UNLV

An SWOT Comparison of the Kyiv and Tbilisi Hotel Development Markets

In the early 1990s, Eastern European countries opened up to the world as a new travel destination. Countries such as Poland, Estonia, and Latvia quickly became destination areas for many travelers and the hotel market experienced rapid growth. That growth has continued to move east, to countries such as Ukraine and Georgia, in particular the capital cities of Kyiv and Ukraine. There are clearly disparities between the hotel growths in these two cities, however. This professional paper will clearly outline these differences and identify the strengths, weaknesses, opportunities, and threats (SWOT) of each hotel market with the intention of identifying how the two markets can adapt to the challenges ahead.
Kyiv has experienced limited hotel growth within the past seventeen years since independence. Currently, there are only two western chain hotel properties with a third in construction. Additionally, there are limited properties that meet the standards of western business travelers. These properties are all charting very high occupancy rates, as the demand is constantly increasing. Hotel rates have risen by well over 50 percent within the last year. The expansion of Kyiv�s hotel market has been a priority of virtually all international hotel chains for several years; however, certain challenges have made such growth virtually impossible. The first goal of this paper will be to identify the roadblocks to future growth of the Kyiv hotel market.
Tbilisi, conversely, is experiencing rapid growth, boasting three western chain properties, currently, and another four in construction in a city one-third the population of Kyiv. The political instability of Tbilisi is certain to influence the sustainability of these properties, as will the increased competition when all of the properties open. For a city of only one million, seven large chain hotels in addition to a plethora of boutique style hotels, many prove to be too many. Therefore, a second focus of the paper will be to determine the sustainability of the Tbilisi hotel market.
The two markets are similar, but appear to have converse problems, growth in Kyiv and sustainability in Tbilisi. As Kyiv is hosting EURO 2012, a major sporting event, it is imperative that the hotel market open up within the next three years. Identifying the methods used by Tbilisi to increase their hotel market may serve to assist Kyiv with this goal. Kyiv, however, has experienced unprecedented growth of business and leisure travelers, ensuring that hotel occupancy rates at western style hotels remain consistently high. Conducting a thorough SWOT analysis to compare and contrast the two hotel markets will provide insight into the lessons that each market can apply to meet their respective challenges.