Business Political Insights BPI.GE
TBILISI(BPI)- The sector that powers the national economy is transforming itself for a green future.
A little over 15 years ago, few dared visit Georgia’s isolated Svaneti mountain region uninvited. Although unmatched in natural beauty, it was a lawless backwater of highway robberies, blood feuds and bridenapping where Kalashnikov rifles were almost a male fashion accessory. Nobody dared imagine that in just a few years, this unruly territory would become one of the country’s leading tourist destinations, with a ski resort and theatre, and scores of hotels, cafes and restaurants.
In 2004, Georgians elected a revolutionary government that swiftly eradicated organised crime, simplified the tax code, liberalised visa regulations, repaired roads, restored electricity and rebuilt the country. Such was the improvement that people would not only want to visit, but invest in Georgia, too.
The administration understood how important tourism development would be in helping repair the shattered economy it had inherited, and revitalise long-neglected areas such as Sighnaghi in eastern Georgia, which was rigorously renovated and marketed as ‘the city of love’.
Tourism is not a tough sell. Georgia may be small in size, but it boasts several Unesco world heritage sites, the Black Sea coast, the majestic Caucasus mountains, diverse natural environments, an 8000-year-old winemaking tradition and an equally strong food culture.
Between 2009 and 2012, the number of visitors to the country jumped by nearly 200% — from 1.5 million to 4.4 million — marking one of the fastest growth rates for tourism in the world. By 2019, the number more than doubled again to 9.3 million, injecting more than $3bn into the economy, accounting for 7.5% of gross domestic product.
Although the government has been busy creating fertile conditions for investors in the tourism sector, it has only recently begun to confront the negative effects of the tourist boom and the need to ensure sustainable, high-quality growth. The good news is that ‘sustainability’ is becoming a buzzword.
“Our main priority is promoting sustainable tourism: it is part of the [Ministry of Economy and Sustainable Development’s] national policy,” states Tamuna Koriauli, deputy head of the Georgian National Tourism Administration. “We support local communities with free training programmes to enhance safety, sustainability and green principles,” she says.
While the government draws up strategies, encourages the private sector to invest and promotes Georgian tourism worldwide, the EU, USAID, the UN Development Programme (UNDP) and others have been actively backing regional projects with funding. Last year, for example, the EU, alongside two individual member states, Sweden and Austria, launched the so-called ‘Greta project’, calling for development grant proposals worth a total of €860,000 in eight mountainous municipalities in west Georgia.
Such grants are not simply awarded to people who fix up their homes to rent out a room or two, but to applicants that can provide a distinctive business model along with an environmental-impact review. “We are trying to push the market to a more professional level,” states Stephan Schmitt-Degenhardt, project technical leader at UNDP.
Mass tourism attracts low skills. Nearly 80% of Georgia’s visitors are from neighbouring countries who, for the most part, do not expect high-quality services. For Georgia to be more sustainable, it must attract “high-value tourists”, argues Mr Schmitt-Degenhardt. Such visitors typically visit the regions, spend more money and leave a minimal environmental footprint. “To move to higher value requires higher skills and new products,” he adds.
In every region targeted for development, the government and international organisations invite civil society representatives and the private sector to actively engage in brainstorming and planning sessions. Short-term vision is a negative trend all too prevalent within the country’s private sector. In Borjomi, however, business leaders are showing they are on board with long-term, sustainable goals by proposing initiatives to introduce city clean-up and waste management projects, along with developing ecotourism projects.
As private sector developers go, none have been more advantageous to Georgia’s tourism sector than the Adjara Group. In 2012, before its Rooms Hotel Kazbegi opened in the mountain hamlet of Stepantsminda, there was no dependable place to stay. Its sudden presence sparked such a wave of interest in the region that today there are nearly 150 accommodations listed on booking sites. Adjara Group’s projects are magnets to development. Fabrika, its hostel and urban space concept in Tbilisi, has inspired cafes and small businesses to open up in what had been a neglected neighbourhood.
Today, the group is taking development to a new level by revitalising an entire village in south-eastern Georgia. Called the Udabno Project, it is a partnership with local farmers that includes 2000 hectares of almond trees, a vineyard of rare endemic grapes and a buffalo dairy farm.
For the past year, Georgia has been on pins and needles as the Covid-19 pandemic crushed the country’s fastest-growing sector. As it reopens its borders, people are looking forward to a return to normal. Studies show that travelling trends are changing already. Georgia has typically been a transient destination where visitors stay for two to three days and move on, but now it is seeing prolonged stays of five to seven days.
The hope is that the pandemic will have given people in the sector a break to reassess their priorities and move to a more sustainable model as visitors return.
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