∘ Tamar Koblianidze ∘ Nino Sachaleli ∘
FACTORS, AFFECTING TOURISM DEVELOPMENT BEFORE AND AFTER COVID19

Annotation. The profitability of the tourism industry depends on several factors, for example on geographical location, season, resources, state regional policy and etc. The grouping, separating and analysing of these types of factors allow tourism to be discussed in a long-term period and give ability to people to be involved in the tourism to be more flexible and easily solve the problems that will appear later. Factors affecting the development of tourism may be the same with different countries, but there are factors that make one country different from another. The research answers the question of what factors and circumstances affect the development of the tourism business prior pandemics and now.

Key Words: Tourism development, tourism factors, tourism circumstances, tourism and Covid19 

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Tourism is a combined business including several main fields: hotel business; eating and drinking; travelling and entertainment business. Tourism itself has a huge impact on many aspects of socioeconomic life, but it is affected by various factors, according to Kobliadnize and Meladze [Koblianidze and  Meladze,, 2012]. tourism is influenced by Economical, Ecological, Technological, Political and Social Environment factors.

 In 2020 Covid 19 appeared to be the most important factor which had an unpredictable influence on the whole tourism industry. Most tourism experts do not expect international tourism to return to COVID level by 2023 and it has returned to the level, which was in 1990.

On behalf of sustainable development positive impact can be increased and negative impact decreased on tourism economy. Exactly, it should be managed such conditions what will take care of improving regional tourism features. At the regional level in tourism sustainable development an important role is played by various factors, what can be divided in two groups: as external (exogenous) and internal (endogenous) factors, separately can be named the factor of “time”, which depends on season. It should be mentioned that Georgia does not have tourism development strategies at regional level, which are very important, some regions with support of international organizations have agritourism development strategies, but this is not common. 

Scheme 1

Classification of factors affecting the development of tourism in the region

 

Source: Adapted from Nadirashvili G. Jangulashvili D. 2016 

External (exogenous) factors are of natural and anthropogenic origin and, in fact and provide conditions for sustainable tourism development in the region. From them, the area has a strong, multifaceted and contradictory impact on the development of regional tourism. Natural-climatic, geographical, historical-cultural factors have a significant impact on the development, pace and directions of regional tourism development, determine the potential and attractiveness of tourism. Ecology determines the degree of satisfaction of a tourist's needs according to the level of comfort in travel, the atmosphere of hospitality, safety, according to the level of sensation of a health impact.

The degree of impact of economic and financial factors on the quality of tourism development in the region is determined by the interrelationships and trends between tourism and the economy. The economic situation of the region determines the level of material and technical base and infrastructure. Social factors that can impact on tourism development in the region are the increase of the free time of the population (reduction of working time, increase of vacation time), which, along with increasing living standards, will lead to new tourist flows in the region. Demographic factors (population, gender structure, marital status, urbanization, staff qualifications, hospitality of the local population, etc.) constantly have influence on the development of tourism in the region. The development of tourism is also influenced by political and legal factors (political situation in the region, weakening of administrative control, unification of tax and monetary policy). The impact of technical and technological factors on the development of tourism in the region is important, which is related to scientific and technical progress and which create great opportunities for the development of new types of tourism services.

Internal factors (endogenous) have influence on the development of tourism in the region, they are formed and operate in the field of tourism, such kind of factors are: material and technical factors related to the development of accommodation, transport, catering, recreation, retail, supply and demand, distribution of tourism products; demand-supply on the tour product; deepening market segmentation; strengthening the role of coordination of tourism activities and limiting monopolization processes; Improving media and methods, public relations in promoting, advertising and sales of tourism products.

The impact of the pandemic on the travel tourism industry was significantly underestimated. Even now, policymakers and tourism practitioners do not have a full understanding of the scenarios and effects of the crisis, which will have an unpredicted impact on the tourism industry.

