YEREVAN, JANUARY 10, ARMENPRESS. According to statistics provided by the Georgian National Tourism Administration (GTNA) 4,703,945 tourists visited Georgia in 2022, more than 80% of them were Europeans and 4.4% were citizens of the Middle East countries (Figure 1).

Figure 1 - Total number of tourists visited Georgia in 2022 (by donor regions, %)

Source: Georgian National Tourism Administration, 2023

In the overall picture of inbound tourism, the share of visitors from the Middle East is very small but dynamics are important in this case. At the end of 2022, Georgia has received 208,341 tourists from the Middle East, which is 15 times more than ten years before (Figure 2).

Figure 2 - Dynamics of the tourist flow from the Middle East countries to Georgia in 2012-2022

Source: Georgian National Tourism Administration, 2023

Moreover, the increasing number of visitors from the region has surpassed pre-pandemic levels as the former Soviet republic hosted almost 160,000 visitors from the Middle East in 2019. Georgia is popular among tourists from the Middle East not only because of its scenic views, affordable hotels and relative proximity but also because of the growing availability of halal food and Arabic-speaking guides (Middle East Monitor, 2022).

The increase in the number of visitors from the Middle East has been mainly driven by tourists from the Arab states of the Persian Gulf, in particular from Saudi Arabia, which accounts for more than 50% of the total number of tourists from the Middle East (Figure 3). The number of tourists from Saudi Arabia in 2022 increased by 60% compared to the pre-pandemic year of 2019 amounting to 119,921 visitors (Table 1).

Table 1 - Dynamics of the tourist flow from the Middle East to Georgia in 2011-2022 (by country)

Source: Georgian National Tourism Administration, 2023

Saudi Arabia was among the top 10 countries providing the largest number of foreign visitors to Georgia while tourists from Israel and Turkey still outnumber those from Arabic-speaking countries (Table 2).

TOP 10 countries visited Georgia in 2019 - 2022

Source: Georgian National Tourism Administration, 2023

Some tourists from Gulf countries even spend several months on the Black Sea and in the country's capital - Tbilisi, which is now home to the bustling Arab quarter. The most popular period among foreign tourists is the timeframe of four months from July to October (Table 3).

Table 3 - Seasonality of inbound tourism in Georgia, the number of visits by month from the TOP 10 countries in 2021

Source: Georgian National Tourism Administration, 2023

 Middle East Institute of Gulf Cooperation Countries (GCC) Report on tourism in Georgia reveals that the country has become popular over the past decade for its promising business opportunities as well as inexpensive and convenient alternative to vacation in both winter and summer given that entry into Georgia is free for almost all countries – citizens of 107 countries do not require a visa (Middle East Monitor, 2022). See Table 4.

Table 4 - List of countries with visa-free entry to Georgia 

Citizens of many Middle East countries are allowed to visit Georgia at any time and for any period of time (Figure 3).

Figure 3 - Countries with different levels of visa-free entry to Georgia

 Source: (Cynthia, 2017)

Visa-free regime allows foreigners to stay in Georgia for up to one year. This means that many GCC tourists may visit Georgia again during that very year (Middle East Monitor, 2022).

In addition to the tourist flow from the countries of the Persian region there were also investment flows (mostly from the UAE) directed mainly to the hotel sector of Georgia which contributed to the sector’s development. Thus, in 2021 the total number of hotels and accommodation facilities in Georgia was 1,726, which is almost 70% higher than a year earlier. 99.3% of them belong to private businesses (Figure 4).

Figure 4 - Indicators of the Georgian hotel sector in 2021

Source: Sputnik Грузия, 2022

An important factor in the growth of the tourist flow from the Arab countries was the increase in the number of 3-3.5 hours direct flights to Georgia from various airports of the region: Dubai, Doha, Sharjah, Abu Dhabi, Riyadh, Jeddah, Dammam. This allowed Georgia to become an easily accessible, convenient and close destination. The price of a two-way ticket from the mentioned cities when booked 2 months before the date of departure is 265 - 399 Euros, the average price is 392 Euros (Hashem, 2021; Kiwi.com, 2023). See Table 5.

Table 5 – Direct flights from the leading airports of Saudi Arabia, UAE and Qatar to the international airports of Georgia and the cost of the flight for October 2023 (Euro)

Source: compiled by the author based on data from Kiwi.com, 2023

 Figure 5 – Georgia in the World Bank “Doing Business 2022” rating

Source: World Bank Group, 2023

Together with Georgia, the Top 10 was followed up by such countries as the USA, Singapore, Denmark, Norway and the UK. In 2019 the country ranked 6th (World Bank Group, 2023a).

