Georgia Sees Tourism Gaining Share of GDP on Russian Visitors

Georgia’s tourism industry, whose share of economic output has grown to 7 percent this year, is set to expand further as a thaw in relations with Russia spurs an influx of visitors.

“Russian tourists, as a high-spending segment, are important for Georgia,” Maya Sidamonidze, chairman of the National Tourism Agency, said yesterday in a telephone interview from the capital, Tbilisi. “We expect their share to grow to 40 percent in the next few years from only 7 percent of total tourists this year.”

The Black Sea nation is benefiting from a threefold increase in Russian arrivals last month at tourist destinations such as Tbilisi, the port of Batumi and ski resorts of Bakuriani and Gudauri. Georgia’s tourism industry contributed 5 percent to economic output in 2011, Economy Minister Vera Kobalia said, adding that the former Soviet republic expects more than 3 million tourists this year, from 2 million in 2010.

Georgian President Mikheil Saakashvili in February called for closer economic ties with Russia, with which it fought a five-day war in 2008, offering visa-free travel for investors and tourists from its larger neighbor. Russia proposed to restore diplomatic relations last month, an offer spurned by Georgia until “illegal embassies” are removed from the breakaway regions of South Ossetia and Abkhazia.

Russia routed Georgia’s army in an August 2008 war over South Ossetia, before recognizing its independence and agreeing to defend its borders. Georgia considers South Ossetia and Abkhazia part of its territory.

Georgia’s $11.6 billion economy grew a preliminary 7 percent in 2011, the statistics office said last month. Gross domestic product rose 8.8 percent from a year earlier in the fourth quarter.

Georgia was ranked as the world’s third-fastest growing tourist destination last year with a 39 percent increase in international arrivals, according to a March report published by the World Tourism Barometer.

To contact the reporter on this story: Helena Bedwell in Tbilisi at hbedwell@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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