2021 December-January Analysis Featured

AmCham member hotels on summer bumper season, express cautious optimism for 2022

Georgia’s struggling tourism industry received a much-needed lift this summer when relatively low Covid-19 numbers in June and July along with restored flights combined to make the summer tourist season an unexpected success.

While there are still difficult times ahead as the global community struggles to contain and dampen the spread of Covid-19, AmCham member hotels are cautiously optimistic about the gradual recovery of tourism in Georgia and the road of return to pre-2019 heights.

Summer surge

AmCham member hotels unanimously agree that the summer surge in tourism was unexpected.

The Adjara region had a particularly stellar run this summer, Batumi Hilton GM Torsten Weller told Investor.ge, noting that numbers exceeded all expectations and even broke several important historic records.

“Despite the critical pandemic situation in Georgia, we had a high number of international travelers coming mainly from Israel, Saudi Arabia & the UAE. The Israeli market has been one of our main markets for many years, and it was never as strong as it was this year. It was also great to see such a significant booking impact from Saudi and UAE travelers, which was not what we predicted.”

Chateau Mosmieri Hotel and Winery noted that in their case, the return of travelers was marked less by their classic clientele of larger groups and more by lone travelers. The Biltmore in Tbilisi agreed: while tourism numbers are coming back up, businesses reliant on group travel may have to wait a while longer before faith will be restored that traveling in large groups will not pose a significant threat to health.

As for what caused the surge, it’s hard to pinpoint exactly, but Sheraton Metechi General Manager Iva Trifonov says the increase in flight frequency from the Middle East was partly behind the rise, offsetting a temporarily closed Israel and the slowed traditional neighboring markets of Armenia and Azerbaijan.

“Not only did this period coincide with holidays in the Middle East, but it was catalyzed by the easing of Covid-19 restrictions in UAE and other Middle Eastern countries which were still not allowed to travel to their previous favorite destinations in Western Europe”, Trifonov told Investor.ge.

The combination of accessibility, reasonable flight fares, limitations to travel elsewhere together with a welcoming and affordable environment in Georgia contributed significantly to the increase in international incoming travel. The Meridien Batumi notes that the reopening of casinos played a big part in the return of tourists from traditional target markets such as Israel, Turkey, Azerbaijan, Kazakhstan and others.

Expectations for the future

There is little doubt that Georgia will continue to attract tourists as it did at its peak in 2019, but when exactly that will take place is as of yet anyone’s guess.

Biltmore management is guessing that the second quarter of 2022 will show a pick-up in business: “it is difficult to predict what to expect from the upcoming year, but we already have a positive dynamic, and gradual recovery looks like it will occur as early as the second quarter of 2022”, the Biltmore predicts.

Erdogan Sahin of the Mercure Tbilisi is less sure, noting that “the post-pandemic period is unpredictable”, though concedes that with the success of the summer and fall of 2021, one can already talk of a ‘rebirth’ of the tourism industry.

The Batumi Hilton’s Torsten Weller says that going into next year, it will be important for hotels to bear in mind the lessons of this past summer and to recognize that more borders will be open, especially those of Batumi’s direct competitors such as Cyprus, Greece, Bulgaria, and Romania, which will certainly have an effect on tourism numbers.

“That’s why the Georgian Tourism Administration needs to be active now to be present in old and new markets to keep up the momentum. I do believe that the Saudi & the UAE travelers mentioned did enjoy their experience of Georgia and that a certain percentage will come back. I see a big chance to win new markets here in the long run”, Weller told Investor.ge. Placing a date on a full recovery is tough, Marriott GM Cameron McNeillie says, but expresses cautious optimism for early-mid 2022, especially given recent Georgian government initiatives.

“I was very pleased to see the announcement of the green passport status system to access public areas. I think that’s a very positive message. It will give people a sense of assurance that they’re going to as safe a place as possible. This has been a very important issue for a number of our customers. Nothing will ever be 100%, but it will afford a little bit more peace of mind for some people and ultimately stimulate travel.”

McNeillie also notes that given the recent dynamics of recent country openings and closures, Georgia has made itself known on a number of strategic new markets, which may be promising in the near future: “There is huge potential from India and Iran – it’ll be interesting to see how recent and future flight openings will play out, for which much credit is due to the Ministry of Economy, whose deputy head has done tremendous work in stimulating the return of a number of flights.”

The Sheraton Metechi’s Trifonov says the hotel is operating on the assumption that around Q1 2022 restrictions will be eased thanks to higher vaccination rates and pressure to revive stagnant tourism.

“Business travel will slowly come back but will still not reach 2019 levels quite yet. MICE is expected to recover in frequency but with a fewer average number of attendees. Social gatherings and celebrations once allowed will return in full scale as there is quite some pent up demand. We expect a strong summer with the return of Middle East travelers in bigger numbers but also more demand from Caucasian and neighboring countries. Europe will be the last to recover as all other destinations will be available to them.”

Overall, Trifonov states, current forecasts estimate that 2022 will still fall a bit short of 2019 levels, with a higher volume at a lower average rate due to insecurity in the market place and the new players that will open up with diluted penetration rates.

“Judging by the pace of new investments”, she says, “in the hospitality sector it seems that everyone is positive about the recovery. There are quite a few new hotel openings in the pipeline in Tbilisi and in the regions. Travelers will, for some time, choose smaller properties and rely on brands to guarantee safety and hygiene standards and for a while be reluctant to select unrecognized private B&B offers. Small resorts, villas and more privacy will be the choice for vacations. We are expecting to see more senior executives on the road in an attempt to re-establish relations.”

“Once confidence in airlines and no border restrictions is back, leisure travel will re-bounce to satiate the crave for travel which will be stronger than the fear of another pandemic. Travelers will take their revenge on restrictions as during the past two years they became acutely aware just how important travel is to their lives”, she says.

The Radisson Blu’s GM Jordi Kuijt is similarly positive, but notes that there has been a trend of ‘two steps forward and one step back’ when it comes to the recovery, with demand varying widely, business travel lagging behind and global developments in the COVID-19 pandemic quickly reflecting on the tourism sector the world over.

Staying the course will be important for the recovery of the sector, Kuijt says: “A calm and balanced approach to the entry of tourists per the current vaccine and PCR testing regime has worked well. We should not frighten off tourists with ever-changing regulations.”

When tourism will fully snap back is anyone’s guess, but Kuijt notes that “…travel and exploration is in most people’s social DNA. Over the years, more and more of the world’s population will have increased disposable incomes and free time, and there is no better way to spend it than traveling…for example in Georgia!”