ATTRACTIVENESS OF ARMENIA, COMPARATIVE ANALYSIS

Let’s see how the above-mentioned success factors for Georgia are manifested in Armenia and consider the possibilities of such success in Armenia.

1. Geographic location

Armenia is adjacent to Georgia (bordering in the north) so Armenia is located a little closer to the Middle East than Georgia. The flight from the cities of Saudi Arabia, UAE and Qatar takes 3-3.5 hours (Figure 7)

Figure 7 - Geographical location of Armenia relative to the Middle East

 Source: Altayer Travel, 2023 

Unlike Georgia, the Top 10 visitors' list to Armenia does not include any Arab country. This indicates the lack of attractiveness of Armenia for the latter (Figure 8).

Figure 8 - Number of tourists visited Armenia in 2021 and 2022 (by country)

Source: Ергнян, 2023

2. Visa-free regime - opportunity to stay up to one year in Armenia/Georgia for citizens of the Middle East countries

In total, citizens of only 45 countries are allowed to enter Armenia without visa and stay in the country for up to 180 days. This is more than two times less than in Georgia which allows citizens of 107 countries to do so (Table 4). Moreover, only citizens of two Middle East countries can enter Armenia without a visa - UAE and Qatar (Table 7).

Table 7 - List of countries with visa-free entry to Armenia and staying opportunity up to 180 days

3. Availability of direct and affordable flights

Unlike Georgia, in Armenia the number of direct flights from many airports of the region (Dubai, Doha, Sharjah, Abu Dhabi, Riyadh, Jeddah, Dammam) is less and they are more expensive. The price of a two-way ticket from the mentioned cities to Armenia when booked 2 months before the date of departure is 82 - 470 Euros while the average price is 454 Euros (Table 8 and Table 5).

Table 8 - Direct flights from the leading airports of Saudi Arabia, UAE and Qatar to the international airports of Armenia and the cost of the flight for October 2023 (Euro)

Source: compiled by the author based on data from Kiwi.com, 2023

4 and 5. Beautiful and picturesque places, developed infrastructure of ski resorts, availability of hotels

1. Tsaghkadzor. A small town and one of the most popular ski resorts in Armenia located 50 km northeast of Yerevan. This picturesque town has all the necessary conditions for those who love skiing and snowboarding. A cable car has been built on the ski slopes of Mount Teghenis. It has several stations and meets all European standards. The route is 30 kilometers long, and there are 7 ski lifts available for transportation of visitors. The winter sports area is located between the height of 1966 and 2819 meters above sea level (Arara Tour, 2023; Ski resort Tsaghkadzor - Skiing Tsaghkadzor, 2023).

The price for ski lift services and ski passes is as follows:

• Single ski lift ticket - 8 USD (3100 AMD);
• Ski pass in the form of a plastic card - 5 USD (2000 AMD);
• The card should be replenished: one day of skiing - 26 USD (10,000 AMD);
• 3 days of skiing - 75 USD (29,000 AMD);
• 5 days of skiing- 121 USD (47,000 AMD);
• One week of skiing - 155 USD (60,000 AMD) (Tsaghkadzor Cable Car, 2023).
• A ski kit rental costs about 11 USD (5000 AMD);
• Snowboard kit costs 15 USD (7000 AMD) (Arara Tour, 2023).

Most hotels of the resort offer free shuttle service to the ski slopes. The hotel infrastructure of Tsaghkadzor is represented by both new and modern (three-, four- and five-star) hotels as well as by hotels built in the Soviet era. Consequently, the price range also differs: for example, accommodation in a standard double room of luxurious Tsaghkadzor Marriott 5* starts at 130 USD (50,000 AMD). The prices of accommodation in 4* hotels start at 65 USD (25,000 AMD); in 3* hotels - at 40 USD (15,000 AMD). There is also another option - renting apartments for 2-7 people (78-170 USD/30,000-65,000 AMD) or cottages for 6-16 people (125-312 USD/48,000-120,000 AMD) (Тонкости Туризма, 2023b).

2. Jermuk. This is a small city located 180 kilometers from Yerevan and surrounded on three sides by mountains. Jermuk was a Soviet hydrotherapy resort that had lots of mineral springs with water composition identical to that of Karlovy Vary. The city began to develop as a ski resort in the early 2000s (Rider Skill, 2021).

It was then when the cable car and ski slopes were built according to all international standards. The ski slope for beginners is 1600 meters, and slope for experienced ones - 1400 meters long.

• A complete ski kit rental is 13 USD (5000 AMD);
• Snowboard kit rental is 21 USD (9000 AMD);

            Prices in hotels in Tsakhkadzor are influenced by two factors: the level of the hotel itself and the remoteness from the cable car. All hotels can be divided into three types: new hotels, renovated hotels and cottages (Arara Tour, 2023).

