Study: How do travel and tourism benefit the Georgian economy?

Travel and tourism are vital industries in the Georgian economy. As well as its direct economic impact, the industry has significant indirect and induced impacts, shows the Travel and Tourism Economic Impact 2017 Georgia study by the World Travel and Tourism Council.

As the research revealed, the direct contribution of travel and tourism to Georgia’s Gross Domestic Product (GDP) in 2016 was 2.72 billion GEL or 8.1 percent of GDP. This is forecast to have risen by 10.1 percent in 2017.

The direct contribution of travel and tourism to the GDP is expected to grow by 6.6 percent to 5.69 billion (10.6 percent of GDP) by 2027, said the study.

Meanwhile, the total contribution of travel and tourism to the GDP (including wider effects from investment, the supply chain and induced income impacts) was 9.09 billion GEL in 2016 (27.1 percent of GDP) and is expected to grow by 9.4 percent in 2017.

It is forecast to rise by 6.4 percent to 18.58 billion GEL by 2027 (34.5 percent of the GDP).

What is the contribution of travel and tourism to employment?

Travel and tourism generated 122,000 jobs directly in 2016 (6.8% of total employment) and this is forecast to grow by 5.9 percent in 2017 to 129,000 (7.2% of total employment).

By 2027, travel and tourism will account for 165,000 jobs directly, an increase of 2.5 percent over the next ten years.

Meanwhile, the total contribution of travel and tourism to employment (including wider effects from investment, the supply chain and induced income impacts) was 420,500 jobs in 2016 (23.4 percent of total employment). This is forecast to rise by five percent in 2017 to 441,500 jobs (24.6 percent of total employment).

By 2027, travel and tourism is forecast to support 549,000 jobs (30.7 percent of total employment), an increase of 2.2 percent over the period.

Visitor exports and investments

Visitor exports are a key component of the direct contribution of travel and tourism. In 2016, Georgia generated 5.52 billion GEL in visitor exports. In 2017, this is expected to grow by 10.9 percent, and the country is expected to attract 2,982,000 international tourist arrivals.

By 2027, international tourist arrivals are forecast to total 8,056,000, generating a total expenditure of 12.06 billion GEL, an increase of seven percent.

Leisure travel spending (inbound and domestic) generated 61.7 percent of direct travel and tourism GDP in 2016 compared with 38.3 percent for business travel spending.

Leisure travel spending is expected to grow by 9.4 percent in 2017 to 4.91 billion GEL, and rise by 6.3 percent to 9.05 billion GEL in 2027.

Business travel spending is expected to grow by 11.1 percent in 2017 to 3.09 billion GEL and rise by seven percent to 6.08 billion GEL in 2027.

Domestic travel spending generated 24.1 percent of direct travel and tourism GDP in 2016 compared with 75.9 percent for visitor exports. Domestic travel spending is expected to grow by 7.4 percent in 2017 to 1.88 billion GEL, and rise by five percent to 3.07 billion GEL in 2027.

Visitor exports are expected to grow by 10.9 percent in 2017 to 6.12 billion GEL, and rise by seven percent to 12.06 billion GEL in 2027.

The research methodology said that the total contribution of travel and tourism to GDP is three times greater than its direct contribution.

This data reflects economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services (excluding commuter services). But it also includes, for example, the activities of the restaurant and leisure industries directly supported by tourists.