2022 August-September Analysis Featured

Private sector investments in tourism keep Georgia thriving

Georgia’s tourism industry continuously proves to be resilient and incredibly important for the country’s overall economy. Fully recognizing how crucial the tourism industry is to the country’s economic growth, the Government of Georgia continues to make progress to eliminate barriers and open more opportunities for tourism, including easing visa requirements, repairing roads, privatizing hotels, and offering tax cuts for tour operators. From wineries in the Kakheti region, to vibrant markets in Batumi; Georgia is an attractive tourism destination that comes in many varieties.

Tourism accounted for 7.5% of Georgia’s gross domestic product (GDP) growth from 2018-2019. In 2019, the country received a record number of 9.3 million international visitors — a 7% increase from the previous year. Although COVID-19 hit Georgia’s tourism industry hard as part of the global travel slowdown, it is making a comeback, as institutions such as the Georgia National Tourism Administration have worked to safely reopen the country to international travelers.

For many years, USAID has recognized the important role that tourism plays in driving Georgia’s inclusive economic growth and invested in expanding that impact. The agency also clearly sees the linkages in the tourism sector between strong natural resource management, sustainable economic growth, and mitigating climate change. Georgia’s thriving tourism industry is built on its natural beauty and rich cultural history; in recognition of the need for sustainable growth, USAID supports programming that will ensure Georgia’s thriving tourism industry remains resilient while still climate conscious.

Many of the U.S. Embassy’s 30 offices and agencies work to support Georgia’s tourism industry, with USAID leading the way. Teaming up with the U.S. Department of the Interior, USAID launched a program in 2019 to help Georgia sustainably manage its natural parks and protected areas as commercial, income-generating resources, much like the U.S.’ own national park system. By supporting best practices in managing resources and tourism development, the program transitions the management of protected areas away from foreign assistance and government subsidies — creating economically self-sustaining parks that attract adventurous thrill-seekers, outdoor enthusiasts, and ecotourism guests from around the world, while simultaneously enhancing economic security in the country’s rural communities.

Partnering with the private sector

To drive economic growth, USAID partners with the private sector to build a more modern and commercially sustainable tourism sector in Georgia, and works directly with partners who can bring reach, innovation, and digital technologies to promote Georgia as an attractive tourist destination.

In the last two years, USAID partnered with the digital travel storytelling platform, Steller.co, and Georgia’s National Tourism Administration to bring leading travel influencers with extensive networks of followers on social media to Georgia. These campaigns have reached more than 11 million potential visitors. By working together, this private sector partnership introduced millions of potential travelers to Georgia’s astonishingly diverse landscapes and abundant culture. In total, the influencers’ campaign produced more than $5.5 million in earned media value (advertising value), more than 200 stories on the Steller Platform, and 997 Instagram stories and posts, as well as posts on TikTok and other social media platforms. The estimated economic impact of the two Digital Day campaigns conducted already exceeds $10 million, with another group of influencers due to arrive in Georgia this summer.

USAID continues to facilitate private investment into Georgia’s tourism and hospitality industry, supporting the development of new products, experiences, and business models that attract high-value investors from around the world. For example, USAID is partnering with the Adjara Group, a leading hospitality company, to strengthen the inclusive development and tourism competitiveness of Georgia’s Samtskhe-Javakheti region. The partnership is expected to create 286 new high-value jobs, attract investment worth $3.6 million, and help businesses generate $2.5 million in annual sales.

To reinforce international standards in Georgia’s hospitality industry, USAID and the American Chamber of Commerce recently launched a partnership with several leading hospitality companies, including GMT Group (Marriott Hotels), Silk Hospitality (Radisson Hotels), and Sheraton Grand Metechi Palace. The partnership will advance Georgia’s tourism recovery strategy by attracting high-value tourists that demand top-notch service standards and ultimately make it an even stronger competitor as a top tourist destination. The partnership is expected to help more than 100 participants secure high-value jobs in hospitality, generating over $450,000 in annual payroll. Up to 20 hotels will increase their standards in energy efficiency, hygiene, food waste management, supply management, customer services, and food safety.

Working with local actors

Tourism and hospitality, however, are not just for large international businesses. Throughout the country, USAID supports local actors to promote sustainable practices in tourism, agriculture, and resource management, while simultaneously creating local jobs and stimulating local economies. These local businesses, supported by USAID technical assistance and grants, carry on long after the assistance has ended.

For example, in 2021, Tusheti welcomed nearly 4,000 Georgian visitors and nearly 3,000 foreign tourists, more than double the numbers from 2020. USAID invested 600,000 GEL of support for the region — ranging from small grants to local guesthouses and catering businesses, to training and certifying hospitality staff and adventure tour guides, to adding solar panels to Tusheti’s ranger stations to make them more sustainable, to digitizing local tourist attractions by updating their locations on Google Maps — resulting in the generation of 1.8 million GEL in revenue for the region and 67 new jobs.

These programs are just several examples of the breadth of USAID’s investment in Georgia’s tourism sector. By working together and continuing to spark new investments, Georgia will continue to build a stronger and more sustainable economy — which will continue to benefit all Georgians.