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Tourism: A Path to Competitiveness for Georgia

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Tourism was one of the sectors featured at the 15th Annual Conference of the America-Georgia Business Council, which was held on December 12th, 2012 at the St Regis Hotel in Washington, DC. Hon. George Kvirikashvili, the Minister of Economy and Sustainable Development, was one of the featured speakers.The tourism presentation was included as part of a panel on Competitive Business Sectors of Georgia.

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Tourism: A Path to Competitiveness for Georgia

  1. 1. Scott Wayne, President of SW Associates, a Washington, DC-based internationaltourism development consulting practice, was asked by the America-GeorgiaBusiness Council to present tourism as a possible key for competitiveness inGeorgia. 1
  2. 2. The America-Georgia Business Council and SW Associates (SWA) developed a National TourismDevelopment and Investment Plan and Strategy in 2007-2008, which was being implemented untilthe war with Russia started. The Strategy was funded by the US Trade and Development Agency.The Georgia Tourism Development and Investment Strategy was driven by the vision of theDepartment of Tourism and Resorts to establish the country as a uniquely Georgian, high qualitysustainable and competitive international and domestic destination.To achieve sustainable growth, the Strategy specified six Strategic Objectives:1. Attractions and Experiences – Revitalize, protect and improve existing attractions and identify newattractions to meet market demand.2. Marketing, Promotion and Information – Motivate tourists, tour operators and media to visitGeorgia and influence their decisions before and while they are traveling.3. Destination Management - Improve infrastructure and visitor services. Conserve naturalenvironment and cultural heritage through sustainable tourism development.4. Create a Well Trained Workforce - Create a well trained workforce that becomes a resource hubfor the region.5. Leadership and Management - Foster a proactive organization and management culture in theDOTR and with other agencies.6. Financial Resources and Investment - Create, sustain and promote a positive climate for tourisminvestors.The central recommendation for sustainable growth and investment in tourism is to establish the“Georgian Way.” The Georgian Way 2
  3. 3. provides a core Tourism Route based on hub and spoke destinations and linking to neighboringcountries for regional offers. The “Way” is comprised of six key destination hubs: Sighnaghi/Telavi,Tbilisi/Mtskheta, Gori, Kutaisi, Borjomi/Bakuriani, and Batumi/ Kobuleti. 2
  4. 4. Why Tourism as a key economic driver for Georgia? It is one of the world’s fastestgrowing industries. On December 13th, 2012, the world welcomed its one billionthinternational tourist! Tourism is a major source of global employment – over 254million jobs, according to the World Travel & Tourism Council. 3
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  6. 6. The core of the travel and tourism industry – accommodations, recreation, transport,etc – is just the tip of the iceberg in terms of full impact of tourism on an economy.Beneath the tip are all of the other sectors that are impacted. With increasedtourism demand, there is increased demand for the many goods and servicesshown beneath the tip of the iceberg.
  7. 7. These many goods and services can be seen in the example of a typical hotel.From flower sales and services to cleaning services and supplies to accountingservices to food purchases at the market on and on. All of these purchases aremade because of tourism demand. Without tourism, there would be far fewerpurchases of these.I got a bit carried away with this slide! 6
  8. 8. International arrivals have been steadily increasing in Georgia with especiallydramatic growth in the past three years. This was based on data received from theGeorgia tourism department on December 10th, 2012. 7
  9. 9. So it is not surprising to see quite a number of impressive developments inGeorgian tourism. 8
  10. 10. This demand is being driven by a number of international trends – increased interestin authentic experiences, cultural tourism, culinary and wine tourism, ecotourismand adventure travel – all areas that are strengths for Georgia. 9
  11. 11. Currently, most of Georgia’s international arrivals are concentrated in only fivemarkets with only 10% from the rest of the world. This 10% spends more thandouble what visitors from the top five markets spend. So 10% of the arrivals accountfor most of the tourism spending in Georgia. 10
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  13. 13. Nearly every market, including the 10%, grew in 2012 compared with 2011.However, nearly every region grew in 2012 except for parts of the Middle East andNorth Africa. There are more people traveling, but they are also traveling to moredestinations. 12
  14. 14. The World Economic Forum’s Tourism Competitiveness Index does invite somequestions on methodology. All three of these countries lost international tourists in2011-12 due to civil conflicts and instability. And most of Albania’s visitors comefrom neighboring countries. However, the Index is regarded as something of abenchmark for tourism administrations. 13
  15. 15. As of mid-December, this was the Georgian Tourism Department’s home page. I’mnot sure when the change occurred, but it has been better than this. Unfortunately,this does not engender a great degree of confidence among prospective visitors andinvestors. 14
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  17. 17. Georgian tour operators are recognizing these markets and seeking to attract morevisitors. While they can certainly see some success for their individual companies,without broader industry-wide and market coordination, it is difficult to “move theneedle” of Georgian tourism in a stronger, more positive direction, a direction thatwill shift the balance of tourism spending towards higher spending visitors. 16
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