Batumi has become an attractive spot not just for tourists but also for investors. With an increasing number of residential projects marketed as investment properties, the concept seems simple: purchase an apartment, rent it out to tourists, and earn passive income. But how effective is this strategy? Where do attractive promises end and real financial returns begin?

Growing Supply – and Increasing Competition

According to Galt & Taggart, 10,895 apartments were sold in Batumi in the first three quarters of 2024, with 6,100 purchased directly from developers - and these are just the officially registered transactions.

That's not all. Based on data from the Korter.ge platform, 175 new residential complexes are set to be completed in Batumi between 2025 and 2027, many of which are marketed as investment properties. With an official population of 169,095 residents and a tourist traffic of around 3 million, that’s quite a lot.

The competition in the tourism real estate market is rapidly growing so choosing the right investment property has never been more crucial.

Investment Attractiveness: More Than Just Location and an extensive infrastructure

Developers often highlight location, infrastructure, and finishing level, but few provide the exact numbers of - return on investment, realistic occupancy rates, and financial planning. Yet, these are the foundations of what truly defines investment attractiveness.

Key indicators for investors include:

• ROI (Return on Investment) – A straightforward metric that calculates the return on invested capital by comparing net profit to the initial investment. It's simple and easy to grasp, making it a great starting point.
• IRR (Internal Rate of Return) – A more advanced metric that factors in all future cash flows, including their timing. IRR provides a full picture of investment efficiency over several years.

When looking at advertisements for investment properties in Batumi, most projects promise an ROI of 12-16%. However, the real question isn’t just about the promised returns - it’s how accurately they are calculated and whether they are truly achievable.

To make realistic predictions, two key parameters of the hospitality industry should be considered:

• ADR (Average Daily Rate) – the average price per night.
• Occupancy Rate – the average occupancy level of rooms.

These figures should be based on market analytics and verified statistics for Batumi.

Hotel or Apartments: What Do the Numbers Say?

Investment properties in Batumi can generally be divided into two main categories: hotels and apartments (aparthotels).

According to STR Global, branded hotels in Batumi recorded the following figures in 2023:

• ADR (Average Daily Rate): $112.85
• Occupancy Rate: 66%

According to STR Global, Batumi has 5.97 beds in branded 5-star hotels per 1,000 visitors, while the global average for similar cities is 15. This highlights deficiency.

For comparison, Airbnb data shows remarkably lower figures for apartments and aparthotels in Batumi:

• ADR: Just $51
• Occupancy Rate: 45%

Not All Tourist Properties Generate the Same Income. The difference is nearly twofold, highlighting a crucial point: not all investment properties deliver the same returns.

ROI and IRR can’t be stable in a Dynamic Market

It’s important to remember: the closer a property is to completion, the higher its price - this is a global trend. If a developer guarantees a stable ROI or IRR throughout the entire construction process, this is something to think about. Either the project lacks demand and prices aren’t rising, or the calculations are rough estimated without solid analysis.

Our Approach: Calculations Before Market Entry

At Pontus, before introducing the Pontus Rotana Resort & Spa project to the market, a different approach was taken. A market analysis of tourism and investments in Batumi was carried out, along with financial modeling, by the international consulting firm Cushman & Wakefield - one of the most respected names in the real estate industry.

Pontus’ goal is not just to construct a building but to create a profitable investment product.

The company is confident that in the face of growing competition in the Batumi real estate market, only projects that genuinely generate income will succeed. This means that product quality, the depth of financial analysis, and transparency will become the new standard.

Pontus Rotana Resort & Spa: An Investment Driven by Data, Not Promises

Pontus Rotana Resort & Spa is Georgia's first hotel managed by the international operator Rotana Hotels. This 5-star resort is located in the coastal area of Gonio, just 15 minutes from Batumi’s city center.

The project is developed by the private investment fund Pontus Capital, with no external bank financing. Every phase, from market analysis to marketing is based on real market data.

Key project advantages:

• Fully managed by Rotana – This is not a franchise. Rotana will handle all operations, ensuring high service levels and stable occupancy rates.
• Revenue Sharing model – Investors receive income based on their share of the entire hotel’s rooms revenue, rather than the occupancy of a specific room.
• Suitable for both long-term and short-term investments - as the company allows resale before the construction is completed and prices are regularly increasing every quarter the project is attractive for any type of investors.
• Transparency and control – Pontus doesn’t just build; It stays involved as partners in the project, supporting investors at every stage.

Pontus started sales in September 2023, and at that time, the projected ROI was 14.3% (based on Cushman & Wakefield data). Since then, the company has had four price increases and the current ROI stands at 12.2%, which is still a high and well-supported figure.

There is no promised "up to 15% annually", instead, clear insights are provided into how the numbers are derived and why they are achievable. In today’s market, real profitability, trust, and international management standards are the most important factors for investors.

For more information, visit official website: Pontus.ge

(Ad)