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June 8, 2018

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VisitGeorgia: The Ups & Downs of the Georgian Tourism Industry

 

Tourism is a big deal for Georgia. According to the National Tourism Administration, in 2017, the country welcomed 7,554,936 international visitors, of which 3,478,932 (46.04%) were tourists. Considering that Georgia has a total population of 3,718,200, those are some pretty impressive figures. Not only did, as of the third quarter of 2017, tourism provide $2.2b (USD) in Foreign Exchange income to the nation’s coffers, representing 7% of GDP in the same period, the number of tourists increased by 27.9% compared to 2016. Such a large number of visitors necessitates a sizeable number of employees in the hospitality industry. To that end, the number of employees in this sector doubled over the last five years, with its share of the total number of employment increasing from 3.4% to 5.4%, according to the National Statistics Office of Georgia. These figures, however, do not cover the entirety of the tourism and travel industry, which includes tour operators, transport companies, and other services. According to the World Travel & Tourism Council, “In 2016, Travel & Tourism directly supported 122,000 jobs (6.8% of total employment). This is expected to rise by 5.9% in 2017, and rise by 2.5% pa to 165,000 jobs (9.2% of total employment) in 2027.”

 

Meanwhile, its total contribution, “including jobs indirectly supported by the industry was 23.4% of total employment (420,500 jobs). This is expected to rise by 5.0% in 2017 to 441,500 jobs, and rise by 2.2% pa, (30.7% of total).”

 

Indeed, while in Soviet times, Georgia was a popular tourist destination for citizens, in the last decade, the sector has clearly sky-rocketed. This year, Georgia is officially playing with the big boys, after ranking seventh on Lonely Planet’s “Top Ten Countries to Visit in 2018,” Tbilisi making it onto National Geographic’s “Top Ten Places You Need to Visit in 2018,” and The Guardian’s “Where to go on holiday in 2018 — the Hotlist”.

 

Lest we forget, Georgia will also host the final round of the International Forum of Innovations for the Hospitality and Tourism Industry this autumn, the significance of which was outlined by the Minister of Economy and Sustainable Development, Dimitry Kumsishvili and George Chogovadze, the Head of the National Tourism Administration.

 

“Hosting an International Forum of Innovations for the Hospitality and Tourism Industry in Georgia is hugely important for us. All the best innovative ideas generated in the hospitality industry globally will be discussed in Georgia during the forum, whilst on the other hand, it will give us the possibility to organize competitions in the country, fostering new ideas. Overall, this will bring our country improved and better services that we could offer to our tourists,” Kumsishvili said.

 

“Our goal is to transform Georgia into a tourism mecca, both in the region and globally, and this project will help put Georgia on the map as a major center for new ideas and innovations” Chogovadze added.

 

As is plain to see, tourism is an important source of revenue for the country, as well as a means of promoting its profile internationally (Georgian wine’s lack of celebrity status in the world at large is criminal; one can only hope that increased tourism is one way of remedying this). Tbilisi has reaped many benefits from the ever-increasing international exposure and the concomitant gentrification that certain parts of the city have undergone. As Ketevan Ebanoidze, one of the founders of Impact Hub Tbilisi, told me in a November 2017 interview, “With respect to Fabrika and Impact Hub, I believe that it has gone a long way towards actually helping the neighborhood and benefiting the local community. Before Fabrika was built, this part of Tbilisi was lifeless: nothing was happening here. Now it has become a lot more popular, with a greater flow of tourists and business, which has resulted not only in greater economic capital, but also an increase in the creative capital of locals as they look to come up with new business ideas to tap into the attention that Fabrika has brought to the area.”

 

Furthermore, Tbilisi’s vibrant and burgeoning bar and nightlife scene has undergone vast improvement over the past years, and the effect of tourism on the development of the city and the blossoming of the hospitality industry and cannot be overstated. With an increased number of tourists, a greater variety and higher quality of services has been demanded that has created an added incentive for competition and innovation to improve on existing services and fill the gaps in the market. As word gets out about how awesome Tbilisi is, more tourists visit, and the cycle continues. AirBnb, too, has allowed many locals to cash in on the boom and make a killing during the summer. This is a truth that I only know too well: I’m getting kicked out of my flat in Saburtalo at the end of April because, at $30 a night, the $800-$900 per month my landlord makes from the start of May until the end of September far exceeds the $300 off-season rent that I have been paying her. And when you consider that the average Georgian monthly salary is 940 GEL ($381.34), that’s taking into account the incomes of the wealthy stratum of society, thereby painting a generously misguided picture of what the majority of Georgians live off, those figures are truly incredible. My straight white European male privilege counts for nothing against the mighty capitalist forces.

 

Tbilisi’s magnetism has also allowed for the local creative sector to flourish. As Ryan McCarrel, owner of Fotografia photo gallery, explained: “I set up the gallery because I thought there was a growing market for the work of Georgian artists that are quite accomplished. I don't run the gallery for a profit, but to help support the work of artists. This would not have been possible without tourism. In the six months we’ve been open, we’ve been able to leverage the growth of tourism and the market for high quality Georgian photographic art into several thousand GEL which we are very happy to have been able to pass on to the artists directly (after paying for rent and salaries, of course). While it may not be much, it's just the beginning, and without the growing tourism sector it would have been impossible, as the domestic market for photographic art is just not there yet.”

 

McCarrel, however, was wary of the good guidance and direction that Tbilisi’s continued development will need in order to maximize its touristic appeal.

 

“There are several large-scale investments which are not doing enough to support the cultural producers which make Tbilisi a vibrant European capital city. I think that the Adjara group, with Fabrika, is a good example of a company which is in the tourism industry but also provides spaces for local creative types. Other development projects like the new Galleria have provided almost no space for this or opportunity for Georgia's burgeoning creative industry. This is a real shame, as tourism relies on the cultural output of a city: this is what makes it interesting.”

 

Yet, there is also a dark side to a booming tourism industry. As Futurist Gary Whitehill told me after attending a Georgian Startup Grind event at the invitation of G4G/USAID in September, “Without leadership, Georgians will further suffocate in the quicksand that is a tourism-first strategy. A recent statement from the Minister of Finance that “tourism is the best export,” shows a dire lack of understanding of how to develop the country for the long-term. It’s pathetically ridiculous. What the next trick politicians like to enforce is the outdated conventional wisdom of exporting services. But once again, this is not a viable long-term strategy for economic development in the 21st Century. The country needs to architect its future around pillars of value creation instead of tourism and services, which are forms of exploitation.”

 

Indeed, a burgeoning tourism sector, especially in developing countries like Georgia, is no guarantee of it being beneficial to the many. In an unequal society like the one we have here, where the majority of the population earn so little that they simply cannot afford the necessary resources and infrastructure to get ahead and compete in the industry, the possibility of the rich getting richer and the poor staying poorer is very likely, if not guaranteed.

 

Ciarán Miqeladze of Post Pravda hits the nail on the head for the risks and challenges faced by the Georgian people: “In an economy like Georgia’s, where 35% of the economy is controlled by businessman and former Prime Minister, Bidzina Ivanishvili, and minimal redistribution exists, it would appear that tourism is primed to continue contributing to inequality. One must begin to think that tourism offers little hope for working class Georgians but instead merely enables foreign investors and the upper class to profit off the backs of those who are suffering most.”

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