ENTERTAINMENT MARKET REPORT | GEORGIA | 2015 Contents Executive Summary 3 Georgia - Country Profile 5 Gudauri Entertainment Market Overview Casinos 8 Cinemas 10 Amusement parks, Zoo and Other Destinations 11 Leisure Market Overview Gastronomy and Wine 13 Wellness 16 Active Leisure 17 Culture Market Overview Museums Sector Overview 20 Stadiums & Arenas 21 Theatres & Concert Halls 23 Conclusion & Outlook 24 Appendix 1 – Real Estate Registration, Construction Permit and Incentives 25 Appendix 2 - Primary Information Sources and Data Used for The Study 27 Disclaimer 29 Project Team 30 Colliers Global Stats at a Glance 31 Team Georgia at a Glance 32 2 Entertainment Market Report | Georgia | 2015 Executive Summary Georgia’s entertainment industry provides a rich diversity of remained relatively low, though new cinemas, including the six- options, with the majority of activities falling into the screen theatre in Kutaisi scheduled to open this year, are now in the entertainment, leisure or cultural categories. Most of these activities pipeline. are located in Tbilisi and Batumi, followed by Kutaisi, with other regions across the country also offering numerous attractions and Gastronomy and the wine industry have always been significant activity options. parts of Georgia’s unique culture and Georgian dishes are considered by many to be some of the most delicious in the world. Tourism is one of the country’s most promising sectors for growth. The turnover of cafes and restaurants reached its highest point in Given Georgia’s rich and unique historical heritage, natural 2015, at GEL 571 mln, and it is believed that the sector is nowhere environmental beauty, world-class and award-winning wine and near its full potential. cuisine, and with a wide array of recreational offerings on hand, the annual number of tourists is rising. Georgian wine, made following the unique Kvevri process, a UNESCO-nominated “Intangible Cultural Heritage of Humanity” The Georgian government believes that development of individual technique, is celebrated worldwide by wine aficionados. More than industries, like gaming, sports and cultural tourism, directly 143 thousand tons of grapes were produced in Georgia in 2015, correlates with an increase in foreign investment. In light of this, feeding both a growing wine export industry and wine-focused they’re working to make Georgia a hotspot for various international tourism within the country. Providing a unique experience, several events. high-class chateaux and “wine destinations”, such as wine cellars and shops, have recently begun operations. The Kakheti region, The turnover of gambling, sport and culture-related industries King David Residence famous for its cultural wine heritage, is the country’s main amounted to 4% of the country’s total turnover in 2015. destination for wine tourism. Supported with privileged tax liabilities, the gaming sector has been Mtatsminda Park is Tbilisi’s biggest amusement park, while one of the fastest growing industries in the entertainment market Tsitstinatela Park in western Georgia is the sector’s main facility. since 2009. Large-scale local and international operators provide Other important recreational destinations include the Tbilisi Zoo modern facilities for various games in Tbilisi and Batumi. Several and Mziuri Park. The 2015 flood destroyed facilities in Tbilisi’s international events, such as the World Series of Poker, have taken central district and ruined the infrastructure of these two parks. place in Georgia, establishing the country’s reputation as a gaming Both destinations were quick to repair damages and reopen, and hot spot with gamblers around the world. today they are each working on expansions that will make them Various profile and theme museums, theaters and concert halls even more engaging. Georgia’s Botanical Garden is also a popular around the country provide a wide assortment of wonderful venues recreational destination, while large scale infrastructural works are in which to enjoy Georgia’s arts and explore its cultural heritage. underway in a number of Georgian squares and parks, including the The number of visitors for both museums and theaters has risen beautiful Lisi Lake in Tbilisi. steadily during the last decade. While a majority of the country’s The idea of “healthy living” is gaining popularity, which has led to an most significant museums are located in the capital, one can find increase in the number of fitness centers and swimming pools. museums across Georgia, often regionally-themed and specific to Several international fitness operators, such as Aspria and Snap, the area in which they’re located. have successfully entered the Georgian market, expanding their 2015 was a significant year for Georgia’s arts scene. Tbilisi’s