“We Expect Tourist Inflows from Israel to Decline; Many Bookings will Be Cancelled”
Amid the threats posed by the global coronavirus outbreak, the Georgian authorities have taken the decision to ban direct flights with China and Iran. Furthermore, on February 26th, the Georgian Health Minister Ekaterine Tikaradze recognized that the first coronavirus-infected person was registered in Georgia, and the authorities closed land communication with Iran.
The Caucasus Business Week (CBW) has inquired as to how these restrictions may affect the Georgian tourism industry.
The coronavirus outbreak will definitely affect Georgia, economic expert Vakhtang Charaia noted. Initially, Georgia banned flights with China, and later, with Iran. If the world community fails to curb the virus in several months, the number of banned countries may increase and, consequently, the amount of incomes will also decline, he added.
Namely, if this problem is not resolved over the next 4 months:
-Georgia will not be able to host 13-14 thousands of tourists from China, compared to the same period in 2019, and total losses will amount to about 30 million GEL, as each Chinese tourist spends about 2253 GEL on average.
-We have the same situation with Iran. After the flight ban, Georgia will not be able to host about 26-27 thousand tourists for the next 4 months, and the losses will amount to about 70 million GEL, because each Iranian tourist spends 2,715 USD on average.
Ultimately, total losses for 4 months will exceed 100 million GEL.
At a glance, this 100 million GEL isn’t much, however, the analysis of the year on year indicators prove that incomes will decline by about 10%. Naturally, the burden on the whole economy will decline.
Regretfully, this is the price that the country has to pay for the safety of its population. I hope Italy will not be included in this list, where multiple cases of infections were registered over the past few days. We should also take into account that the flight ban alone cannot fully neutralize all the risks. In short, we are facing very serious problems”, Charaia noted.
As explained by Maia Murachashvili, the founder of the tourism company operating on the Israeli and European markets, there are expectations that the inflow of tourists from Israel will dramatically decline, and many bookings will be cancelled.
“Israeli tourists also hesitate on whether to visit Georgia or not. They refrain from making advance payments, and we expect a wave of cancelled bookings. Here, the season starts in April, and now we have an unforeseeable situation. If the virus’ spread picks up pace, then the April bookings will also be cancelled, and this process will damage the first half of the season. We had the same situation after the Russian flight ban in June 2019, when we had to find alternative markets, she noted.
Everybody understands that these developments will bring economic losses. All travel companies and hotels are waiting for the travel season. Naturally, the industry will face losses”, Maia Murachashvili said.
As noted by Shalva Alaverdashvili, the founder of the Hotels and Restaurants Federation, the most active phase of arrivals from Iran was expected to start in mid-March. However, this year we will have lower activity, and the negative economic effects are inevitable. Nevertheless, the authorities have taken the right decision, and determined the correct priorities amid the current challenges, he added.
“Many Iranian bookings after March 16 were cancelled. This period was expected to set a record for major inflows from Iran, because the Iranian New Year Novruz Bayram is marked. In this period, all hotels used to work at full capacity. This year, business will shrink. The flight ban with Iran will start a negative trend, but there is the risk that the coronavirus spreads, and no economic benefits can be allowed us to ignore the safety of our citizens, even one of the lives of our citizens. Therefore, we understand this decision”, Shalva Alaverdashvili noted.
As reported by the Georgian authorities, the highest risks for coronavirus spread is in Iran, apart from China. The authorities in Iran are taking all possible efforts to prevent the spread of coronavirus and carrying out the screening of those leaving Iran. Nevertheless, the Georgian authorities have taken a decision to ban direct flights with Iran. Furthermore, on February 26, the Georgian Health Ministry confirmed the first virus-infected from Iran, and trying to cross the Georgia-Azerbaijan state border. As a result, the Georgian government took a decision to ban land communications with Iran.