Tourism becomes key source of foreign-exchange earnings in Georgia
BAKU, Azerbaijan, Jan. 21
By Tamilla Mammadova – Trend:
Tourism has also become a key source of foreign-exchange earnings in Georgia, accounting for 26 percent of current account receipts in 2019, from 11 percent in 2010, the Moody's Investors Service (Moody) told Trend.
"In 2016, the government implemented the National Tourism Development Strategy, aiming to increase annual visitor arrivals to 11 million and tourism earnings to $5.5 billion by 2025 (from 5.3 million and $1.9 billion in 2015, respectively) by targeting visitors from wealthier markets such as Europe and the United States," the Moody said.
To achieve these goals, the Strategy promotes the development of tourism infrastructure and public-private collaboration in areas such as training, marketing, and regulation.
"However, the coronavirus shock has weighed heavily on Georgia's open, tourism heavy economy, offsetting its relatively strong institutional capacities and early success in handling the pandemic, which allowed for the loosening of lockdown measures before many other countries," the source said.
Although the government has the fiscal capacity to enact significant stimulus measures, which was equivalent to more than $1.1 billion (6 percent of 2019 GDP), and following the easing of lockdown measures, to mobilize the population to support the domestic hospitality industry, we still expect Georgia's economy to contract by 4.5 percent in 2020, in line with both its regional and rating peer groups, the Moody said.
As the Moody noted, while visitor arrivals and earnings have sharply increased since the implementation of the National Tourism Development Strategy, with arrivals from the EU more than doubling from 2015-2019, tourism remains dependent on Georgia's immediate CIS neighbors, with Azerbaijan and Russia collectively accounting for more than half the 2019 total.
According to the source, with goods exports, the thawing of relations with Russia over the past decade has supported visitor arrivals, with Russians accounting for 19 percent of the total in 2019 from just 8 percent in 2011. Visitor arrivals from Russia even remained robust in the face of Russia's ban on flights to Georgia in the second half of 2019, growing by 5 percent overall for the year.
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