Issue 4, 2019. August-September

   

GEORGIAN GOVERNMENT PLEDGES HELP FOR BUSINESS FOLLOWING RUSSIAN FLIGHT BAN

The Georgian government has announced several measures to help the businesses that are the most vulnerable to any dip in the number of Russian tourists following Russian President Vladimir Putin's decision to ban flights between the two countries.


The Georgian government has estimated that the country could lose as much as $141m in tourism revenues due to a Russian flight ban starting July 8. The country's tourism sector was worth $3.5bn last year, according to the World Travel and Tourism Council (WTTC).

The number of Russian tourists visiting Georgia has climbed over the past few years, part of a larger trend in growing tourism numbers in the country. While not the largest source of visitors - that is neighboring Azerbaijan - the expected drop in visitors from Russia will be felt, especially by small hotels and guests houses in Georgia.

In response, the government has created a multi-pronged response that includes financial help for small hotels.

"We agreed on two important decisions - we will provide the co-financing of the bank loans of the most vulnerable segment in the tourism sector, the small hotels. We also decided to prioritize the tourism and hotel businesses in the credit-guarantee mechanism in order to continue expansion and development of the new projects," Minister of Economy and Sustainable Development, Natia Turnava said following a meeting with the Business Associations of Georgia on July 8. The government will also help new hotel projects secure loans by acting as a guarantor, Georgian Prime Minister Mamuka Bakhtadze said at the same meeting. "We will use this resource when the bank is considering to issue the loan for a new hotel construction or extension of the existing tourism business," Turnava said. "In addition, we will have a very aggressive marketing strategy for strengthening the country's image as a safe destination because this is the most important request of the sector and in general and we will do our best to maintain the traditional markets as well."