One of the important signals for Georgia’s service economy in the first quarter of 2026 is the growth of accommodation and food services. The sector’s turnover increased from GEL 796.9 million to GEL 919.3 million, with a growth rate of 115.4%. Within the sector, accommodation turnover increased from GEL 296.3 million to GEL 348.0 million, with a growth rate of 117.4%, while food and beverage service turnover increased from GEL 500.5 million to GEL 571.3 million, with a growth rate of 114.1%.
These figures show that tourism-related services are again in an active phase. The monetary scale of hotels, accommodation facilities, restaurants, cafés, food service businesses and tourism-related services is increasing. Output also grew: output in accommodation and food services increased from GEL 797.8 million to GEL 919.1 million, with a growth rate of 115.2%. Employment in the sector increased from 40,606 to 44,036 people, representing an 8.4% increase.
On the one hand, this is a sign that the momentum of the service economy and tourism-related activity is returning. On the other hand, strong dependence on tourism and related services also makes the economy vulnerable. This sector is sensitive to external shocks, flights, visitor flows, geopolitics, incomes, prices, seasonality and consumer sentiment.
BTU researchers assess that Georgia’s main task is not only to grow tourism. The main task is to strengthen tourism and services qualitatively – so that the service economy becomes more productive, less seasonal, more regionally balanced, more digitally developed and less vulnerable to external shocks.
Tourism is one of the most visible parts of Georgia’s economy. When tourism grows, the effect is quickly visible in cities, hotels, restaurants, transport, small businesses, regions, employment and local income. Tourism is not only the number of visitors. It is an entire service chain: accommodation, food, transport, guides, cultural spaces, events, local products, digital booking, marketing and customer experience.
This is why the 15.4% growth in accommodation and food services turnover is not only a sectoral figure. It is a signal that demand is increasing in the service economy and businesses are becoming more active.
But tourism success should always be read in two ways. It quickly creates income and jobs, but it also reacts quickly to external changes. If flights decline, visitors decrease, geopolitical risks rise in the region or consumer spending weakens, the service sector feels the pressure immediately.
What happened in the first quarter of 2026
In the first quarter of 2026, turnover in accommodation and food services reached GEL 919.3 million. In the first quarter of 2025, the figure was GEL 796.9 million. The growth rate was 115.4%, meaning an increase of about 15.4%.
Within the sector, accommodation turnover increased from GEL 296.3 million to GEL 348.0 million. The growth rate was 117.4%, or about 17.4%. Food and beverage services turnover increased from GEL 500.5 million to GEL 571.3 million, with a growth rate of 114.1%.
The output picture is similar. Output in accommodation and food services increased from GEL 797.8 million to GEL 919.1 million, with a growth rate of 115.2%. Accommodation output increased from GEL 297.6 million to GEL 348.2 million, while food and beverage service output rose from GEL 500.2 million to GEL 570.9 million.
Employment also increased: the number of people employed in the sector rose from 40,606 to 44,036. Employment in accommodation increased from 16,175 to 17,926, while employment in food and beverage services increased from 24,431 to 26,110.
Together, these three indicators — turnover, output and employment — show that the sector is not moving only at the level of prices or monetary turnover; real business activity is also expanding.
What does this mean for tourism
Accommodation and food services are among the most direct indicators of tourism-related activity. Growth in hotels, guesthouses, apartments, restaurants, cafés and food service businesses often points to stronger visitor flows, domestic tourism, business travel or urban consumption.
The 17.4% growth in accommodation turnover is especially notable because it is more directly connected to tourist overnight stays, hotel demand and travel intensity. The 14.1% growth in food and beverage services shows that demand is not limited to accommodation; the broader hospitality ecosystem is also expanding.
This matters for Georgia because tourism creates income, employment, regional activity and opportunities for small businesses at the same time. Especially in the regions, tourism is often the sector that connects local families, small hotels, food service businesses, transport and local products with the market.
Why does the service economy matter
The service economy is one of the main parts of a modern economy. For a small country, services are especially important because they do not always require the same level of capital as heavy industry. A well-organized service can grow quickly, create jobs and bring foreign income.
Tourism, food services, accommodation, transport, cultural services, events, digital services, online booking and customer experience together create an economic network that employs many people.
But the quality of the service economy is not measured only by quantity. It matters:
- how high the service standard is;
- whether wages are increasing;
- whether workers are developing skills;
- how dependent the sector is on seasonality;
- how widely tourism benefits are distributed across regions;
- how much businesses use digital tools;
- whether the sector creates local value and not only quick consumption.
Recovery or temporary activation?
