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PM: Georgian tourism saw $60 million loss in July

By Tea Mariamidze
Tuesday, August 13
Georgian Prime Minister Mamuka Bakhtadze says that due to the Russian ban on direct flights with Georgia, the tourism sector saw around $60 million loss last month.

“It was estimated that the tourism sector saw a $ 60 million loss compared to the previous year only in July. In June we had a 40% increase in tourism only in Adjara compared to the same period of the previous year, but the steps we have taken make me believe we will return to the strong dynamics we had,” the PM said. He added it is important to support small and medium-sized businesses and promote them.

Bakhtadze said the government has set up two programs that, to his mind, will be sufficient for small and medium-sized entrepreneurs in the tourism sector to tackle the problems they have encountered in the short term.

He referred to the initiatives, announced in mid-July, according to which, the government will assist the tourism sector by partially paying their bank loan interests. The second initiative is a credit warranty scheme that will be directed to those entrepreneurs employed in the tourism sector.

The new program of grants will be launched starting September for the owners of small and family-type hotels. As for co-financing interest rate of bank loans, the Ministry of Economy works on specific criteria together with the Ministry of Finance. The service will be utilized by the “Produce in Georgia” project.

“As for the medium-term perspective, I am sure we will bring back the positive dynamics we had in the tourism sector,” he added.

The National Bank of Georgia (NBG) said that in July 2019, the Georgian economy received $ 67 million income from Russian tourists.

NBG noted that Georgia received $ 111 million income from Russian tourists last year, which is $ 44 million less this July. Consequently, as a result of the Russian ban on flights with Georgia, the country saw $44 million loss last month.

The estimates made by the NBG correspond to the ones made by the Georgian Tourism Administration (GNTA). Mariam Kvrivishvili, GNTA Head stated the same as the NBG – the country saw $44.3 loss in July due to the Russian ban.

On June 21, 2019, Russian President Vladimir Putin signed a decree banning Russian airlines from flying to Georgia from July 8 in response to anti-Moscow rallies in Tbilisi.

Following of the rallies in Georgia, the Kremlin had said the inward ban was to “ensure Russia’s national security and protect Russian nationals from criminal and other unlawful activities” after the large-scale rallies were launched in Georgia following the arrival of Duma MPs in Tbilisi Parliament on June 20.

To tackle the existing challenges in the tourism field, the government also activated marketing campaigns abroad, saying it will contribute to launching new flights to Georgia.