chains in Tbilisi and Batumi. beautiful opera house was fully renovated after six years of work to A number of active leisure options, from night clubs to extreme restore it to its former glory. Various concerts and festivals featuring sport facilities, can also be found in Georgia. Winter sports draw both local and international talent were held across Georgia and a both locals and tourists to several resorts, including three new number of large scale performances are still in the pipeline. The facilities located in Hatsvali, Tetnuldi and Goderdzi. The country’s Black Sea Concert Hall – a newly constructed ultra-modern facility most popular winter destinations remain the Gudauri and in resort Shekvetili on the shores of The Black Sea- is Georgia’s Bakurkiani Resorts. These beautiful spots offer visitors an exciting latest 10,000-seat venue providing visitors with world-class shows array of snow-based activities in their completely renovated and concerts. facilities, while their artificial snow machines ensure the longest ski The cinema sector experienced a sharp increase in facilities in 2015 season in Georgia . Bakuriani is also frequently visited during as Georgia's two largest cinemas (with a total of 15 screens, summer for walking, hiking and other similar activities. including an IMAX hall) were introduced in Tbilisi to the market by Cavea Cinemas. The number of movie theatres beyond Tbilisi has 3 Entertainment Market Report | Georgia | 2015 Entertainment Map of Georgia MESTIA ANAKLIA King David Residence GUDAURI KUTAISI POTI TELAVI BAKURIANI TBILISI KVARELI BATUMI LEGEND Airport Amusement Park Ski Resort Theatre and Wine Region Cinema Museum Stadium and Sport Golf Club Complex Casino Aqua Park Fitness Source: Colliers International 4 Entertainment Market Report | Georgia | 2015 Georgia – Country Profile Gudauri Introduction 14.8% average seen last decade. It is worth noting that a large percentage Located at the crossroads of Europe and Asia, the country of Georgia of employed population are self-employed. Currently, 15.4% of the borders Turkey, Armenia, Azerbaijan and Russia. Georgia occupies an area working population are employed by Public sector, while 84.6% work in the of 69,700 square kilometres and is home to a population of 3.7 million non-public sector. In 2015, the three industrial sectors that employed the people. The country’s land borders run a length of 1,839 kilometres, while largest share of people were wholesale and retail trade, industry, and Black Sea coastline is 315 kilometres. There are two autonomous republics construction. and 71 municipalities (including 12 self-governing cities) in Georgia. Since emerging from the Soviet Union as an independent country in 1991, Economy Georgia has implemented large-scale reforms, leading to the country’s Focused on improving efficiency and overcoming expected difficulties, political and economic transformation. These changes have made clear the Georgia’s economy is structured to improve efficiency and overcome country’s choice to strengthen democracy and further their relationship difficulties, thus allowing the private sector to maintain inclusive growth. with the EU. The process of economic liberalization, backed by evident pro-Western Georgia has made business development within the country a top priority, leanings, has greatly improved the country’s competiveness for both through encouraging entrepreneurship and devising methods to attract export and investment opportunities. Georgia’s main trade partners include private investments to shifting tax incentives and making the country more Turkey, Russia, Azerbaijan, and China. attractive to the international business world. With its unique cultural Following institutional reforms designed to encourage and support heritage, highly diverse nature, and exuberant hospitality, Georgia’s entrepreneurship initiatives, Georgia’s economy has taken a giant leap tourism industry continues to grow and thrive, further bolstering economic forward in attracting new business. Over the past decade, the per capita growth. GDP increased by 2.45 times from $1,530 in 2005 to $3,743 in 2015 (at current prices). The estimated real GDP average growth equaled 2.3% for Government Q1 2016 and is forecasted to reach 3% by the end of the year. The ‘Ongoing The Georgian government shifted from a presidential to a parliamentary Country Partnership Strategy for Georgia’, developed through a republic after the October 2012 parliamentary elections. The president, collaborative effort by the World Bank Group, has further evolved to Giorgi Margvelashvili, is the head of state and supreme commander-in- ensure the effective use of public resources and increase income chief. Georgia’s parliament is located in Kutaisi City and acts