In 1Q23, number of international visitors more than doubled y/y to 1.1mn persons (79.9% of 2019 level). This growth was mainly driven by tourist arrivals (+83.8% y/y or 95.8% of 2019 level), while same-day visitors remain low despite strong y/y growth (+284.3% y/y or 48.8% of 2019 level).  Russia was the largest contributor to visitor growth, followed by Turkiye and Armenia. Out of non-neighboring countries, notable growth vs 2019 was observed from Belarus (+181.0% vs 2019), Kazakhstan (+85.2%), and Israel (+79.2%).

Notably, visitor recovery is still very low from neighboring countries: Azerbaijan (-86.2% vs 2019) and Armenia (-21.5% vs 2019), but we expect arrivals from these countries to rebound this year.  We expect international arrivals to reach 7.7 million persons in 2023, representing a full recovery compared to 2019 and a 64% y/y growth.

Tourism revenues continued strong growth, increasing by 102.0% y/y to US$ 795.4mn in 1Q23 and surpassing 2019 level by 37.5%.

Russia accounted for 33.5% of total tourism revenues in 1Q23, followed by Turkiye (12.1%) and EU (9.2%). We expect tourism revenues to increase by 15% y/y to US$ 4.0bn in 2023.