Airbnb’s Influence on Tbilisi’s Real Estate Market: Transformations Driven by Tourism

Over the past years, Airbnb, founded in 2008 in San Francisco, has significantly reshaped the global tourism industry. The platform’s business model is relatively straightforward: it allows property owners to temporarily rent out their homes or rooms to tourists, offering travelers a more affordable and authentic experience compared to traditional hotels. Airbnb generates its revenue primarily through commissions charged to hosts and guests for each booking. This model has fundamentally changed tourism globally, and today Airbnb operates in over 220 countries.

In Georgia, particularly in Tbilisi, Airbnb’s impact has become increasingly noticeable. According to recent data from 2024, the number of active Airbnb listings in Tbilisi has reached approximately 6,778 properties. Notably, the average daily rate for Airbnb listings in the city now stands around 53 USD, with the average annual revenue per listing estimated at around 6,240 USD. Listings have an average occupancy rate of 42%, indicating stable market conditions and steady demand.

Several factors have supported Airbnb’s rapid expansion in Tbilisi. Key among these is the growing popularity of the Georgian capital as an attractive, authentic, and comparatively affordable tourist destination. Additionally, recent increases in real estate prices across the city have encouraged property owners to shift towards Airbnb, as short-term rentals often generate significantly higher returns than traditional long-term leases. This shift has, in turn, made purchasing or renting properties on a long-term basis increasingly difficult for local residents, especially in central neighborhoods.

Despite its popularity, Airbnb’s rapid expansion has led to several adverse effects on the city’s real estate market. Central Tbilisi has witnessed sharp increases in housing prices, making homeownership or affordable long-term rental difficult for local populations. Moreover, the presence of Airbnb has altered the social fabric of certain neighborhoods, turning formerly residential areas into transient communities characterized by short-term stays.

To address these challenges, Tbilisi’s municipal authorities and related bodies began actively discussing regulations in 2023, aiming to introduce mandatory registration and impose taxes on income derived from short-term rentals. These discussions continue intensively in 2024, and concrete regulatory measures are expected to be implemented in the near future.

As international experiences have demonstrated, regulating platforms like Airbnb is critical to ensuring cities benefit economically from tourism without significantly compromising the living conditions of local residents. In Tbilisi’s case, careful regulation of Airbnb activities is necessary to maintain a sustainable balance between promoting tourism and safeguarding the quality of life for local residents.