one hotel in Batumi made it through the pandemic and is now thriving

The Grand Gloria Hotel was one of the first hotels in Georgia to offer up its 160 rooms to help house Georgian citizens returning home during the pandemic on its seaside resort on Batumi’s New Boulevard. Investor.ge sat down with hotel director Murat Tansu to talk about the hotel’s experience of the pandemic, lessons learned and new developments in tourism to keep track of while looking forward.

Once past the quick thermoscan upon entering and the staff, decked out in gloves and face masks, July visitors to Batumi’s only resort-style waterfront hotel, the Grand Gloria, would have been hard pressed to remember that just several months ago, Georgia was sheltering in place and waiting out the coronavirus epidemic.

A number of other five-star hotels in Batumi tried reopening on June 15 – the date officially sanctioned by the Georgian government for domestic tourism to resume in the country – but shuttered again shortly thereafter;

For many hotels, the overall traffic to the shores is still not high enough to justify reopening. “But in these truly unprecedented conditions”, Grand Gloria Director Murat Tansu told Investor.ge, “creating demand where there is no demand has been key.”

How has the Grand Gloria Hotel made it through such trying times, and emerged an innovator in the new, quasi-post-COVID-19 tourism reality in Georgia?

A bold re-entry

Director of Gloria LLC, Murat Tansu

Before the green light was given to domestic tourism to resume in the country in mid-June, Grand Gloria called in its sales and marketing departments for a brainstorm, after which the hotel announced the beginning of a vacation package campaign with considerable discounts to encourage vacationers to come out to the shores of the Black Sea.

“This created a huge impact. We received thousands of e-mails and inquiries, and now we’re at well-over 90% occupancy, and looking at even better figures for the rest of the summer and into September. We’ve had so many requests we’ve had to put a pause to the campaign”, Tansu says.

The campaign largely fed off the pent up demand from the epidemic, but also the reality that hotels in Georgia will, for some time at least, have to cater more to local tourists. The idea was also inspired by Tansu’s experience of the hotel industry’s unique approach in Turkey.

“When you go to Antalya”, Tansu explains, “you don’t call the hotel – you call a travel agency, and you make a reservation, because they have attractive campaigns and payment conditions. Here, the tour agencies have been more focused on inbound tourism or Georgians going abroad, so they haven’t been offering these deals to Georgian vacationers. There was this niche to fill, and as you can see, it has worked out well for us.”

Tansu hopes the success of the Grand Gloria campaign will catalyze the development of a domestic tourism trend within Georgia itself, given that the global restrictions and concerns surrounding travel will likely force this hitherto largely ignored direction to become more important:

“Going forward now, the hotel sector will have to work much harder to fill rooms. And the only way to do that will be by offering new products, new initiatives and campaigns”, Tansu says.

Surviving lockdown

As for the active phase of the coronavirus pandemic in Georgia, a confluence of circumstances allowed Gloria LLC – which includes the Grand Gloria Hotel in Batumi, and the 5-star Tiflis Palace boutique hotel and Tiflis Veranda restaurant in Tbilisi – to survive and retain all its staff, which in total number more than 200 employees, despite the complete suspension of tourist flows.

Partial thanks, Tansu notes, is due to the government, which waived income and property tax and other burdens for the industry, helping many a hotel survive. Just as crucial was the decision of the government to place returnees coming back to Georgia in five-star hotels, where they had to wait out two weeks in isolation. The assistance received from the government allowed the Grand Gloria to both look after guests and retain a degree of operations.

This was a winter and spring unlike any other for the Grand Gloria, Tansu says: the hotel was at 100% ‘occupancy’ in its 160 rooms throughout March, April and May:

“We were happy to do it. Our only concern was that people would misunderstand what it meant for us to have served as a safe zone. The word quarantine has been somewhat misused here. These people weren’t sick. This was simply a practical move that had to be taken. We didn’t have a single person test positive during a stay with us”, Tansu says, noting that in Turkey, the hotels weren’t so lucky, and nor were the people returning home, who were settled in dorm rooms with up to six people.

“It’s not right to say that it was only us helping the government – they helped us too, they helped us cover costs, which allowed us to continue paying staff and paying for other operations.”

Staff were paid at a reduced rate for several months during the worst period of the shutdown, however the administration asked employees with open credit lines to come forward to make sure their liabilities would be covered during this period.

However, that’s not to say the pandemic was entirely smooth sailing.

