By 2012, Capitol Real Estate’s investment portfolio included a 250 sq.m. land plot located in the center of Kutaisi, which came with a government mandate to develop a hotel on the site. Capitol Management decided to utilize this asset and enter the hospitality sector. In the initial phase, the company thoroughly researched which hotel brands were operating in Georgia and what types of hotels would be feasible to develop. To plan the optimal concept and to create a strategic plan for growth in the hospitality sector, Capitol Management commissioned a nationwide study by Cushman & Wakefield. The study analyzed the existing demand, development prospects, and potential within Georgia’s tourism and hospitality industries. The study revealed the necessity for international branding and compliance with global standards, as well as key locations for hotel development, Kutaisi being one of them.

At the time, there was a shortage of hotels in Georgia's regions. In response, Capitol Real Estate developed a plan focused on fostering tourism not only in major cities like Batumi and Tbilisi but also in the regions. A key challenge was that international hotel brands operating in Georgia generally refused to franchise properties with fewer than 100 rooms. Additionally, they required strict adherence to high standards, making it difficult to align such projects with Georgia's market investment scale. In Kutaisi, Capitol Management faced two specific challenges: securing an international brand willing to work with a 45-room hotel, and finding a suitable hotel management company.

In response to the existing challenges, Capitol Management initiated negotiations with the globally renowned hotel chain BWH℠ Hotels to secure representation of one of its brands. Given the rapid pace of economic development in Georgia, the company successfully sparked Best Western's interest in the country’s growing tourism potential. As a result, an agreement was reached and the first partnership contract was signed, granting official representation of the Best Western brand in Georgia.

Simultaneously, negotiations began with residents living adjacent to the land plot. These discussions were successfully concluded, allowing for the expansion of the property to approximately 600 sq m. This made it possible to proceed with the development of a 45-room hotel.

During the project planning phase, Capitol Management conducted a market study to identify the hotel’s target customer segments. The research highlighted two main groups: leisure tourists visiting Kutaisi to explore its landmarks and relax, and business travelers who typically arrived in the city in the morning and departed after completing their engagements. The team tailored the hotel’s concept to meet the specific needs of these two segments, and the marketing strategy was developed accordingly.

Best Western Kutaisi officially opened in April 2017 in a vibrant and picturesque location near the White Bridge. The building features a distinctive design, combining a modern exterior with traditional interior elements that preserve its historical charm. It is the first hotel in Georgia to carry the Best Western brand name.

Project Implementation
Throughout the implementation of the project, the Capitol Management team achieved several key milestones:
• Capitol Management initiated negotiations with the globally recognized network BWH℠ Hotels to bring one of its brands to Georgia;
• The land plot was located in the historical center of Kutaisi, within a 50-meter protected cultural heritage zone and adjacent to buildings with official heritage status. At the same time, the government was undertaking large-scale rehabilitation works in Kutaisi. To meet the strict requirements for preserving the city’s architectural identity, adapting to stylistic nuances, and obtaining project approval from the Kutaisi municipality, local architects were engaged in the hotel’s design process.
• The project’s development was entrusted to Simetria, a member company of Capitol Management;
• During the implementation phase, the team signed a co-financing agreement with the Partnership Fund for 50% of the project’s budget. A private partner company was also involved as a co-investor, and together they successfully completed the project.
• Capitol Management later refinanced the Partnership Fund's investment through a credit facility provided by TBC Bank.

Awards

Since the beginning of its operations, the 3-star Best Western Kutaisi has received numerous awards, including:

● „Loved by Guests Award” winner by Hotels.com – 2021;
● „Traveler Review Awards” by Booking.com – 2021;
● „Standard Accommodation Award” finalist by Welcome to Georgia Awards – 2020;
● „Traveler Review Awards” by Booking.com – 2020;
● „Quality & Service Award” by Best Western Hotels & Resorts – 2019;
● „Standard Accommodation Award” finalist by Welcome to Georgia Awards – 2019;
● „Certificate of Excellence” by TripAdvisor – 2018;
● „Traveler Review Awards” by Booking.com – 2018;
● „The Best Value - Standard Accommodation Award” finalist by Welcome to Georgia Awards – 2018;
● Welcome to Georgia! National Tourism Awards 2017, organized by Bank of Georgia and the National Tourism Administration — Winner in the category: "Fastest Growing Company of the Year" in the Small and Medium Business Segment;
● International Hospitality Awards – 2019 Finalist, Best Business Hotel;
● International Hospitality Awards – 2020 Finalist, Best Small City Hotel.

 
Project Outcomes
The hotel was managed by Hotel Collection International Georgia, a company jointly established in Georgia by Capitol Management and the internationally recognized Spanish multi-brand hotel management company Hotel Collection International. Thanks to effective management, the hotel consistently delivered a return on investment that exceeded the total capital invested each year.

Following the pandemic, Capitol Real Estate’s portfolio strategy shifted, and the team deemed it appropriate to sell its 50% ownership stake in Best Western Kutaisi to the existing partner. The transaction was finalized in May 2023, and hotel operations were subsequently handed over to a new management team.

Expected Outcomes During Project Planning
• Guest satisfaction index: 87.7%, with particularly high ratings for service quality— 87.9% and cleanliness — 87.7%;
• Internal Rate of Return on Equity (IRR Equity - monthly based) — 13.6%;
• Internal Rate of Return on Project (IRR Project ) — 12.4%;
• Return on Investment (ROI) — 135%.