Russia conflict hits emerging Georgia tourism trade

TBILISI (Reuters) - The Adamanti Hotel near Georgia’s Black Sea coast was full of tourists in early August when war broke out between Russian and Georgian forces in South Ossetia to the northeast.

Russian soldiers drive an armoured vehicle in the village of Tirdznisi near Gori some 50 miles west of Tbilisi September 2, 2008. REUTERS/David Mdzinarishvili

But when Russian soldiers pushed into Georgia and moved towards the port of Poti, just 20 km (12 miles) up the coast, the tourists fled and now 30 of the hotel’s 33 rooms are vacant.

“August and September are usually our best months,” said hotel manager Maia Gorgashvili. “But we are practically empty now. We can only hope people will return now that the fighting has stopped.”

Boasting snow-capped peaks, over 100 km of beautiful coastline and one of Europe’s largest national parks, Georgia was once a top holiday destination for the Soviet elite.

Political instability following independence in 1991 weighed on Georgia’s image abroad for over a decade, but in recent years the country has rebounded and become one of the world’s fastest growing tourist destinations.

Statistics show the number of foreign visitors has tripled over the past five years, hitting a peak of over 1 million last year and contributing about 4.5 percent of total gross domestic product (GDP), according to Beka Jakeli, the head of the government’s tourism department.

After hiring public relations firm Saatchi & Saatchi and launching an aggressive marketing campaign last year centered on the slogan “Europe Started Here,” the pro-western government of President Mikheil Saakashvili had been targeting a further rise in foreign visitors of 30 percent in 2008.

But Georgia now faces a daunting challenge to prevent the brief war and continued presence of Russian troops in some parts of the country, from leading to a sharp, long-lasting downturn in tourism and knock-on impact on the broader economy.


“The conflict has clearly had a significant impact,” Jakeli said. “Some people are very pessimistic and think we’ll need several years to recover. We hope we can bounce back in 2009.”

Tbilisi-based Caucasus Travel, a market leader that has been arranging tours in the region since 1990, had to evacuate close to 300 French, German, Dutch and Japanese tourists when the fighting broke out in early August.

Since then 97 percent of all its group tours to the country have been cancelled, dooming the peak months of August and September, which it says normally make up about 60 percent of a full year’s business.

“Some large operators in Germany have told us it will take years for them to send tourists to Georgia again,” said Keti Aspindzelashvili, who focuses on the European market for Caucasus Travel.

She said “eco-tourism” would be hit particularly hard because fires sparked by the war had destroyed large swathes of the massive Kharagauli National Park, known for its rare flora and fauna.

The vast majority of foreign tourists to Georgia come from neighboring Armenia, Azerbaijan and Turkey.

But a growing number have traveled from Britain, Germany, Japan, the Netherlands and the United States in recent years, prompting major hotel chains like Kempinski, Hyatt and Radisson to launch projects in Tbilisi and Batumi on the Black Sea.

These western tourists are the ones most likely to stay away in the wake of the conflict.

Ride World Wide, which has been arranging horse-riding trips for British clients through the rolling hills of southern Georgia for the past four years, says interest in the country reached a new peak last year.

But the London-based tour operator has had to cancel two tours scheduled for August and September and is unsure when demand might return.

“It’s always been a trip for the more adventurous. Georgia is a wonderful, unspoiled country with friendly people and amazing scenery,” said Ride World Wide director Nigel Harvey. “One can only hope interest will return.”


The Black Sea coast region of Ajara is expected to suffer most from the drop in tourism.

But the wine region of Kakheti in the east, the mineral-water town of Borjomi in central Georgia as well as more remote areas that have benefited from investment to boost tourism infrastructure will also fall victim.

Dan Berkshire has spent the past year putting some $800,000 from U.S. government aid agency USAID to use in Mestia, a stunning mountain town in the north, and Abastumani in the southwest, site of a Soviet-era observatory that is being fixed up for astronomy enthusiasts.

“Both spots had really good possibilities and they still do, but it will be a while before tourists return to Georgia and enjoy them,” said Berkshire, chief of party at International Executive Services Corp in Tbilisi.

He expects money that was flowing into tourism promotion will be redirected to reconstruction efforts.

USAID has said the Georgian government is seeking up to $2 billion in aid to repair infrastructure, mainly military, that was damaged by Russian bombing raids and ground offensives.

“International tourists need a degree of confidence and that isn’t there right now with Russian troops still in the country,” said Berkshire. “It’s really too bad because Georgia has fantastic tourism potential.”

(Additional reporting by Niko Mchedlishvili)

Writing by Noah Barkin; editing by Tony Austin