EurasiaNet Business & Economics - Georgia: Build It, and They May Come

BUSINESS & ECONOMICS

GEORGIA: BUILD IT, AND THEY MAY COME
Paul Rimple 9/28/07

Georgia’s got the beaches, it’s got the mountains. The food and the wine. But developing the infrastructure for tourism -- cited as key to Georgia’s economic revival -- is a challenge as high as any of this South Caucasus country’s scenic peaks.

During the Soviet era, Georgia attracted 4 million tourists a year, according to routinely cited estimates -- an unverifiable number nearly as high as the country’s current population. Fast-forward through civil strife, economic collapse, separatist conflicts and rampant corruption, and it’s no surprise that tourists have stayed away. According to official data, the tourism industry is only now beginning to pull out of its nose-dive.

The latest data from the Ministry of Interior reports a 76 percent increase in the number of non-resident visitors to Georgia between 2005 and 2006, roughly two years after the country’s reformist Rose Revolution. [For background see the Eurasia Insight archive]. While some travel agents question that data, the noticeable stream of tourists from Israel and European Union nations suggest that a sizeable increase has occurred.

The trick is to keep them coming back. And to make Georgia a competitive option for travel.

The government has a twofold strategy -- get investors to put their money into the "Georgia brand," and to build infrastructure. "When Georgia is known as an investment brand, then we can focus on the tourism brand," commented the Ministry of Economic Development’s Department of Tourism head, Otar Bubashvili.

That tactic was on display at a September 25 tourism communications conference in Tbilisi where Prime Minister Zurab Noghaideli, speaking in English, put the emphasis on reforms likely to attract foreign investors -- from tax elimination to processing time for imports and exports. "We clearly understand that this is only the beginning, and we have many things left to do," he told participants.

A competitive market, however, still lags behind the intentions. Despite new airports for Tbilisi and the Black Sea resort town of Batumi, and additional incoming flights, travel to Georgia is costly. Current round trip London-Tbilisi tickets start at $800.

Accommodation is another hurdle. Rates for a standard hotel room can go well over $100 per night in Tbilisi and are similarly steep in Batumi, a fact that has prompted many Georgians to travel abroad, President Mikheil Saakashvili noted in August. Those prices plunge dramatically in the regions, but tourists who do not speak Georgian or Russian -- an increasingly infrequently spoken language -- could find themselves at a loss.

For now, the Black Sea coast remains the main draw, with some 200,000 visitors so far traveling to Batumi in 2007, according to the regional Department of Tourism. The town is also a key spot for hotel development, with eight new hotels planned for 2008. A golf course and mountain spa are also in the works, according to officials. And after a two-year hiatus, flights from Tbilisi are again operational.

But the government’s goal is to get tourists to explore more remote attractions, as well, stresses Mariam Slowinsky, head of the International Relations Office in the Department of Tourism. A group of Georgian and American experts, funded by the United States Trade and Development Agency, are currently traveling the country to come up with a master plan for tourism development for Georgia’s far-flung and rough-living regions.

One of the most remote -- and awe-inspiring -- is the mountainous region of Svaneti in northern Georgia, along the border with Russia and breakaway Abkhazia. Access to the outside world comes via a single, crumbling road. A newly renovated airport is not expected to be working before next spring. Hotels do not exist.

Assistance, for now, comes primarily through a 5-million lari (roughly $3.02 million) program launched by the Ministry of Economic Development in June to provide small and medium-sized loans to tourism businesses throughout Georgia. The five-year program makes 1,000-50,000-lari (roughly $604 - $30,193) loans to businesses at discounted interest rates, and funds training in business and tourism management in several large towns and in areas off the beaten path.

The first of the program’s rural training seminars was completed in Svaneti’s regional center, Mestia, on September 14.

Zaur Chartolan, chairman of Mestia’s new Svaneti Tourism Center, a foreign donor-funded entity that trains guesthouse owners and certifies mountain guides, welcomes the ministry’s loan program, but isn’t sure how well it will work. "There’s a great interest among locals for the training, but people are afraid to take a loan because there’s no guarantee tourists will come," Chartolan commented. "In such a case, people won’t be able to pay the bank back."

Mestia Mayor Nino Japaridze claims that 12,000 visitors came to Svaneti this year -- more than a 10 percent increase over 2006. The data could not be independently verified.

Regardless, even a trickle of increased visitors is good news for Tea Japaridze (no relation to the mayor), a single woman whose only source of income is what she earns renting out two bedrooms. "If I can install a toilet here, I can probably attract more guests," she said.

The hope is that by tapping into the tourism market, other opportunities will appear. The training and loan program is expected to "set a trend that begins with tourism and then spread[s] to all sectors of society," said program coordinator Dmitri Japaridze.

That tactic is also behind the prominent government push to promote Sighnaghi, a picturesque hamlet in Georgia’s wine region of Kakheti. The government, according to Prime News, invested a reported 6.32 million lari (roughly $3.820 million) to turn the crumbling hillside village into a center for wine tourism. General Prosecutor Zurab Adeishvili was tapped to oversee the restoration process.

"It was a big job," stated Department of Tourism and Resorts head Bubashvili, "and it was done in a four-month period." Sighnaghi’s "debut" will be a wine festival, the town’s first, in late October.

Tourism officials concede that there is still a long way to go -- professionals to train and infrastructure to create. Establishing the Georgia brand for tourists "takes time," concedes the head of one regional tourism department.

Editor�s Note: Paul Rimple is a freelance reporter based in Tbilisi.

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