Georgia gets $67 million income from Russian tourists in July

The National Bank of Georgia (NBG) said that in July 2019, the Georgian economy received $ 67 million income from Russian tourists.

NBG noted that Georgia received $ 111 million income from Russian tourists last year, which is $ 44 million less this July. Consequently, as a result of the Russian ban on flights with Georgia, the country saw $44 million loss last month.

“The National Bank calculates tourism revenue based on the types of visitors and how much they spent in the country. Tourists who arrive by plane usually spend more than others, and as the number of people arriving by plane declines, so does the income. If there were no travel ban, revenues from Russians in July would have been about $ 130 million,” the NBG told BM.ge.

The estimates made by the NBG correspond to the ones made by the Georgian Tourism Administration (GNTA). Mariam Kvrivishvili, GNTA Head stated the same as the NBG – the country saw $44.3 loss in July due to the Russian ban.

“The loss of $44.3 million means that small and medium-sized hotels, cafes, restaurants, tour operators, tourism service providers, and others have seen much less income,” Kvrivishvili said.

TBC Research says although the drop from Russia and Iran, slightly positive dynamics were maintained thanks to the balancing impact from other countries.

Furthermore, as weekly data indicates, ending weeks of July were characterized with the improving performance – on the one hand, the decline from Russia was moderating and on the other, the composition of international visitors was changing in favor of the countries with much higher per visitor spending, such as visitors from the EU, Saudi Arabia, and Israel.

However, the organization estimates that in light of aviation restrictions imposed by the Russian Federation, tourism revenue in July dropped from $0 to $20 million, a total loss of 0 to 5%.

“Going forward, up to 5% growth of tourism inflows in USD terms over the next 12 months seems reasonable, with a 3.4% increase based on updated information. This implies around 6% and a 9% increase in FY 2019 and 2020. Without the flight ban, the growth would have been around 17% over the next 12 month and 15% and 16% for the FY 2019 and 2020,” TBC Research said.

Moreover, GALT & TAGGART estimates that in July tourism revenue dropped by $ 5 million in Georgia.

Galt & Taggart senior analyst Kakha Samkurashvili noted that Georgia’s tourism sector earned about $ 428 million, down 1% or $ 5 million compared to the same period of 2018.

On June 21, 2019, Russian President Vladimir Putin signed a decree banning Russian airlines from flying to Georgia from July 8 in response to anti-Moscow rallies in Tbilisi.

Following the rallies in Georgia, the Kremlin had said the inward ban was to “ensure Russia’s national security and protect Russian nationals from criminal and other unlawful activities” after the large-scale rallies were launched in Georgia following the arrival of Duma MPs in Tbilisi Parliament on June 20.