The growth of accommodation and food services can be interpreted as a sign that the service economy’s momentum is returning. But caution is necessary. One quarter of data does not yet prove long-term sustainable growth.
Sector growth may be connected to several factors: increased tourist flows, stronger domestic consumption, price changes, events, business travel or seasonal effects.
The key question is this: is only turnover growing, or is service quality growing as well? Is demand driven only by visitors, or is the domestic market also becoming more resilient? Is activity growing only in Tbilisi and Batumi, or is regional tourism also strengthening?
If growth is broad and based on quality service, digital channels, regional offers and workforce development, then this is real strengthening of the service economy. If growth is mainly linked to short-term demand or prices, the picture should be read more cautiously.
Vulnerability of the service economy
Tourism and related services are among the fastest-growing but also most vulnerable parts of the economy. The sector depends on external conditions that are often not fully controlled domestically.
The first risk is geopolitics. Regional tensions, perceptions of safety or international media sentiment can affect visitor flows quickly.
The second risk is flights and connectivity. If direct flights decline or become more expensive, tourism demand weakens.
The third risk is seasonality. If tourism depends on a few months or a few locations, businesses receive uneven income throughout the year.
The fourth risk is price sensitivity. If services become more expensive without quality improvement, the country may lose competitiveness.
The fifth risk is workforce. Service quality depends directly on people — administrators, cooks, managers, guides, service staff and digital marketing specialists. If there is a talent shortage, sector growth cannot turn into quality.
Service quality as economic policy
The next stage of tourism in Georgia should move from quantity to quality. More visitors alone are no longer enough. The country needs more value per visitor, longer stays, higher-quality service, regional diversity and stronger branding.
Service quality is part of economic policy. If a hotel, restaurant, transport provider, museum, winery, guide, digital platform and local product together create a strong experience, the value of tourism increases.
If the experience is weak, the country may remain a market for cheap and short-term visits. If the experience is strong, Georgia can become a higher-value tourism and service economy.
Where is the opportunity
Growth in the service economy creates several opportunities for Georgia.
The first is regional tourism development. Tourism should not remain limited to Tbilisi, Batumi and a few well-known locations. Regions can develop wine, eco, cultural, gastronomic, medical, sports, educational and digital-nomad-oriented tourism.
The second is the inclusion of local products. The food service sector can become a market channel for Georgian agriculture, small producers, wine, cheese, honey, hazelnuts, fruit and handmade products.
The third is digital tourism. Online booking, data-based pricing, customer analytics, digital marketing, AI-supported recommendations and multilingual services can increase service productivity.
The fourth is workforce development. Tourism will become a source of better wages and career growth only if service professions move to a higher standard.
The fifth is business and educational tourism. Conferences, universities, training programs, technology events and regional forums can help reduce seasonality.
Where are the risks
The main risk is that service growth remains only quantitative. If higher turnover does not turn into better service, better wages, regional strengthening and higher value, the sector’s long-term impact will be limited.
The second risk is dependence on external shocks. Tourism grows quickly, but it is also quickly damaged during crises.
The third risk is seasonality. If businesses depend on only a few months, they cannot create stable jobs or retain talent.
The fourth risk is a mismatch between price and quality. If prices increase while service quality does not improve, visitor experience weakens.
The fifth risk is regional inequality. If benefits accumulate only in a few cities, tourism cannot become a tool of broad national development.
What should be considered by Georgia
Georgia should use the growth in accommodation and food services not only as an indicator of tourism recovery, but as an opportunity for qualitative transformation of the service economy.
Several questions are important:
- How much of the growth reflects real demand and how much reflects prices?
- Which regions saw the strongest growth?
- Did employment and wages increase?
- Did service quality improve?
- How much does the sector use digital channels?
- How strongly is tourism linked to local production?
- How resilient is the sector to seasonality and external shocks?
The answers to these questions will determine whether first-quarter 2026 growth is only a sign of recovery or the beginning of a new stage in the service economy.
Why this matters for Georgia
Tourism and services are sectors with rapid economic impact for Georgia. They create jobs, income, regional opportunities and space for small businesses. This is exactly why their sustainability is especially important.
If the service economy depends only on the number of visitors, the country will remain vulnerable. If it moves toward quality, digitalization, regional diversity, local products and workforce development, it can become a more resilient and competitive part of Georgia’s economy.
BTUAI assessment
BTUAI assesses that the 15.4% growth in accommodation and food services turnover and the 17.4% growth in accommodation in the first quarter of 2026 are positive signals for the service economy. Turnover, output and employment are increasing in the sector, indicating stronger tourism-related economic activity.
