Georgia’s current tourism offering isoriented toward low-spending neighboring marketsand,although there is growth in high-spend global markets,the share is still very small. The majority of internationalvisitor trips are from Georgia’s neighboringcountries—Russia, Azerbaijan, Armenia and Turkey. Thisstrong regional footprint is partly attributable toGeorgia’s reputation during Soviet times as a recreationaldestination. Proximity, low prices, familiarity and languagehave contributed to this strong position. However, ofGeorgia’s top 15 source markets, tourists from Azerbaijan,Armenia and Turkey have the lowest average total tripexpenditure and make the shortest trips. Although Georgiahas seen very strong growth from China and India, arrivalsto Georgia from the top global tourism source markets1 in2018 represented only 7.3 percent of arrivals to thecountry. Georgia’s government is targeting high-growth,high-spend source markets. In 2015, the Government ofGeorgia (GoG) launched “Georgia Tourism 2025”; a 10-yearvision and strategic plan for increasing the value andimportance of tourism for the benefit of the country’seconomy and ultimately its citizens. The plan—developed withsupport from the World Bank Group—included infrastructuredevelopment, country promotion, service quality improvementand tourism product diversification. Building on this plan,in 2018, GoG developed a marketing, branding and promotionalstrategy to communicate Georgia’s brand positioning, visualand verbal identity guidelines, and promotional objectivesand target high growth, high-spend source markets. AsGeorgia’s source markets evolve, new GVC structuresnecessary to serve those markets will alsoemerge. GoG hasidentified 26 key source markets based on accessibility,economic factors, culturalrelations, and other factors suchas the size of diaspora, historical ties and languagebarriers.A shift towards these new markets will alsocorrespond to changes in consumer behavioral trends andtastes. This, coupled with global industry trends will seenew value chain structures emerge, emphasizing activitieswith differing competitive forces, and presenting differingopportunities to create and retain value. Georgian firms mayneed support to respond to changes in emerging tourism GVCsand compete for higher-value-added activities. The reportasks and answers two questions: i) How are emerging trendschanging the structure of Tourism GVCs and how can Georgianfirms benefit from these changes? ii) What policy reforms,capital investment or skills development is needed toincrease Georgia’s value chain competitiveness in each ofthese key tourism offerings?
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