"Geopolitical situation – one of the reasons for the decline in the number of tourists." Opinion from Yerevan
Tourists in Armenia
In June 2024, Armenia welcomed 180,718 tourists, nearly 20,000 fewer than last year’s figure of 199,159. Fewer tourists also arrived in May, with 167,049 visitors this year compared to 176,384 last year. Experts say the decline in tourist numbers is due to various factors, ranging from rising prices to an unstable geopolitical situation.
Mekhak Apresyan, head of the Armenian Tourism Federation, believes it is equally important that Armenia is marked in red on the websites of competent agencies in several countries, meaning the country is considered unsafe.
“Due to this, insurance companies do not even provide insurance for tourists,” he said.
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After a sharp increase, there followed a significant decline
According to official data, the number of tourist visits in the first half of 2024 decreased by five percent compared to the same period last year.
Mekhak Apresyan, head of the Armenian Tourism Federation, reminds that previous years saw a sharp increase:
“In 2022, there was a twofold increase compared to 2021, and in 2023, there was almost a 40 percent increase compared to 2022.”
Even if there is some activity in September-October and the annual figure is not negative, “there is still something to think about,” Apresyan believes.
Factors behind the decline
According to Mekhak Apresyan, the increase in prices has significantly impacted the reduction in the number of tourists. He emphasizes that, in addition to global inflation, prices for certain services in Armenia have unjustifiably risen:
“They raised prices when they noticed the growing trend and saw that tourism was developing successfully. They decided they could get rich quickly and increased prices. This happened both in the private sector and in government sectors, such as museums.“
Another factor the expert cites is the 30 percent devaluation of the Armenian dram against foreign currencies.
“In reality, the cost of tourism in Armenia has increased by at least 50 percent. This is already a worrying sign. We need to consider adjusting our pricing policies. We should set reasonable and thoughtful prices,” Apresyan explained.
To counteract the unjustified price increases, he proposes introducing a bill “On Amendments and Additions to the Tax Code.” Apresyan suggests applying a zero percent VAT rate for inbound tourism packages.
The expert urges the government to consider the specifics of tourism when making such decisions, otherwise “significant damage could be done to the sector.”
Specifically, he proposes setting separate types of taxes for the tourism sector:
“There should be a turnover tax with a rate not exceeding five percent because the cost of transportation services has significantly increased due to rising fuel prices. And transportation services make up a significant part of the tourism package.“
“Unsafe” country
The expert asserts that some ranking publications view Armenia positively, placing it among the ten safest countries and even within the top three most attractive countries, but “this is not the full picture.”
The unstable geopolitical situation in the region and the world has had an extremely negative impact on Armenia’s tourism sector.
“On the websites of competent authorities in the USA, European countries, and Japan, which are our target markets, Armenia’s borders are marked in red – indicating it is an unsafe country. This negatively affects both overall and organized tourism,” explains Apresyan.
