Summary: Tourism receipts for the first quarter of 2023 were US$795 million, compared to US$808 million for the same period in 2024, an increase of 1.5%.
The 1.5% growth is negligible and can be considered as zero growth when inflation is taken into account. In the same period, the number of visitors increased by 8.6%, of which the number of tourists increased by 11%. The latest information on transactions made with foreign bank cards dates back to December 2023. The 36% growth does not match the first quarter of 2019 either, ruling out the possibility that the Minister unintentionally mixed up the data.
Despite the numerically correct data, FactCheck rated Levan Davitashvili’s statement as “half-true” because he represented effectively zero growth as a 36% increase.
Analysis: At a June 17 post-government briefing, Minister of Economy and Sustainable Development Levan Davitashvili said (starting at 1:23) while discussing tourism: [from tourism] First quarter imports from the tourism sector exceeded $800 million, also a record high and a very high 36% above the 2023 figure.”
In the first quarter of 2024, 1.3 million international visitors visited Georgia, of which 938,000 were tourists. Tourism revenues amounted to USD 808 million, up only 1.5% compared to the same period last year, instead of 36%.
Signs of tourism recovery emerged as early as 2021 amid the pandemic, with the pace of recovery accelerating in 2022 and 2023. However, tourist numbers have not reached 2019 levels.
The situation is different when it comes to tourism receipts: in 2022, nominal receipts from the tourism sector exceeded pre-pandemic levels, and in 2023, real receipts also exceeded pre-pandemic levels.
Tourism receipts doubled in the first quarter of 2023 compared to the same period last year. The reason for such a rapid growth is that COVID-19 regulations were still partially in place in early 2022. Growth fell to 35% in the second quarter, 5% in the third quarter, and a 13% decline in the fourth quarter.
Figure 1: Tourism receipts (million US dollars)
Source: National Bank of Georgia
The growth rate in the first quarter of this year can be considered as zero growth when inflation is taken into account.
The 36% growth rate stated by the Minister of Economy and Sustainable Development is not true, and it is difficult to determine what else Levan Davitashvili meant (if anything).
Compared to the pre-pandemic period, the growth rate would be 40%. The latest information on foreign bank card transactions goes back to December 2023. Information for the first quarter of 2024 is also not available by sector (transport, accommodation and catering).
Moreover, 36% does not even apply to the growth rate of tourist numbers. In the first quarter of 2024, the number of international travelers increased by 7.6% year-on-year, while the number of visitors increased by 8.6% and the number of tourists increased by 11%. Compared to the first quarter of 2019, the number of tourists increased by 6.4%. As for the number of international travelers and visitors, they continue to decline by 20% and 13%, respectively.
Based on past experience, the first quarter is the quietest in terms of tourism: from 2011 to 2019, 17% of revenues were generated in the first quarter. The third quarter, the busiest, accounted for 37%.
Some representatives of the tourism industry claim that part of the bookings were canceled. They blame this fact on the “Russian Law” (which came into force on April 3, passed its first reading on April 17, its third reading on May 14, and on May 28 the presidential veto was overturned by parliamentarians). Individual statements are only part of the picture, and without statistical information any numerical inferences are not justified. It is possible that the “Russian Law” reduced the number of potential tourists, but the growth rate was maintained. For example, when under other circumstances the number of tourists should have increased by 10%, it actually increased by 8%, and revenue increased by 7% instead of 12%. Statistics for April-June will be released in the third quarter.
Whatever growth is recorded in the second or third quarter, it will not change the fact that revenue growth in the first quarter was only 1.5%, not 36%.Despite the numerically correct absolute data, FactCheck rated Levan Davitashvili’s statement as half-true, as he characterized practically zero growth as a 36% increase.
Topic: Economy
Author: Giorgi Elizbarashvili
