Tourism Afloat: Update After 2 Weeks of the Flight Ban
Observing the data of the second week arrivals since Russia’s recent flight ban, dynamics remain broadly unchanged from a week before1: despite the drop of Russian tourists, total travelers growth remains positive at 2.1% YoY.
Historically, the increase of tourist inflows has been several percentage points higher as compared with that of travelers; however, due to more pronounced drop in tourists rather than same-day visitors, this differential should be lower. While more information is needed on the tourism inflows, the read-across indicates that the tourism stays afloat.
The arrivals from Russia by plane, directly hit by the sanctions, was down by 75.9% YoY in week 3 of July, largely unchanged from the 78.6% decrease of previous week. At the same time, the total number of Russian travelers declined more moderately by 13.5% YoY (vs. 21.4% YoY drop in the previous week). This is mostly explained by the increased number of land border crossings by Russian citizens from Armenia, Turkey, and Azerbaijan. Also, the land arrivals from Russia declined by only 1.3% YoY, as compared with the 5.6% drop from a week before.
Overall, TBC Research earlier projections on up to 5% tourism growth over the next 12 months seems reasonable. As well as above 4% GDP growth for the FY 2019 and 2020 and the GEL being undervalued – consistent with the NBG latest judgment (see note monetary policy rate).
See more on updated projections in forthcoming TBC Research monthly update to be released in the beginning of August.