Investment Spotlight: Tskaltubo – Georgia’s next hot (spring) spot

Much like the rejuvenating qualities once touted at its many balneological resorts, Tskaltubo is too getting a fresh breath of life, according to government officials who unveiled major development plans for the former resort town in July.

The project, appropriately dubbed “New Life for Tskaltubo,” aims to restore the favored former Soviet sanatoriums into a modern spa resort destination. In July, the government announced that that town, which is located just seven kilometers outside of Kutaisi in Georgia’s western Imereti region, was expected to receive an estimated 500 million GEL ($170 million) in private investment as well as “tens of millions of GEL” from the government to make Tskaltubo “a modern, European-level, world-class spa resort” similar to the likes of Baden-Baden in Germany and Karlovy Vary in the Czech Republic.

In addition to the unveiling of the new development program in July, the government also announced the auction of 14 sanatoriums at an estimated value of 50 million GEL.

The first auction, which concluded its first round on August 4 with only two of the sanatoriums being purchased, follows the creation of a conceptual master plan commissioned by the Ministry of Regional Development and Infrastructure in late 2020.

Soon after the plan was unveiled in August 2021, Cushman & Wakefield, which conducted the feasibility and economic impact studies, estimated that the new investment could raise the per annum visitor numbers to the resort from the current 25,000 (2019) to more than 350,000 within the next decade. The government has also assessed that in addition to creating a room capacity of more than 6,000 beds, it also anticipates the development will create more than 3,200 local jobs.

While the project is still in its early stages, it represents an important opportunity for the tourism sector in the west of Georgia. With the Black Sea city of Batumi largely deserted outside of its peak tourism season, the revitalization of Tskaltubo and its year-round spa offerings could add to the growing number of ski resorts that will provide a much-needed boost to local economies in the offseason.

Sanatoriums steeped in Soviet history

While neglect since the 1990s has left much of its architecture crumbling, Tskaltubo once represented a major tourist attraction, which, at the height of its popularity, attracted more than 400,000 vacationers from around the Soviet Union on an annual basis. In 1931, a decree by the government of the Georgian Soviet Socialist Republic designated Tskaltubo as a premium spa resort and balneotherapy center. Built according to a series of master plans continuously modified and adapted between 1933 and 1983, Tskaltubo rose to prominence as a spa resort for the entire Soviet Union around 1955, reaching its peak popularity in the 1980s. Conforming to Stalin era urban planning and neoclassicist architectural designs, Tskaltubo’s 22 sanatoriums form a circle around a large park.