Georgia’s tourism’s sector – growth, setbacks, and shifting trends

2024 was a complicated year for the Georgian tourism sector. Political turbulence created significant headwinds, particularly in the fourth quarter, and the drop in European arrivals had a significant negative impact in some quarters. Nevertheless, across the year, according to Galt and Taggart, the sector saw an overall growth in revenues, thanks in part to a new wave of visitors from Asia and the Middle East. This contributed significantly to the country’s 9.4% economic growth. Despite this growth, shifting source markets, regional instability, and concerns about long-term sustainability continue as the sector enters 2025.

In early February, the Georgian National Tourism Administration (GNTA) held a presentation for the tourism and hospitality sector, titled “Tourism Industry Summary and Planned Activities.” At the meeting, industry representatives voiced concerns that tourism statistics do not reflect the current reality, noting that “there is a significant gap between the private sector and the state” when it comes to their understanding of how tourism has been impacted by developments within the country. The discussion touched on key challenges facing the tourism sector, including the cancellation of hotel reservations due to political instability, legislative issues, and other industry-wide concerns.

General Manager of the Sheraton Grand Tbilisi Metechi Palace and Co-Chair of the AmCham Tourism Committee Deborah Sivertsen says that overall, “2024 was a great year for the hotel,” but that a decline in tourism in the fourth quarter — particularly in December — was influenced by several factors.

Global economic uncertainties and fluctuations in travel demand affected visitor numbers across the region, notes Sivertsen. Additionally, seasonality played a role, as December is typically a transitional period with fewer business travelers and shifting leisure travel patterns. “Weather conditions and geopolitical factors may have also contributed to shifts in travel behavior,” she says, echoing others’ sentiments that unusual weather patterns and a lack of snow hit the country’s ski tourism hard, as did ongoing political instability.

“We started 2024 well and outperformed 2023, but the events [widespread protests around the introduction of foreign influence legislation] in May dealt a major blow to the sector,” says hotelier Shalva Alaverdashvili, who manages seven hotels, six of which are in Tbilisi. “We still had reservations until December 4, but after that date, they were canceled en masse. It was already the low season, yet 70% of existing reservations were still canceled. As a result, central Tbilisi ended December with an average occupancy rate of 20%, compared to 58% last year.”

Owner of Vinotel Hotel Benedikte Kashakashvili says that for his hotel, “2024 was a challenging year, especially toward the end. The unstable situation was further exacerbated by an unusually snowless winter. We faced cancellations from both foreign and local regular customers who were physically unable to travel by any means of transport.”

Tourism revenue

Overall tourism revenue for 2024 reached $4.4 billion, up 7.3% from the year prior, notes a recent report by Galt & Taggart. And while revenue for the sector was also up 10% YoY for the fourth quarter as a whole, it dropped by 10% YoY in December as hotel occupancy rates in Tbilisi also fell significantly.

The report, which tracked tourism trends throughout 2024, notes that the first quarter of 2024 witnessed a 40.9% YoY increase in visitors from the European Union. Ongoing protests and deteriorating relations with the EU throughout the remainder of the year, however, led to a significant decline in visitors from the bloc, who have traditionally been a strong segment of Georgia’s high-value tourism market.

“If you are not enabling the environment, promotion alone doesn’t help. Europeans are not unfamiliar with demonstrations, but when there is negative news in their countries about the current situation in Georgia, this is a significant obstacle for tourism. In a country where their leaders or ambassadors are spoken of negatively, European tourists are less likely to visit,” says Natalia Bakhtadze Engländer, founder of the Georgian Ecotourism Association.

Galt & Taggart’s latest report, published in March, notes that tourism revenue in the first two months of 2025 increased slightly, up 0.7% YoY to $536 million. February, specifically, was flat in annual terms, amounting to $246 million. Yet despite concerns, the report still projects total tourism revenues to reach $4.5 billion in 2025 – a slight increase to the $4.4 billion recorded in 2024.

Shifting source markets

Another notable development within Georgia’s tourism is its shift towards attracting more visitors from the Middle East and Asia, a trend that Galt & Taggart analysts expect could help insulate the industry from its recent downturn in visitors from Europe.

The Sheraton Grand Tbilisi Metechi Palace’s Sivertsen says the hotel has also witnessed this shift within the demographics of its own guests. “Over the past year, we have welcomed an increasing number of guests from the Middle East and Asia. This growth can be attributed to expanded air connectivity, targeted tourism initiatives, and the rising appeal of Georgia as a diverse and welcoming destination for travelers from these regions.” To cater to the preferences of these different guests, she says the Sheraton has enhanced their offerings, including tailored culinary experiences, cultural considerations, and personalized services like the introduction of “a Ramadan Early Breakfast for our guests.”

According to GNTA, a record number of international tourist visits were recorded last year, reaching 5.1 million visits. The increase represents a 9% rise compared to 2023, and a 0.2% increase compared to pre-pandemic levels in 2019.

A significant increase in visits was recorded from Israel – around 311,000, a 43% increase compared to 2023, as well as Iran, Saudi Arabia, and Central Asia. Tourism numbers from India and China also grew notably, with around 124,000 (+47% YoY) and 89,000 (+83%) visits, respectively, the administration’s report states.

Expectations for 2025

While TBC Capital analysts forecast that tourism will grow in 2025, they expect it will not be as strong as it would have been without the current political instability. “Internal political tensions have certainly affected the tourism sector. The growth that should have occurred in the tourism sector has slowed. We expect growth in both revenue and the number of tourist visits, but the distribution of markets will change. Asian markets, such as China, India, and others, are likely to become more active,” says Senior Analyst at TBC Capital Irakli Urgebashvili.

The market could also be impacted by the introduction of several airlines launching new routes to the country’s capital. In addition to the announcement in 2024 that Georgia and South Korea were working towards establishing regular direct flights and the opening of mutual visa-free travel between Georgia and China in 2024, British Airways and EasyJet announced they would launch direct flights between Tbilisi and London starting in April 2025. EasyJet will also offer Geneva-Tbilisi and Milan-Tbilisi flights as well. Also among the newest routes set to launch this year are direct flights from Zurich to Tbilisi, operated by Edelweiss Air, and a budget-friendly option to fly direct from Tbilisi to Paris on low-cost carrier Transavia France.

And while hotel managers in Tbilisi expect some fluctuations in the short term, some also remain optimistic about a steady recovery and growth trajectory.

Sheraton Grand Tbilisi Metechi Palace’s Sivertsen acknowledges that while Georgia remains a highly attractive destination for travelers, the political climate can influence tourist sentiment and booking patterns. Periods of uncertainty may lead some travelers to adopt a more cautious approach, resulting in fluctuations in advance bookings and an increase in last-minute travel decisions.

“Early 2025 data indicates promising signs of recovery, with January and February showing gradual improvements in occupancy rates. This upward trend is supported by a resurgence in both business and leisure travel, as well as key industry events and conferences that continue to sustain demand, particularly within the corporate segment,” says Sivertsen.

Vinotel’s Kashakashvili says that the political situation within the country will be a key determinant in attracting guests. “If stability is maintained, even under the current circumstances, we will have a better outlook for the future,” he tells Investor.ge.

Hotel managers emphasize that several key policy and infrastructure changes could also significantly bolster the sector. Increased investment in tourism infrastructure — particularly in transportation and airport facilities — would enhance accessibility and attract more international visitors. Strengthening connectivity, especially with emerging markets, is seen as a crucial step in boosting both leisure and business travel. These efforts, they argue, would not only benefit hotels but also contribute to the broader growth of Georgia’s tourism industry.