 Prior to the pandemic, according to International Tourism Highlights Report Travel & Tourism (including its direct, indirect and induced impacts) accounted for 1 in 4 of all new jobs created across the world, 10.6% of all jobs (334 million), and 10.4% of global GDP (US$9.2 trillion). Meanwhile, international visitor spending amounted to US$1.7 trillion in 2019 (6.8% of total exports, 27.4% of global services exports). According to the table 1, there are countries which are more dependent on tourism and covid 19 had a huge influence on them. 

Table 1

Tourism Dependency by Tourism contribution to GDP, WTTC 2019 (country names)

 

Source: Adopted from REBUILDING TOURISM COMPETITIVENESS Tourism response, recovery and resilience to the COVID-19 crisis 

Tourism is a critical sector of the international economy. In 2019, the tourism sector accounted for 29 per cent of the world’s services exports and about 300 million jobs globally 

WTTC’s latest annual research shows:

- The Travel & Tourism sector suffered a loss of almost US$4.5 trillion to reach US$4.7 trillion in 2020, with the contribution to GDP dropping by a staggering 49.1% compared to 2019; relative to a 3.7% GDP decline of the global economy in 2020.

- In 2019, the Travel & Tourism sector contributed 10.4% to global GDP; a share which decreased to 5.5% in 2020 due to ongoing restrictions to mobility.

- In 2020, 62 million jobs were lost, representing a drop of 18.5%, leaving just 272 million employed across the sector globally, compared to 334 million in 2019. The threat of job losses persists as many jobs are currently supported by government retention schemes and reduced hours, which without a full recovery of Travel & Tourism could be lost.

It is assumed that low skilled workers in all countries/sectors can become unemployed if demand for labor falls, though unemployed can try to find employment in other sectors within countries. High skilled workers can also move to other sectors, but adjustment occurs in wages. These assumptions reflect evidence in labor markets where low skilled workers tend to have a higher risk of becoming unemployed in case of an economic shock than higher skilled workers [Covid 19 and Tourism].

Domestic visitor spending decreased by 45%, while international visitor spending declined by an unprecedented 69.4% [Economic Impact Reports].

Domestic tourism has always been the salvation of tourist destinations that suffer external shocks and negative snapshots in the external demand of international tourists [Couto et al, 2020].

According to the article about “Determinants and Solutions for Improving the Efficiency of Tourism Business” [Nguyen et al, 2019], there are mentioned three main determinants: local policy; investment status & enterprise’ human source and the seasonal in tourism business, but there are other determinants of business efficiency. They are divided into 6 groups:

Group 1: (1) Prepared tours, (2) Price and service fees, (3) Social security.

Group 2: (1) Folk festival/fair, (2) Restaurant& food diversification, (3) Shopping centers, souvenir shops.

Group 3: (1) Infrastructure and means of transport, (2) Friendliness of natives.

Group 4: (1) Natural landscape, (2) Local geographic position, (3) Staying/relaxing place.

Group 5: (1) Quality of related services (bank, health…) and (2) Night activities.

Group 6: Climate and weather

There are various researches about the factors influencing tourism development, where were mentioned different factors (table 1), within the years these factors were repeated, but in 2020 there has appeared the strongest factor, which is named as Covid19 and global pandemic. It should be mentioned, that this kind of problems that caused to close the boarders for tourists as well as for the local citizens was new for the modern world and countries were not really ready for this. While doing the research it has appeared that in different years different kind of tourism influencing factors were mentioned and this information is given below in the table 1. 

Table 2

Factors and circumstances affecting the development of tourism

Note: authors, according to the collected data from Nguyen et al, 2019 

According to all above given information we have added some factors, which are also important and have discussed them on example of Georgia and they are rated on points from 1 to 3 (1 bad, 2 average, 3 well developed). 

Table 3

Factors affecting the development of tourism (example of Georgia)

The importance of the discussed factors is also proved in the expenses. It should be paid much attention to the factors, in which tourists are ready to pay. 

