How Georgia is ‘going green’ to transform its tourism sector

Welcome though Georgia’s regular tourists are, they are not what the country most wants right now. Coming as so many do from Georgia’s neighbors, they are not rich, so while their numbers are considerable, few are high spenders. Lacking major manufacturing export revenue earners, Georgia needs to earn money to cover a $9 billion deficit (2023 numbers) in its foreign trade, with tourism its best option. Hence the current official campaigns to develop the country’s upmarket appeal to increase visits from higher-spending tourists from Europe and the Middle East, with attractions such as eco-, adventure-, and nature-based tourism.

Outlining its vision for Georgia’s tourist development, the Ministry of the Economy has announced its vision that: “The quality and variety of the tourist flow will become more significant than the number of visitors.”

So, what do high-end tourists look for? According to international consultants Bain, they like unique, “personalized, and transformative experiences” that foster a “disconnection” from normal life. “High net worth and ultra high net worth individuals have heightened experience expectations beyond traditional luxury amenities. Impact-consciousness, particularly among younger generations, favors more authentic and culturally immersive experiences and accelerates sustainable practices,” says Bain. So, even if Georgia does not expect to win a very large slice of the EUR 1.5 trillion that Bain estimates is the size of the global luxury market, it should be able to win at least a small piece.

Among the rich tourist preferences that match what Georgia can supply are those named by Vogue Traveler (gig-tripping, biohacking, and sustainable accommodation), Luxarylifestylemagazine.com (sustainable spa and wellness retreats), the Word Tourism Organization (local gastronomy, nature, wellness, and rural tourism experiences) and luxury travel group Our Habitas (reconnecting with the wild).

High-value tourists

Some of the highest spending tourists listed in a National Bank of Georgia report for the first part of 2023 were Israelis at $1,392 per visit, followed by EU citizens at $1,332, and Belarussians at $1,088. Iranians, on average, spent $932, Russians $832, Azeris $710, Turks $453, and Armenians $170. However, a report on high-spending tourists by Georgia’s International School of Economics (ISET) also found that tourists from Saudi Arabia, Kazakhstan, and China have the potential to be even higher spenders, with estimates of GEL 5,391 for Saudi spending per trip and GEL 3,397 for Kazakhs.

The dynamics of Georgia’s success with Middle Eastern tourists has also been exciting regional envy. The figure rose 15 times between 2012 and 2022 to reach well over 200,000, according to GNTA. “Georgia is popular among tourists from the Middle East not only because of its scenic views, affordable hotels, and relative proximity, but because of the growing availability of halal food and Arabic-speaking guides,” commented UK-based Middle East Monitor.

The largest increase has been in visitors from Saudi Arabia – from 116 in 2011 to 119,931 in 2022. But rising numbers have also come from Jordan, Kuwait, the UAE, Egypt, Syria, Yemen, Oman, Bahrain, Qatar and Iraq. The popularity of Georgia with these countries, noted a report from Armenian Armenpress, has also brought “investment flows, (mostly from the UAE) directed mainly to the hotel sector.”

The Georgian National Tourism Administration (GNTA) has been working hard to raise Georgia’s profile abroad, hosting more than 350 journalists and tour operators from European and North American countries last year. It also organized 67 information and 13 familiarization tours. Targets were newspapers and magazines such as the Financial Times, The Times, Forbes, Vogue, Sueddeutsche Zeitung, Elle, Saveur, and the Huffington Post.

Ecotourism investments

Investment is being made in the mountain areas that could help them contribute more to Georgia’s tourism coffers. For a start, the mountain resorts have major development projects as part of Georgia’s strategy of upgrading its sports areas. “The ski tracks on Svaneti’s Hatsvali mountain are being extended by 6 kilometers and in Gudauri by 3 kilometers,” the national tourist administration has announced. Artificial snow-making systems and new outpatient clinics were also on the agenda for Gudauri and Bakuriani this year. European money and the World Wide Fund for Nature are funding the Ecoregional Corridor Program to link the protected areas and ensure the genetic exchange of species between them, and the number of rangers is being increased to help safeguard their welfare.