However, this growth does not automatically mean sustainability. Tourism and services remain sensitive to external shocks. For Georgia, it will be important to turn sector growth into qualitative improvement: better services, stronger regional tourism, digital tools, inclusion of local products, higher productivity and more stable jobs.
The main conclusion is this: the momentum of the service economy is returning, but its sustainability depends on whether Georgia can transform tourism growth into a high-quality, diversified and less vulnerable service economy.
Key findings
- In the first quarter of 2026, turnover in accommodation and food services increased by 15.4%.
- Accommodation turnover increased by 17.4%.
- Food and beverage service turnover increased by 14.1%.
- Output in the sector increased by 15.2%.
- Employment in the sector increased by 8.4%.
- These figures point to stronger activity in tourism-related services.
- The sector remains vulnerable to external shocks, seasonality, flights, prices and consumer sentiment.
- Georgia’s main task is to turn tourism growth into a higher-quality, regionally balanced and digitally developed service economy.
Data snapshot
- Accommodation and food services turnover in the first quarter of 2025 – GEL 796.9 million.
- Accommodation and food services turnover in the first quarter of 2026 – GEL 919.3 million.
- Turnover growth rate – 115.4%.
- Accommodation turnover in the first quarter of 2025 – GEL 296.3 million.
- Accommodation turnover in the first quarter of 2026 – GEL 348.0 million.
- Accommodation turnover growth rate – 117.4%.
- Food and beverage service turnover in the first quarter of 2025 – GEL 500.5 million.
- Food and beverage service turnover in the first quarter of 2026 – GEL 571.3 million.
- Food and beverage service turnover growth rate – 114.1%.
- Accommodation and food services output in the first quarter of 2026 – GEL 919.1 million.
- Output growth rate – 115.2%.
- Employment in the sector in the first quarter of 2026 – 44,036 people.
- Employment growth rate – 108.4%.
Methodology
This report was prepared as part of BTUAI Research. The analysis is based on demographic, regional, economic and behavioral data, as well as general trends observed in publicly available sources. The materials are processed using analytical methods applied by BTU researchers, with the support of BTUAI.
The purpose of the research is not to provide personal assessments, but to identify broader trends and practical directions for business, education and society.
In this specific material, first-quarter 2026 enterprise activity data is analyzed in the context of accommodation and food services, tourism, the service economy, employment, seasonality, external shocks and Georgia’s economic resilience.
Limitations
This material is analytical and educational in nature. It does not constitute financial, investment, legal, tax or individual business decision-making advice. Before making specific decisions, consultation with a relevant specialist is required.
The data reflects one quarter and is not sufficient to determine a long-term trend. Sustainable conclusions require multi-quarter, regional, seasonally adjusted and tourism-flow analysis.
The indicators are nominal and may include price effects. Additional statistical processing is required to assess real volume growth.
Sources
National Statistics Office of Georgia – “Results of Enterprise Activity, First Quarter of 2026.”
BTUAI analytical processing for the context of tourism, accommodation and food services, service economy, employment, vulnerability to external shocks and Georgia’s economic resilience.
Frequently asked questions
Does the 15.4% growth in accommodation and food services mean tourism has fully recovered?
It is a positive signal, but one quarter of data is not enough to confirm full recovery. Analysis of tourist flows, seasonality, regional distribution and real volumes is also needed.
Why is the 17.4% growth in accommodation important?
Accommodation is directly connected to visitor overnight stays, hotel demand and travel intensity. Its growth is therefore an important indicator of tourism momentum.
Why is the sector vulnerable?
Tourism depends on flights, safety perceptions, geopolitics, consumer income, prices and seasonality. Changes in these factors affect the sector quickly.
What should Georgia do?
Georgia should strengthen service quality, regional tourism, digital channels, workforce development, inclusion of local products and strategies to reduce seasonality.
What is the main conclusion?
The momentum of the service economy is visible, but its sustainability depends on quality, diversification, digital development and resilience to external shocks.
Keywords
tourism Georgia; service economy; accommodation; food services; hotels; restaurants; business sector; turnover; output; employment; seasonality; tourism resilience; regional tourism; digital tourism; BTUAI; Business and Technology University; hospitality sector.
Citation format
BTUAI Research Team. “Tourism and Services: Has the Momentum of Georgia’s Service Economy Returned?” Business and Technology University, BTUAI.ge, 2026.
Prepared by the academic team of Business and Technology University and the BTUAI Research Team.
Tbilisi, Georgia
BTUAI is an analytical platform of Business and Technology University that studies the impact of artificial intelligence, digital transformation, innovation, startup ecosystems, data analytics and emerging technologies on business, the economy, education and society. BTUAI materials are designed to explain complex technological and economic changes in a clear, reliable and Georgia-focused way.