Georgia: Georgia's Wine Industry Driving Tourism Growth

Last Updated: 11 July 2018
Article by Alex Marrow

In August 2008, the prospect of Tbilisi as a thriving tourist destination was distant and improbable. Georgia was at war with Russia over the separatist regions of Abkhazia and South Ossetia, a conflict that displaced around 192,000 people. Now, the tourism industry is booming as more and more people come to this corner of the Caucasus.

The rise has been dramatic. Between 2008 and 2016, the number of international visitors to Georgia increased by just under 5.1 million, according to data from The World Bank. The Georgian National Tourism Administration reported that there were 7,554,936 international arrivals in 2017, an increase of 18.8% on the previous year.

But why? The absence of conflict is undoubtedly a reason, but it is also worth bearing in mind that the majority of tourism infrastructure only came into being after 1991 and Georgia's separation from the Soviet Union. Visit Georgia, one of the country's leading tourism companies, was only founded in 1997.

Of course, the country has three UNESCO World Heritage sites, Upper Svaneti, the Gelati Monastery and the Historical Monuments of Mtskheta. It has the Caucasus mountains, more than 1000 years of history, a Black Sea coastline and a culinary culture that has been shaped by centuries of invasions and changing rulers.

Arguably the most attractive and quickly developing feature of Georgian tourism is the wine industry. Wine has long been ingrained in Georgian society but wine production was traditionally a family enterprise, rather than the soft power export it is becoming.

The Kakheti region, east of Tbilisi, is the hub of Georgia's burgeoning wine industry, where around 80 different types of grapes grow. Tata Jaiani, communications manager of the Georgian Wine Association is very positive about the sector's development.

"There has undoubtedly been significant growth over the last ten years," she said. "The industry has developed very well. New wine cellars, hotels, restaurants and bars are appearing all the time."

Though the mountainous terrain makes producing wine in large quantities difficult, the country exported around 31.5 million bottles in the first six months of 2017, a 59% increase on the same period in 2016, which represents around US$70m of investment.

The wine tourism sector is one area that sets Georgia apart from its neighbours, in particular, Azerbaijan. The upward trend in visitor numbers is mirrored in Azerbaijan, although the number of tourists is significantly lower, peaking at 2,160,000 international arrivals in 2014. Azerbaijan has focused heavily on investing in its capital city, Baku, which has hosted a Formula 1 Grand Prix since 2016 and will stage football matches at the European Championships in 2020.

Funded in part by a crude oil field under the Caspian Sea, Baku is glitzy and exuberant, a place that exudes wealth. Tbilisi, in contrast, though home to a few peculiar architectural phenomena from the latter stages of Mikheil Saakashvili's tenure as president, breathes from its old town, and climbs up onto the surrounding hills.

Both countries are growing in popularity with Britons. Just under 30,000 British tourists arrived in each country last year. Azerbaijan Airlines fly from London Heathrow to Baku, but it is the introduction of budget flights to Kutaisi, Georgia's third city, that may explain the significant rise in tourism there.

The number of British visitors to Georgia increased by 39.9% in 2017, one of the largest percentage increases of any country in Western Europe. Wizz Air doubled its capacity in Georgia in October 2017 and will add more direct routes from Europe in May 2018.

Since Wizz Air opened this Kutaisi base in September 2016, the number of passengers has almost tripled. The airline's investment in Georgia stands at almost $200m and it has more than 70 direct employees in Kutaisi.

Wizz Air's chief commercial officer George Michalopoulos said: "Our investment is bringing benefits to the local community by creating direct local jobs and stimulating the job market in aviation and related industries, as well as boosting business links to other European countries."

Foreign investment through tourism and the rise in wine exports over the past decade have been crucial to cementing Georgia's status as a pioneer in the post-Soviet tourism space, setting an example that other countries can follow. If development continues as it has been, then there is no sign that the next ten years will be any different.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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