New hotels meet all European standards, provide good service and fairly high prices (hotels like Marriott Tsaghkadzor, Kecharis, World of Gold, etc.). Renovated hotels also please customers with good service and decent conditions. However, prices here can be attributed to the "golden mean" (Arara Tour, 2023).

3. Akhtamar (Sevan). This developing ski resort is located in the town of Sevan at an altitude of 1900 meters above sea level and only 12 kilometers from Yerevan. Although Akhtamar is inferior to other ski resorts in terms of popularity and development of ski infrastructure, it is dynamically developing. In Akhtamar, there are several ski slopes of different difficulty levels designed for both children (gentle tracks) and super advanced skiers (black tracks, 1.2 kilometers long). The total length of the slopes is 2.5 kilometers (Guide-Tours, 2021).

• Day ski pass - 10 USD
• Equipment rental - 10 USD

         As for accommodation, there are different options. It is possible to rent a house, a cottage or a villa for 20, 70-100 and 200 USD respectively (Отдыхатели 2023).

          Armenia has much less offers for winter activities compared to Georgia. In addition, the infrastructure of the Armenian ski resorts is inferior to the Georgian ones.

6 and 7. Interfaith Tolerance – intolerance for religious discrimination and the growing availability of halal food and Arabic-speaking guides

            Armenia is one of the few Christian countries in the world that is almost totally surrounded by Muslim countries. Despite religious differences, the locals are quite warm and friendly towards their Muslim neighbors, so maybe that is the reason that lately Armenia has become a popular tourist destination for Arab tourists. They are especially interested in wintertime as they are deprived of the opportunity to enjoy winter sports in their countries due to hot climatic conditions. Also, during recent years many Arabic restaurants have been opened in Yerevan offering to its guests familiar and ordinary food.

Usually tourists have no difficulties regarding the language, as many Armenians speak at least one foreign language. Nearly 80% of young Armenians speak English, and some of them even speak Arabic and Persian (Arara Tour, 2023).

However, the Arabic language is not so common in Armenia and the number of guides who speak Arabic is much lower than in Georgia.

8. High level of safety

According to the Numbeo Crime Index (July 2023), Armenia is one of the safest countries in the world. It ranks 6th in the world in terms of safety with Crime Index 21.6 and Safety Index 78.4! These are very high figures, and they are much higher than those of Georgia which ranks 20th (Table 6). In terms of safety Armenia is a much better tourist destination than Georgia (Numbeo, 2023). 

9. Business opportunities 

            As mentioned earlier, one of the reasons for the popularity of Georgia among Arab tourists is the opportunity to develop businesses in the country: tax incentives, government support for foreign investment. Unfortunately, in this respect, Armenia is significantly inferior to Georgia. Thus, in the World Bank rating (2022) it holds the 47th position while Georgia ranks the 7th (Figure 9 and Figure 5).

Figure 9 – Armenia’s rating position according to the

World Bank “Doing Business 2022” Report

 Source: World Bank Group, 2023b

10. Friendly and hospitable atmosphere for tourists along with government support for tourism

Just like Georgia, Armenia is famous for its friendly and hospitable attitude towards guests and visitors, but according to representatives of the industry, the state support for attracting tourists to Armenia should be expanded. According to industry participants, the state should take a more active and deeper part in investment projects aimed at industry’s development, opening and promoting new directions and sites taking on the key roles of the main investor, manager and guarantor of investments (Петросян, 2016).

POTENTIAL SOLUTIONS TO ATTRACT TOURISTS FROM ARAB COUNTRIES TO ARMENIA

In the comparative analysis, we showed the areas on which Armenia should focus its efforts to attract more tourists from the Middle East. The results of the assessment are presented in Table 9.

Table 9 - The level of development of key factors of ski tourism development in Georgia and Armenia (comparative table)

                               Source: compiled by the author based on analysis

 The table shows that Armenia should focus its efforts on 6 areas:

1. Expand the list of countries with visa-free entry to Armenia.

Today, only citizens of 47 countries can enter Armenia without a visa and stay here up to 180 days. Our suggestion is to include more Middle East countries in the visa-free entry list: it is especially crucial to include first of all Saudi Arabia, and then Oman and Kuwait. Besides, we recommend considering the possibility of including more European countries and developed Asian countries such as China, South Korea, Malaysia and others. At the first stage, the citizens of these countries should be allowed to stay in Armenia for 180 days. Later, after assessing the effect of that measure (finding out citizens of which countries began to visit Armenia more often), the number of days of stay for some countries could be increased up to 360 days.