The goal of Georgia’s ecotourism strategy is to develop “authentic, high quality, year-round touristic products and services, to include local communities in providing ecotourism services,” and to define ecotourism target markets and foster high environmental awareness of the visitors. It has been adding to the territories of its national parks and protected areas, and the restrictions in the latter make the limited tourism allowed in them all the more valuable.

Protected areas are popular locales with ecotourists, and can produce “considerably more spending per visit than average,” according to the study Economic Impact of Nature-Based Tourism. Georgia is famous among botanists for the biodiversity on its mountain slopes and the region is known to have been the origin of many European plants and trees. Botanical holidays are extremely popular with wealthy tourists, and there are a number of international specialist tour companies.

Another specialist ecotourism area with a very large number of followers internationally is birding – millions in the U.S. and Europe belong to dedicated societies and clubs – and it is also serviced by specialist tour groups. The international attention given to the Batumi Raptor Count, with its biannual monitoring of migrating birds, is evidence of birding’s international reach.

Georgia’s move towards increasing its sustainable and green tourism development is being managed with a combination of “targeted policies, incentives, and public investment,” notes the Georgian report Ecological Tourism as a Promising Trend of Sustainable Development in Georgia. Adventure tourism, from horse-riding treks to mountaineering, are increasingly on offer, with tens of companies operating. However, with no statistics available on the customers’ spending, assessing the contribution to Georgia’s budget can only be guesswork.

Tourism in the mountain areas has not yet turned to pre-Covid levels, but real estate agents Cushman & Wakefield’s 2023 survey showed that the main hotels in the winter resort areas were attracting a diverse range of visitors, including international skiers from Europe, Asia, and the Middle East. Hotels are hardly expensive, after all, with an average daily rate of $74.

Then there is wine tourism, but, attractive though this sounds, this is mainly in the hands of small businesses and family wineries and is rarely set up to offer luxury holidays. However, the quality of niche qvevri wines is improving, rapidly gaining international attention and prizes, and the accommodation on offer is following the same trend.

Not featuring in ecotourism, and not mentioned much in tourism reports, but undoubtedly attractive to certain up-market tourists, is gambling. Since casinos are not allowed in Turkey, Azerbaijan, or Iran, Georgia’s casinos, particularly in Batumi, derive considerable benefit from tourists from those countries. Tourist figures for gamblers are hard to split out and track, but GeoStat has overall gambling bets turnover for 2022 of GEL 32,091 million, up from GEL 25,860 million in 2021. This is a major industry despite toughening regulations. A few years ago, the strength of gambling’s growth trend even caused an International Monetary Fund Mission to “stress the need for improving the coverage of transactions related to gambling.”

TOURISM TRENDS FROM Q1 2024

In 1Q24, the number of international visitors was up 8.6% year on year to 1.2 million, according to GNTA. The key drivers behind this growth were arrivals from Turkey, Armenia, Azerbaijan, and Israel, while among the top ten source countries there was a decrease in visitors from Russia and Ukraine. From EU countries, arrivals increased “strongly” from Poland, Germany, and Greece, GNTA announced. Total tourism revenues in the quarter were up 1.5% on a year ago, at $808 million. The portion of international travel receipts attributed to neighboring countries experienced a slight decrease, dropping to 45% in the first quarter of 2024, which is 13 percentage points lower than pre-pandemic levels – much of this due to the closing of Azerbaijan’s land borders and the war in Ukraine.

International visitor numbers have been steadily increasing along with the growth in accommodation for them, with total rooms available rising by 1.6% to 35,875.

Visitors from Turkey numbered the most (254,577), followed by Russia (215,468), and Armenia (191,830). Then came Azerbaijan (51,466), Israel (46,789), Iran (28,811), Kazakhstan (27,874), Ukraine (24,538), and India (20,645). The total from the EU and UK was 77,045, of which the largest country of origin was Poland at 11,734. Numbers from Russia fell by 16%.