Georgian tourism revenues drop 13 per cent in wake of Russian flight ban

The Georgian tourism industry generated 374.7 million US dollars of revenue in July, 13.3 per cent less compared with July, 2018, has reported.

Earlier this month, the Georgian National Tourism Administration announced that the country hosted more than 570,000 tourists in July, a one per cent increase year-on-year. The number of tourists visiting the country between January and July grew by eight per cent to 2.7 million.

“We understand that the tourism industry needs the most support (…). We have created two programmes to support small and medium enterprises operating in the field of tourism. One programme is about supporting the construction of hotels (…) [while] the second programme aims to co-finance interest rates,” wrote, quoting the Georgian prime minister Mamuka Bakhtadze. The programme will be launched in September.

The Georgian tourism industry is set to suffer further declines after Russian president Vladimir Putin ordered a complete flight ban to Georgia from July 8 in response to protests in Tbilisi against Russia’s occupation of the Georgian regions of Tskhinvali (South Ossetia) and Abkhazia.

Meantime, US-based international credit ratings agency Fitch has reaffirmed the country’s long-term foreign-currency issuer default rating at “BB” with a “stable outlook.”

“Georgia’s ratings are supported by governance and business environment indicators that are above the current medians of “BB” category peers, and a track record of macroeconomic resilience against regional shocks,” the agency said in a statement on August 17, noting that the country is now “facing a new external shock.”

“Dynamic tourism exports and lower import growth (…) led to a narrowing of the current account deficit to 7.7 per cent of the GDP in 2018 from 8.8 per cent in 2017.” The current account deficit is expected to further narrow to 5.3 per cent this year.

The country’s tourism sector generated 3.2 billion US dollars of revenue last year, nearly 500 million US dollars more than 2017.