2. Increase the number of direct flights from leading international airports of the Middle East. Launch low-cost carriers for certain directions

Today, only 4 airports in the UAE and Saudi Arabia have direct flights to Yerevan: Dubai, Abu Dhabi, Sharjah (UAE) and Doha (Qatar/Saudi Arabia) while there are no direct flights from Riyadh and Jeddah (Saudi Arabia) at all. It is necessary to establish direct flights from Riyadh and Jeddah and, in general, increase the frequency of air communication with the cities which already have those flights.

It is also needed to provide for the possibility of subsidizing some part of the air ticket price, since the average price of a two-way flight from the UAE or Saudi Arabia to Yerevan is 454 Euros, while in Georgia the average ticket price is 392 Euros - despite the fact that Armenia is geographically a little closer to the region.

Another effective solution to the problem could be launching low-cost flights involving low-cost airlines.

3. Develop other destinations, improve and expand tourism content, attract more younger tourists and increase hotel affordability

There is a need to reconsider the restrictive and overly exclusive approach of the state in choosing directions for tourism development. For a long period of time, the development of some specific tourist sites was only supported, while others were forgotten and ignored. Popular destinations among tourists are Garni, Geghard, Sevan, Tsaghkadzor, Dilijan and others. Many other equally interesting historical and picturesque places just went unnoticed and undeveloped (Гостиничный бизнес в странах СНГ: Армения и Беларусь, 2021).

According to tourists, the proposed destinations and tour packages do not change over time, so after a couple of trips around the country there are no places left to visit. The reduction in the number of tourist sites and destinations has led to significant damage to many historical and cultural sites that are out of scope. For example, the village of Koghb that teems with medieval monuments such as the "Tvaraeghtsi" basilica, is in a dilapidated condition. These two problems – the limited choice of sites and tourist destinations as well as the dilapidation of many historical and cultural sites – are the key issues for the quality development of tourism in Armenia (Starr, 2023).

Armenia should expand the set of tourist proposals for both winter and summer recreation by considering the development of forgotten but no less beautiful tourist destinations as well as developing a policy of their promotion.

It is also important to provide for the development of entertainment infrastructure for younger tourists. Unfortunately, today Armenia is perceived as a tourist destination for the elderly. As shown in Figure 10, almost 60% of Armenia's inbound tourists belong to the 36 - 63 and 64+ age group.

Figure 10 - Segmentation of Armenia's inbound tourists by age groups (2016-2022)

Source: Ministry of Economy of the Republic of Armenia, 2023

Young tourists aged 18-25 make up only about 8% of all tourist flows. Unfortunately, as many experts say, Armenia is not keeping up with modern tourism trends. Young people under 25 who have visited the country say that after visiting the main attractions and having tasted the unique local cuisine, there is nothing else to do in the country. There is absolutely no development of the leisure and entertainment industry for young people (Ministry of Economy of the Republic of Armenia, 2023).

Another important step is the development of hotel infrastructure on different levels of service in cities and destinations other than Yerevan. According to the data of the Statistics Committee, as of the end of 2019, 769 accommodation facilities were registered in Armenia (with a total fund of 11,348 hotel rooms). 410 of them were located in Yerevan (5,427 hotel rooms). In 2021, there were already 915 accommodation facilities (Table 10).

Table 10 – Number of hotels in Armenia and Yerevan (2019-2021)

Source: (Radar Armenia, 2022)

Most of the accommodation facilities in Armenia are concentrated in the main tourist centers - Yerevan, Tsakhkadzor ski resort, Dilijan balneological resort, Jermuk resort, Tatev tourist complex and in the surroundings of Lake Sevan. The capital of the country has the highest concentration of 4-star and 5-star accommodation facilities with a high level of service.

Therefore, we consider it critical to develop hotel infrastructure in other tourist destinations which, as noted above, need to be developed and promoted in the future in order to achieve diversification of the tourist offer to attract more tourists from the Middle East and young people in general.

4. Teach the staff and guides Arabic language, expand the availability of halal food

First, this initiative should be supported by the state. Later, with the growth of the tourist flow from Arab countries, businesses will be able to completely take on the implementation of this task considering the profitability of such an initiative.

            5 and 6. Create conditions and investment opportunities for foreign businesses and expand government support for the industry

Considering the example of Georgia, we've seen that a stable economy, a sound investment policy and tax incentives for business could make the country number 7 in the world in terms of attractiveness for doing business. In our opinion, to create such conditions in Armenia, a set of measures and programs is required. The development and implementation of those measures and programs will demand involvement of various ministries and departments, including the Ministry of Economy, Tourism Committee, Ministry of Finance, Ministry of Territorial Administration and Infrastructures, etc.

Preferential tax policy is one of the attractive measures for investors, its effective measures include: reducing tax rates on business income, tax holidays and/or subsidizing part of the losses caused not by the actions of businessmen but by economic instability in the country.

Varazdat Nersisyan