The COVID-19 pandemic had a considerable impact on the service sector in Armenia, particularly in the tourism, hospitality, and retail industries. The government's prompt response and various relief measures helped to mitigate some of the negative effects of the pandemic on these sectors. As the global health crisis subsides and the economy begins to recover, the Armenian service sector will continue to adapt and evolve to meet the changing demands and expectations of consumers. The long-term effects of the pandemic on the service sector will depend on the resilience and adaptability of businesses and the continued support from the Armenian government.
Tourism plays a vital role in Armenia's economy and service sector. However, the COVID-19 pandemic and the resulting travel restrictions led to a sharp decline in international visitors. According to the Statistical Committee of the Republic of Armenia, the number of international tourists visiting the country in 2020 decreased by 81.5% compared to 2019. This decline had a significant impact on local businesses and employment within the tourism sector.
Hotels, restaurants, and other businesses dependent on tourism faced unparalleled challenges. Major hotels such as the Marriott Armenia Hotel Yerevan and the Alexander Hotel saw a substantial reduction in occupancy rates. Many businesses were forced to temporarily or permanently close their doors, resulting in job losses and decreased income for thousands of workers.
The hospitality industry in Armenia was similarly affected by the pandemic. Lockdown measures and social distancing requirements led to the closure of numerous restaurants, bars, and cafes, causing substantial financial strain for these establishments. Small and medium-sized businesses (SMEs) within the hospitality sector, in particular, struggled to survive, with several of them shutting down.
In response to the challenges faced by the hospitality sector, the Armenian Ministry of Economy introduced a series of relief measures. These included tax relief, financial assistance for affected businesses, and wage subsidies for employees. According to the Ministry of Economy, these measures aimed to preserve jobs and support the recovery of the sector.
The retail sector in Armenia also experienced significant impacts due to the COVID-19 pandemic. With lockdown measures in place, brick-and-mortar retail stores witnessed a sharp decline in foot traffic and sales. This was especially evident in large shopping centers like Dalma Garden Mall and Yerevan Mall.
However, the pandemic also led to the growth of e-commerce in Armenia, as more consumers turned to online shopping amidst the restrictions. This trend provided a lifeline for many retail businesses that quickly adapted and invested in their online presence. The Armenian government recognized the potential of e-commerce and introduced measures to support its development, such as offering financial incentives and promoting digital literacy.