Table 4

Tourists’ Expenses in 2018 and 2019

Source: Authors, according International Visitors Survey Report of the National Tourism Administration 2018 and 2019 

Tourism industry has been playing one of the major roles in world economy, as well for Georgia in recent years. Corona virus significantly hit the sector. The world is facing an unprecedented global health, social and economic emergency due to the COVID- 19 pandemic. It is crucially important, that the sector adapt the feasible situation  Current tourism challenges that bring together experts and tourism professionals offer different provisions together with UNWTO. They assume it will cause a significant diversification of products and will promote some of the trendy types considering the new status quo. several trends will gain a popularity as per their content and possibility to provide social distancing and safe health standards. [Koblianidze and Tabidze, 2020].

Corona virus really appeared the most important factor in 2020 and will be important in 2021 too. The devastating impact of the COVID-19 pandemic on global tourism has carried on into 2021, with new data showing an 87% fall in international tourist arrivals in January as compared to 2020. The outlook for the rest of the year remain cautious as the World Tourism Organization (UNWTO) continues to call for stronger coordination on travel protocols between countries to ensure the safe restart of tourism and avoid another year of massive losses for the sector.

If we look at some of the past recent world crises of a similar typology—i.e., SARS (Severe Acute Respiratory Syndrome) in 2003, or the MERS (Middle East Respiratory Syndrome) in 2015; they also have considerable impacts in the tourism sector [Couto et al, 2020]. 

Chart1

The impacts of crisis and epidemics on tourism development world (% change)

 

Source: Adapted from COVID-19 - a global insight on travel and tourism impacts UNWTO & Data Partners 

Chart 2

International tourist arrivals in 2020 and scenarios for 2021

 

Source: Adapted from UNWTO report International Tourism and Covid 19 

Chart 3

 

World Tourism Statistics 2020 (by regions) 

Source: Author, according to UNWTO INTERNATIONAL TOURISM AND COVID-19 

Policy makers and practitioners in the tourism industry must develop a new crisis-readiness mechanism to fight the current pandemic crisis as well as future pandemic crises. To do so, they must gain empirical knowledge on the nature and actual extent of the COVID-19 crisis. For now, this has not happened, and scenarios developed by them significantly underestimate the potential effects of the COVID-19 pandemic crisis [Skare et al, 2021].

In 2020 according to “Anti-Crisis plan of Tourism Activation” [Tourism Activation of anti-crisis plan] Georgian government supported tourism with following activities.

Food facilities:

- Exempt from Property Tax in 2020

- Eligibility for Credit Guarantee Schemes

- Support in the introduction and implementation of UNWTO recommendations

Travel companies and guides:

- Exempt from property tax in 2020

- Bank guarantee interest subsidized for six months

- Subsidies on co-participation fees for international travel and tourism fairs

- Support in the introduction and implementation of UNWTO recommendations

- Re-training program for guides

- Support to guides in terms of free visits to museums, protected areas, etc.

Budget 200 Million GEL:

- 45 million GEL will be spent on property tax exemption of tourism industry in 2020

- 90 million GEL - personal income tax exemption and deferral for travel industry

- 60 million GEL - bank loan subsidies for about 3,000 hotels

-  5 million GEL - support to travel agencies and guides

It is interesting to make an overview of several anti-crisis programs in Italy, because it is one of successful countries, whose experience is really important. The European Commission approved the temporary framework, which shows:

- On 16 July 2020, a €1.2 billion Italian scheme to support companies active in agriculture, forestry, fishery, aquaculture and other related sectors affected by the coronavirus outbreak. The support will take the form of direct grants, repayable advances, tax and payment advantages, reduction or cancellation of the payment of social security and welfare contributions, debt write-off and other payment facilities. The scheme will be accessible to companies of all sizes active in agriculture, forestry, fishery, aquaculture and other related sectors such as agro tourism, food production and marketing, catering, and didactic farms. The measure is expected to benefit over 1,000 enterprises. The purpose of the scheme is to address the liquidity needs of these companies and to help them continue their activities during and after the outbreak.

