Beyond the Border: Armenia's Tourism Growth and Potential Decline

The economic growth recorded since 2021 is also rooted in a significant growth in tourism. The first chart depicts the dynamics of tourist arrivals and departures to Armenia on an annual basis. Until 2021 the number of arriving and departing tourists was almost equal. As many tourists came to Armenia as departed. There was a steady 12 percent average annual growth in tourist flow. There is also a certain seasonality of tourists: about 2 times more tourists visit in the summer months than in the winter months.*

Chart 1.

As our previous research has shown, after two and a half years of recovery and sharp growth, since the 4th quarter of 2023 the export and import of almost all services have contracted. The ratio of the fourth quarter of 2023 to the third quarter shows that tourism or travel services contracted by almost 2 times, by 42.6 percent, despite the fact that on an annual basis the export of tourism services grew by 23.3 percent, reaching 3 billion dollars. That is to say, tourists purchased 3 billion dollars worth of tourism services in Armenia in 2023. The growth of 2023 was mainly formed at the expense of continuous growth in the first 3 quarters. Let us also note that in 2022 service exports grew by more than 3 times, mainly due to post-pandemic recovery growth and the addition of a large number of Russian tourists and relocants.

The first chart also shows the pandemic’s impact on tourism flow. As a result, nobody visited Armenia in the months of April-August 2020; meaning that during this period the number of tourists was 0. That year this also struck a major blow to the tourism industry. In 2021 a recovery growth began, which was also driven by a large influx of relocants from Russia to Armenia. It is notable that while until 2020 the quantity of arriving and departing tourists was almost the same, after 2021 the quantity of arriving tourists recorded a larger growth than that of departing ones.

Chart 2.

Let us note that until 2019 the number of departing and arriving tourists was almost equal and had a steady growth trend. In 2020, due to the pandemic, the number of tourists significantly contracted. In 2021-2023 a recovery growth at a rapid pace was recorded. It is notable that unlike the indicators recorded up to 2019 when the number of departures and arrivals was almost equal, during this period according to official data 1.5 times more tourists arrived in Armenia than departed. The absolute difference over these 3 years amounted to 1.65 million people. Thus during 2021-23, 4.86 million tourists arrived in Armenia, while 3.22 million tourists departed.

We note that in 2023 the number of arrivals has already recovered and recorded growth from the pre-pandemic 2019 level, but in 2023, 1.65 million tourists departed from Armenia, which is still 12 percent less than the 1.87 million departing tourists of the pre-pandemic 2019 period.

Chart 3.

The net tourism data is also concerning (Chart 3), which presents the difference between those arriving in Armenia as tourists and those departing. In the first quarter of 2024 the RA net tourism number amounted to 55 thousand people, but in the first quarter of 2023 the same indicator was 116 thousand people. In fact, in the first quarter of 2024 the number of net arrivals was more than 2 times less compared to the same period of 2023. We note that starting from the post-pandemic period of 2020, this indicator was recording significant growth up until the first quarter of 2024.

Let us note that in the first quarter of 2023, 450 thousand people visited Armenia, of which 50 percent or 225 thousand were from the Russian Federation. In the first quarter of 2024, 436 thousand people visited Armenia, of which 42 percent or 184 thousand were from Russia. In fact, for the first time since 2020 there is a contraction in the number of tourists arriving in Armenia. In the first quarter of 2024, 3.2 percent fewer tourists visited Armenia than in the same period of 2023, and the number of tourists coming from Russia decreased by 18.7 percent. A reduction in the specific weight of tourists coming from Russia is also observed.**

If we compare the first quarter of 2024 with the same period of 2023, there is also a decline in tourists from the USA, Germany, and France. Tourism flows from the USA contracted by more than 2 times (from 11 thousand visitors down to 4.9 thousand), and from Germany and France by more than 30 percent. In the first quarter of 2023 about 5.4 thousand people had arrived from each of these states, whereas in the first quarter of 2024 it was already 3.6 and 3.5 thousand people respectively.

Chart 4.

At this moment there is a growth in tourists from India, Georgia, and Iran. The quantity of tourists arriving from India has grown by nearly 2 times. In the first quarter of 2023, 6.7 thousand citizens of India visited Armenia (1.5 percent of total visits), and in the first quarter of 2024 it was already 13.2 thousand Indians (3 percent of total visitors). Growth in visitors from Georgia and Iran was 25 and 17 percent respectively. In the first quarter of 2024, 62 thousand people arrived from Georgia (14 percent of total visits), and 34 thousand people from Iran (8 percent of total visitors).

Let us also note that in the first quarter of 2024 passenger journeys made through “Zvartnots” international airport decreased by 4 percent compared to the same period of 2023. In the first quarter of 2023, 65 percent of arrivals or 290 thousand people arrived through this airport, whereas in the first quarter of 2024, 64 percent of arrivals or 279 thousand people arrived through this airport.

Chart 5.

The final chart shows the annual dynamics of tourists departing from and arriving in Armenia, as well as an interval forecast. The dotted lines present the trend line of the average 12 percent annual growth in arrivals and departures up to 2019. As can be seen, in the first quarter of 2024 the annual indicator of arrivals has already reached the annual trend line and has a declining trend, which could negatively reflect on economic indicators as well as the current account balance. The number of tourists departing from Armenia still has a growth trend.

• According to the UNWTO methodology, “any person traveling to a place other than that of his/her usual environment for less than 12 months and whose main purpose of trip is other than the exercise of an activity remunerated from within the place visited” is considered a visitor. A tourist is an overnight visitor who stays at least one night in some accommodation in the place visited. In fact, if one individual leaves the territory of the state as a tourist 3 times during the year, then the number of departing tourists will increase by 3.

** The tourism visit data by countries for the first quarter of 2023 are approximated based on annual data, because a complete database is not accessible.