The majority of issues were encountered and dealt with in the beginning, when the flurry of activity and the need to quickly mobilize resources meant some crucial support was missing, such as medical equipment:

“But everyone was waiting for help. And the government is made of people too, you know. They are human too. They did what they could”, Tansu says.

Staff were initially reticent as well about the idea of continuing to work during the pandemic.

“People were scared, yes. But luckily, they trusted me when I told them that if we were to follow proper protocol, there was little risk for us. And then they were happy to come in and do their part. I am truly blown away by how our staff performed during this time.”

Taking in the rays in a [somewhat] post-COVID-19 world

Now that Georgia has made it over the hump of the epidemic, there is much conjecture about what the future holds for the hotel industry at large. But what that might look like is as good as anyone’s guess, Tansu says, but offers up a few ideas.

First on the list of concerns is the upcoming winter. While the summer season has started out strong, Tansu has concerns about what the late fall and winter season may look like.

“We are likely facing a second wave of the virus at that point. The media will write and speak extensively about it, the government – rightfully so – will push people to become even more vigilant in their use of face masks and other social distancing measures. This does not encourage people to go out – it encourages them to stay in. This means hotels, restaurants could face a cash flow problem in the winter. That is more of a concern than the current situation with the slump in tourism.”

Tansu notes that though general economic life has resumed, people have been slow to flock back to restaurants, and traffic in Tbilisi hotels has been minimal.

“At this time, the Tiflis Veranda should be full, with reservations being made three to five days ahead in advance, because there has historically otherwise been huge demand on this establishment. The messages we see on TV do not inspire people to go out and be with their close ones. And almost nobody is travelling from the regions to Tbilisi, so the Tiflis Palace is also in a tight spot. This dynamic may only deteriorate in winter, given that few tourists from abroad will be coming in.”

However, there is plenty of room for optimism, especially about next summer, when pent up demand from people cooped up at home will produce a surge in demand for travel and tourism, and Batumi stands to benefit from what Tansu says could be a fantastic year. Of particular interest will be to watch how the domestic tourism market continues to grow:

“I had a few comments from my guests, a number of them have told me: ‘we used to go to Turkey, to Cyprus…but this year we came here, and we are so happy with our choice. We’ll come again next year!’ So many people will likely start to think this way, that they don’t have to go so far to have a nice beachside vacation.”

Beyond the coronavirus

The state of tourism in Adjara and Batumi beyond the coronavirus is clearer than the near future, Tansu says, noting it is of utmost importance for the industry across the country to develop an ongoing conversation between the hotels and the government.

“I’ve been here seven years, and we still don’t have a hotelier association. People have tried, but it hasn’t worked. It’s so important. During the pandemic, if we had had such an association, we could have solved a number of problems much easier. For example, the issue of the use of the word ‘quarantine’, which I, again, believe is mistaken, could have been discussed with the government and included the input of the hotel sector.”

Tansu has even been advocating for the government to take lead on the creation of a hotelier association and mandate that all other hotels in the country join, with an aim to ironing out several kinks in the industry such as the use of rating stars and the implementation of other industry standards.

Batumi in particular stands to benefit from coordination and discussion between the hotels.

“This city has great potential as a resort town, but there are many things that need to change. Take the boardwalk, for example. It is overrun with cheap beach cafes, and in certain places it looks rather tacky.

The boardwalk and beaches should be given into the hands of the hotels, who with their five-star management qualifications could really revitalize the place, and maybe even keep it open in the winter. When we came here in 2013, we were given assurances we would be able to rent the waterfront by our property. That has not happened yet. In fact, the tenders have been rather irregular and opaque. Moreover, they’re given out for just three years at a time. What kind of difference can you make in just three years? Make it 10, 15 – 20. We’d really be able to transform Batumi into something remarkable!”

The GNTA has done an incredible job of advertising Georgia abroad and raising awareness about the unique destination, Tansu says, but more work needs to be done inside the country to make sure that tourists are impressed and want to come back. Just what these needs are, Tansu says, the hotels know best, and the government would do well to set up a more active dialogue with players in the tourism industry.

“We know this business well. They could ask us: what do you want? What do you need? What can we do to make this happen? Instead, we see most of the energy focused on creating awareness about Georgia, which is fantastic, but it’s not doing much for us here on the ground. We need to raise the quality of what tourists come to see, otherwise we will not be able to grow or attract new markets.”

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