The Role of State Regulation and Policy in Tourism Development: The Case of Georgia

Countries with different levels of development show great interest in tourism, which is caused by high economic performance of the tourism industry. The chapter shows the importance of state policy, which supports tourism development in the countries with rich natural and cultural tourism resources but have weakly developed tourism industry, weak economy, and imperfect mechanisms of state regulation. After transition to market economy and losing traditional markets, Georgia quickly recognized the importance of tourism and immediately started to implement various types of activities in this direction. In 2012 Georgia declared tourism as a priority sector. This was followed by legislative changes and boom of foreign investments in hotel constructions. High-class hotels provided the opportunity for the development of new tourism directions, which are less dependent on seasonality. The government has been promoting tourism among the skeptical local population. Georgia faces problems related to improper application of tourism regulatory instruments. Tourism consumes products and services that are not directly part of the tourism sector, but have a significant impact on its development. Therefore, development of tourism industry requires implementation of the united state policy. The state policy needs to be based on the principles of sustainable development so that all the interested parties in tourism—tourists, business, state, local communities—get benefit.