Rcheuli is Georgia’s first multi-city hotel chain geared to meeting international standards for service and comfort. It was the first company to develop a hotel chain outside of Tbilisi, addressing the lack of three star accommodations. In order to increase international exposure and build occupancy, Rcheuli has participated in tourism exhibitions held annually in Georgia and negotiated sales leads with various local and international tour agencies. “Rcheuli” can be translated roughly into English as “Chosen,” and the hotel chain’s concept is to offer international standards of comfort and service with local Georgian elements of style and ambiance.

The Need

The accommodation industry in Georgia is currently dominated by smaller hotels lacking professional management and offering exceedingly low standards in appearance and service. Rcheuli is working diligently to increase international and domestic tourism in Georgia, an industry that thrived in the country prior to the 2008 Russian invasion. In order to do so, the company needed financing to develop three hotels in new locations.

The Investment

In 2008, Rcheuli approached SEAF’s Georgia Regional Development Fund (GRDF) for financing. In May of the same year, GRDF provided Rcheuli with a combination equity and debt investment that yielded SEAF a 10% stake in the company. From that point forward, SEAF has been actively involved in Rcheuli’s growth, helping the company meet international hotel design and service standards. In addition, SEAF has assisted the company in hiring a professional manager with extensive international tourism experience in order to help the company better position itself for foreign clientele.

The Impact

As hotels are the first building block of the tourism industry in Georgia, the dynamic market effect of Rcheuli’s expansion on other tourism services is noteworthy. Between 2007 and 2009, Rcheuli expanded from 25 employees and 855 hotel guests to 72 employees and 5000 hotel guests. In addition, over the same time frame, the number of employees that received internal training in hotel and restaurant services tripled, providing these workers with transferable skills that increase their value in the workforce.

Furthermore, Rcheuli locally sources the hotel construction services, restaurant food and supplies, and other goods and services for the chain, which provides local developmental returns.

Mamuka Borduli, partner and managing director of Adventure Club Jomardi, a Georgian tour company, stated, “Thanks to Rcheuli’s establishment of an attractive, comfortable hotel in Kutaisi, we are having significantly more success with our tours there – a key destination for rafting and cultural tourism. Until the Rcheuli hotel in Kutaisi opened in September, there were no comfortable accommodations for our customers. Now with the Rcheuli hotel, our customers are happier and more satisfied. A large portion of our groups come from Israel, and because of their improved satisfaction, we believe we will begin to see an increase in the number of tourists visiting from that country and others.”