Tourism is one of the main engines of Georgia’s economy for good reason. As the accompanying Fact Sheet below describes, Georgia has attracted the attention of both tourists and tourism experts from around the world for its rare natural beauty and outdoor activities. Its celebrated wine industry—the world’s oldest—and distinct cuisine, its archeology and ancient heritage, and its rich Christian civilization and European culture are strong magnets that inspire and enthrall.
In 2019, Georgia attracted more than 8 million tourists, whose enjoyment contributed more than $3 billion to Georgia’s economy, an increase of nearly 8% from the previous year. Expectations for 2020 were for yet another substantial increase, and projections of 8–10% growth in the next five years were common. Leading publications—National Geographic, Condé Nast’s Traveler, Forbes, Financial Times, Lonely Planet, and others—advertised Georgia and its visa-free regime with 98 countries as one of the world’s most attractive destinations.
The state of emergency caused by the pandemic closed down Georgia and almost instantly paralyzed the country’s burgeoning tourism industry. Private and government economists believe that the damage is likely to be extensive, and that opening and restarting tourism must be a top government priority.
The Government of Georgia announced on May 7 that it would release a recovery plan for tourism within 10 days, following an in-depth study of the extent of the damage. Prime Minister Giorgi Gakharia noted that tourism must be the first priority for post-crisis and economic recovery plans, as this is the sector in which Georgia has a strong competitive advantage. “The tourism sector will be fully exempt from property taxes for 2020… income tax payments will be deferred until the end of the year for companies operating in the tourism sector… During the crisis management stage, we promised hotels with less than 50 rooms to subsidize their loan interest payments, which we did, and several thousand business operators and companies took advantage of this offer. Today, we are establishing a new norm: We will subsidize 80% of bank loan interest payments for the first 5 million GEL of loans for every hotel with an annual turnover of up to 20 million GEL, which will also constitute significant support for the development of the sector,” the Prime Minister announced.
In addition, Minister of Economy and Sustainable Development Natia Turnava unveiled an extensive plan of “Supporting Business,” which includes aggressive measures to support tourism enterprises in particular. The package will address, for example, tax concessions for maintaining workplaces; property and income tax deferrals for tourism-related businesses; subsidized loans for family-, small-, and medium-sized hotel businesses; loan restructuring; insurance against basic food product price increases; and an automatic VAT refund mechanism, among other initiatives. Special emphasis in this plan and the enlarged “Micro and Small Entrepreneurship Support Program” will be on stimulating local production to maximize opportunities in Georgia’s local markets.
Intercity (internal) tourism within Georgia is slated to restart on June 15. International tourism is planned to restart on July 1. Corona-free tourist zones will be established. In September, the United Nations World Tourism Organization (UNWTO) will convene a Ministerial in Tbilisi on “Future Prospects for the Tourism Industry.” The Secretary General of UNWTO praised Georgia for creating Green Zones for Tourism within the country, with safe corridors negotiated with neighboring states.
