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Tourism in Georgian Economy: Only Industry That Keeps Growing

In 2016 Revenues from International Tourism Totaled 2.2 billion USD

Revenues from tourism sector grow on annual basis and reach record figure. Despite two regions of Georgia have been invaded,  tourists consider Georgia to be an attractive country anyway. Over the past 10 years, tourism is an only sector in Georgian economy that grows on annual basis,  despite global or regional crisis periods. It should be also noted that tourism sector has become one of the important sources for currency inflows to the country. According to the statistics of national tourism administration, the year of 2016 and the beginning of 2017 were especially successful in terms tourist and currency inflows from tourism sector.

According to March 2017 indicators, 511 045 visitors arrived in Georgia, up 13.% (+59 308 persons) year on year. According to National Tourism Administration, number of international tourists, who have stayed in Georgia for more than 24 hours, made up 219 642 persons, up 28.6% (+48 807 persons) compared to March of 2016.

Representatives of our neighboring countries are leaders on tourism map, but particular growth is recorded from Iran:

In March 2017 a major part of visits was registered from Azerbaijan (+11.1%), Armenia (+11.2%), Turkey (-17.1%), Russia (+16.5%) and Iran (+194.8%). It should be noted that tourists inflow from Iran seriously declined after the parliament of the previous convocation abolished the visa-free regime. However, the Government realized its mistake soon and, as a result, number of Iranian tourists is growing every year.

According to National Tourism Administration, positive trend is maintained with EU countries too. In March inflow of tourists from Poland rose by 39%, France +38%, Germany +19%, Greece +18% and Lithuania +17%, however, along with EU countries, considerable growth was recorded from eastern countries, namely from Iran +195%, India +182%, Egypt + 199%, Uzbekistan +97% and Israel +93%.

According to January-February indicators, transactions made by international tourists by foreign payment cards constituted 293 065 thousand GEL. According to the Tourism Department, in 2016 revenues from international tourism equaled to 2.2 billion USD, up 11.9% (+230 million USD) year on year. It is worth noting that in 2016 revenues from tourism sector exceeded the amount of foreign directs investments (FDI) by 555 million USD and this fact reaffirms that tourism sector is a priority direction for our country.

Georgian Prime Minister Giorgi Kvirikashvili has talked about achievements in tourism sector at the inauguration of international conference for European and Asian Ski Resorts of UN World Tourism Organization.

«Over the past 5 seasons number of visitors to Georgia’s ski resorts rose by 800%. We are happy this tendency continues today and this season has recorded 49% upturn. Objective of Georgia is to host international competition in winter sports. It should be also noted that in 2016 the country recorded 6.3 million tourists  and revenues from the tourism sector exceeded 2 billion USD.

EU has recently set visa-free regime for Georgian citizens and this is also an important achievement that will further deepen and foster contacts between people, business relations and tourism», Giorgi Kvirikashvili noted.

According to National Tourism Administration, tourism sector’s ratio in total GDP is 6.3% under 4Q16 indicators and is up 15.85% compared to the same period of 2015. According to the 2016 final report, transactions by foreign payment cards made by international tourists constituted 1 624 808 GEL, up 11.4% year on year.

According to the 2016 total indicators, the ratio in total GDP marked 7.1%, up 11.8% year on year.

Naturally, 7% ratio in GDP cannot justify huge expectations from tourism sector, but the growing tendency in this sector and a wide range of people involved in this field confirms its importance.

It should be also noted that the countries, where tourism sector’s ratio exceeds 15% in GDP, are very vulnerable to economic crisis periods, because financial crisis hits tourism sector, first of all.

By Merab Janiashvili
Economic Analyst
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