Arrivals
In Apr-22, total international arrivals stood at 214,644 persons – up 160.1% y/y and accounting for 39.0% of 2019 level. This growth was predominantly driven by increase in tourist arrivals recovering at 52.3% of 2019 level (up from 48.5% recovery in previous month). Same-day trips remain low recovering at only 16.0% of 2019 level due to persisting regulations of neighboring countries on a cross-border travel. Notably, tourism arrivals (reported by GNTA) capture only visitors leaving Georgia in reporting month and do not include migrants, moving to Georgia since Russia-Ukraine war started. Top country by arrivals was Turkey (16.8% of total), followed by Russia (15.6% of total), and Armenia (15.0% of total). While low, number of arrivals from Israel, Kazakhstan, Belarus and Uzbekistan surpassed 2019 levels.
Revenues
Tourism revenues stood at US$ 188.6mn in Apr-22 - up 3.8x y/y and accounting for 70.6% of 2019 level (down from 71.3% in previous month). Markedly, this tourism revenue figure captures also migrants impact (from Russia, Belarus, Ukraine), arriving in Georgia after Russia-Ukraine war started. We estimate, that around 80,000-120,000 visitors relocated in Georgia for longer term than regular tourists (from Russia, Belarus and Ukraine). Migrant inflow is best reflected on real estate market - rent prices in Tbilisi skyrocketed up by 71.6% y/y in Apr-22 and up by 21.7% vs 2019 level. Notably, due to migrant flow these 2 statistics – visitors and revenues - are not reflecting the same trends now. Russia accounted for 19.3% of Apr-22 tourism revenues, followed by Belarus (14.9% of total), Israel (11.1%), EU (11.0%) and Ukraine (10.3%). In 2022, we expect tourism revenues to recover to 75% of 2019 level in a baseline scenario, but we also do not rule out faster recovery (85%) considering migrants’ impact.
Migrant impact: landlords removing apartments from Airbnb due to superior long-term rental deals
Migrant impact was best reflected on Airbnb demand spike in Mar-22, as migrants booked Airbnb apartments upon arrival before finding longer-term options for renting in Apr-22: Airbnb demand recovery decelerated in Apr-22 (62.0% of Apr-19 levels) vs. Mar-22 (91.1% of Mar-19 levels), reflecting reduced listings of apartments on Airbnb along with shifting to long-term renting – number of apartments listed on Airbnb was down 10.2% in Apr-22 vs. Mar-22. Preference for long-term renting is also witnessed by NBG’s Real Estate Rent Index, which surged 71.6% y/y in Apr-22 (+21.7% vs. Apr-19) reflecting outsized demand on apartment rents.
Hotels benefited from tourist inflows
There was slight increase in hotel demand in Tbilisi medium and large hotels - Pos payments in Tbilisi medium and large hotels recovered at 65.7% of 2019 levels or up 114.3% y/y in Apr-22. Contrasting pattern in the recovery of Airbnb and hotel markets in Tbilisi can be explained by distinct nature of migrants and tourists. Migrants intend to stay for an extended period of time in Tbilisi. Therefore, they are willing to pay less for accommodation and secure a long-term rental deals with Aibnb landlords.
Recovery in hotel revenues was solid in Adjara in Apr-22 (Pos payments in Adjara recovered at 132.3% of 2019 level or up 115.6% y/y), explained by ongoing recovery of tourism as seasonal demand in Adjara usually starts acceleration in Apr-May period.