Business
Posted: 1 week ago

Some Hotels Closed, Holidays Extended– How Coronavirus Affects the Tourism Sector

Last week, the National Center for Disease Control confirmed that a child was tested positive for the coronavirus in Georgia.

The 12-year-old child was a member of a group that visited Italy several days ago.

The group’s members were in self-isolation, and the virus was detected during a repeated test. After this revelation, the interdepartmental coordination board led by Prime Minister Giorgi Gakharia took the decision to extend holidays at Georgian educational institutions to April 1. 

This extraordinary program was introduced at all government offices. In this situation, the Caucasus Business Week (CBW) has inquired as to how the coronavirus may affect the business. 

Georgian importers have assured that, despite the global challenges, and at this stage, there are no grounds for panic in Georgia, and food products and hygiene products will not rise in price. 

After the coronavirus’ spread to Georgia was officially confirmed,  some of our citizens started stockpiling food. As noted by Iva Chkonia, the Head of the Distributors Association, said that at this stage, there are no grounds for panic, and companies have created the necessary reserves of food and hygiene products. 

“Companies continue to operate the same way they did in 2019. The borders remain open for importers,  and they face no obstacles. People can live without home appliances and new clothes for a certain period, but laundry detergents and food products are necessary everyday products, and our citizens would feel their absence if there are problems”, Iva Chkonia said. 

We should not expect the price of products to rise. There is a sharp competition on the global market, and one problematic  product may be replaced by another, Iva Chkonia said. 

“If there is a problem with imports of one specific product and the manufacturing countries suspend production because of the current situation, we will have alternative sources. The market is big, competition is sharp, and we can replace one detergent with another. They have the same situation with food products. If our key suppliers, such as Turkey, Ukraine, Russia, suspend production, we can import the same products from other countries, and just the transportation costs will be added to the price. In this case, products may rise in price, but ultimately without consequence. I assure you that there are no similar threats at this stage”, Chkonia noted. 

“There are no preconditions for product deficit or rising prices”, Vakhtang Sadzaglishvli, Director of Charm Trading importer company, noted. 

“There is an uneasy situation across the world, and it may worsen tomorrow. We cannot make forecasts in advance, but today, we have no grounds for panic. If the situation worsens, and some countries suspend production of any product, naturally, product imports will shrink temporarily. However, major manufacturers have production lines in various countries, and the market will be redirected to other markets”, Vakhtang Sadzaglishvili said. 

Some Tbilisi-based hotels were closed temporarily, while others  operated with half the staff, after the majority of bookings were cancelled. 

As noted by Shalva Alaverdashvili, founder of the Hotels and Restaurants Federation, the hospitality industry asks the government to establish preferences. It would be excellent if bank obligations will be postponed for 2 months for those hotels that pay leasing fees, he said. 

“Over the past year, the tourism industry has faced serious problems. After the ski resorts were left without a water supply this winter, tourisms cancelled 90% of their bookings. Now, the sector is suffering coronavirus-related problems. Bookings from several months ago were cancelled, and some of them suspended operations for several months”, Shalva Alaverdashvili noted. 

Because of reduced bookings, The Adjara Group granted  a paid vacation to 50% of its staff. 

“The majority of bookings were cancelled, and this is an international problem, not a domestic one. Therefore, we have decided to ensure the safety of our staff. Consequently, we have granted paid vacation to them. Over the past 10 days, 90% of the bookings were cancelled. Our hotels in Tbilisi and Kazbegi work at 20% of full capacity”, Adjara Group representatives noted. 

The Kalasi Hotel on Kote Apkhazi Boulevard in Tbilisi has suspended operation for two weeks, and the hotel management is waiting for stabilization after numerous cancelled bookings, Hotel sales manager Tata Sarjveladze noted. 

“We have suspended operation for two weeks. Over the past 3 months, we have not received bookings, and the hotel became unprofitable. Therefore, we have decided to temporarily suspend operations. We will return to the usual regime in two weeks”, Tata Sarjveladze noted. 

Salome Gulordava, the head of the marketing department of the Museum Hotel, also complained about coronavirus related challenges, but as she noted, the Museum Hotel continues to operate normally. 

“The majority of bookings were cancelled, but the hotel was not closed, and we continue to work as normal. We take into account all the recommendations issued by the corresponding instances regarding how to conduct ourselves in this situation. We are constantly working on disinfection. We cannot make forecasts on future plans, because this is a global problem, and we do not know how long it will last”, Salome Gulordava noted. 

We remind you that as of March 12th, Georgia has registered 25 infected persons. At this stage, 126 persons have remained in quarantine, and 46 persons are under special supervision. 

The first case was registered on February 26. This infected person entered the country from Iran via Azerbaijan. 

The coronavirus broke out in China in December 2019. On January 21, China confirmed that coronavirus was transmitted from person to person, and introduced a quarantine regime in two big cities . 

At this stage, the coronavirus has been spread in more than 100 countries. Corporations such as Apple, Google, IKEA, Burger King, Hyundai, Swatch have fully or partly shut down their operations in China. The USA, EU countries and Asian countries are trying to curb the virus spread through new regulations. More than 40 airlines, including   American, Delta, United, Lufthansa and British Airways have banned flights to China.