- On 16 November in 2020, a €175 million Italian scheme to support companies operating in the tourism and thermal bath sectors affected by the coronavirus outbreak. Under the state aid Temporary Framework, the support will take the form of an exemption from the obligation to pay certain social contributions. The scheme aims to reduce the labor costs borne by private employers active in the tourism and thermal bath sectors, to keep employment levels in the context of the coronavirus outbreak. The measure provides for a total exemption from the payment of employers' social security contributions (except for contributions to insurance for accidents at work), for a maximum period of three months.

- On 15 April 2021, the Commission approved a €10 million scheme to support Italian companies operating small ships in the tourist transport sector, in the context of the coronavirus outbreak. Under the state aid Temporary Framework the support, in the form of direct grants, aims to mitigate the impact the restrictive measures imposed by the Italian government to limit the spread of the virus have had on the beneficiaries.

- On 9 April 2021, a €12 million scheme to support publishers and journals of art and tourism materials in Italy, in the context of the coronavirus outbreak. Under the state aid Temporary Framework, the public support, in the form of direct grants, aims to partially compensate the significant reduction of revenues associated to the sale of art and tourism publications in 2020, as a result of the coronavirus outbreak. The scheme aims to address the liquidity needs of the beneficiaries and help them to continue their activities during and after the outbreak.

In order to show the tourism support programs, we have decided to demonstrate table 5, where activities are divided in 4 main features: Liquidity injection cost reduction, Adaptation and sector restructuring (health and safety standards, protocols), Improvement to the tourism offering (services, infrastructure, locations, experience), Use of digital tools and platforms (see, table 5). It should be mentioned, that some of the activities are common for Georgia too. For example, to support tourism sector Georgian National Tourism Agency together with Google, has organized free webinars to support tourism sector and help to use digital tools in business also while pandemics; as restaurants were working on take away offer, digital applications were promoted and Georgian National Museum has offered digital tours, which has gained a lot of  people’s interest. 

Table 5

International Examples of Specific Measures to Support the Tourism Sector

Source: Adopted from REBUILDING TOURISM COMPETITIVENESS Tourism response, recovery and resilience to the COVID-19 crisis 

It can be clearly seen that there are differences between Georgian anti-crisis plan and other countries and, in some cases, Georgian government must consider the example of Italy and other countries as well. In 2020 Georgia until autumn had the status of green country and domestic tourism was very active, but it had negative impact on epidemical situation in autumn. Since 2021 vaccination process had started (it is especially popular between people who are employed in tourism) and Georgia is opening boarders for vaccinated international tourists too. On behalf the factors discussed above prognosis are positive for the future, hopefully tourism will get used to develop together with Covid19 and people are also getting used to live and travel with Covid regulations.

In order to study the factors, which are having influence on tourist’s decision making while pandemics, there has been done research on behalf of polling system, which took place in social network, in April 2021, where took part 100 Georgian travelers and the results were following: 

Diagram 2

The factors having influence on tourists' decision-making while traveling

 

Source: authors, according to the research 

According to the study leader factors are covid free zones,  nice/unpolluted environment, also quality of service appears to be important, personal security and safety and the distance from the city. People are less interested in meeting new people and diversity of accommodations. 

Conclusion 

In conclusion, it can be said that the tourism sector is sensitive, but it has the ability to return to its original state soon, if proper policies are pursued and while it’s planning it will be always taken into account the factors affecting it and ways to overcome the crisis. The current political situation in the country is a turning point in the development of the tourism sector, including a correlational and cause-and-effect relationship. The study once again confirmed the complexity of the tourism sector and the fact that a number of factors influence its development, as well as the development of tourism also has a number of negative and positive effects. Global pandemics appears to be the challenge for the whole world and it will take several years to restart it.           

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