SIGHTS ON THE STARS

Azerbaijan 2013 | TOURISM & SPORTS | REVIEW: TOURISM

Success in hosting Eurovision 2012 and other international events has accelerated activity in the leisure tourism industry, while the high-end and business segments also continue to register growth.

As the positive effects of hosting large-scale international events such as the FIFA U-17 Women's World Cup and the Eurovision Song Contest continue into 2013, Azerbaijan is refining its image as a prime tourism destination. The country is continuing efforts to build resort areas, license more hotels, and create centers of attraction such as modern museums and a new hospitality school in Baku. These initiatives are aimed at strengthening the ongoing growth of the sector in 2013 and propelling Azerbaijan into a leading role in the regional and global tourism industry.

Hotels and resorts such as the Shahdag Summer-Winter Tourism Complex continue to be a primary draw for investment and a source of activity in the local market, with more attention toward high-end and middle-income clients on the agenda in 2013. Meanwhile, five-star hotels are seeking to cater to the MICE tourism segment as well as an increasing number of luxury leisure visitors expected to arrive in 2013.

According to the latest government-released figures, 11 million people traveled to and from the country in 2011, with approximately 2.24 million of them foreign visitors, demonstrating 14% year-on-year growth. Although precise figures for 2012 were not released as of early February 2013, numbers released by the Ministry of Culture and Tourism indicated that visitor numbers grew by approximately 10.7% compared to 2011. Furthermore, the number of foreigners visiting Azerbaijan increased by 60% in the period from 2006-2011, the large majority of which were Russian, Georgian, Iranian, Turkish, and Ukrainian nationals.

Currently, there are 218 tourist companies operating in the country, and 508 licensed hotels were registered in 2011, marking 78% growth since 2006. The country offered 31,979 beds in 2011, demonstrating a 4% increase compared to 2010, with a combined total of 14,815 rooms on offer for guests.

By the end of 2012, 57 legal entities and individuals were licensed to participate in tourism activities, and 77 legal entities and individuals were engaged in hotel activity. Over 7,500 employees were directly working in both segments of the sector as of end-2011.

AN UPPER HAND

With the encouragement of government entities, Azerbaijan is set to participate in more than 20 major international tourism fairs and exhibitions in 2013, in locations such as Spain, Iran, Turkey, and the US. Delegations from Azerbaijan have already been actively participating in exhibitions to showcase the country's achievements in tourism and promote the country as a recreational and luxury destination. According to Minister of Culture and Tourism Abulfas Garayev, the Ministry “plans to take part in several tourism investment forums during 2013, mainly to present the investment potential of the local tourism industry." However, current efforts are also geared toward attracting investments in the sector, he said, adding that “several provisions will be stipulated in the new Tourism Law to provide additional incentives for foreign investment."

The Ministry of Culture and Tourism was established in January 2006 as part of a historical decree signed by President Aliyev. With the ongoing mission to work in partnership to attract private investment, promote Azerbaijan as a tourism destination, implement various projects, and host international events, the organization has seen a welcome increase in activity over the past few years. Now, the Ministry seeks to participate in more tourism exhibitions around the world and continue attracting world-class events to Azerbaijan in the years to come.

After registering a total of 30,000 visitors in the 15-day span leading up to the Eurovision 2012 event hosted in Baku, the government and its related agencies have continued to bid to host international events. In 2013 alone, world-class cultural events such as the International Theater Festival, the Gabala International Classical Music Festival, the Rostropovich Festival, and the Jazz Festival are being held in the country. Following its success in staging the FIFA U-17 Women's World Cup soccer event in 2012, Azerbaijan is also gearing up to host the first-ever edition of the proposed European Olympic Games in 2015. The creation of various tourism establishments has long been on the government's annual agenda, with attractions such as the Paris branch of the Azerbaijani Cultural Center and the Carpet Museum in Baku new for 2013. Designed in the form of a rolled carpet, the latter is expected to open along Baku's seaside boulevard just before the Nevruz holiday on March 20-21, 2013. The museum's construction is being carried out as a joint project between the Heydar Aliyev Foundation, the Ministry of Culture and Tourism, and UNESCO, and will include innovative restoration equipment, a storehouse, and a laboratory. The museum will play a significant role in attracting tourists, as restored ancient Azerbaijani carpets will also be available for purchase on site. As a flagship project for the government's efforts, the Shahdag Summer-Winter Complex was opened to the public in January 2013. Designed to operate year-round, the complex includes trade centers, restaurants, cafés, game halls, equestrian sports areas, skiing, and other resort services. Upon completion, the complex will feature 10-12 hotels and cover an area of 2,058 hectares.

REPUTATION BUILDING

With hotel arrivals climbing to 172,797 in 2011, up 14.5% from the 150,832 recorded in 2010, operators are focused on expanding their operations and boosting their ratings in 2013. Meanwhile, larger hotel chains are moving into the resort segment and exploring opportunities in the regions of Azerbaijan. Currently, 6,198 people are directly employed in the hotel business, compared to the 6,021 accounted for in 2011.

In late November 2012, 50 hotels and hotel-type facilities were under construction in Baku and the regions, with notable brands such as Fairmont, Sheraton, Ramada, and Rixos entering the local market. Although the number of four- and five-star hotels has risen since the end of 2011, with five luxury hotels launching operations in 2012 alone, developers have noted the need to pay closer attention to the mid-market segment in 2013. There is increased interest in building three-star hotels, which can then be upgraded to the four-star level as necessary.

Led by Gilan Holding, Qafqaz Hotels has pioneering the hotel industry in regional areas, specifically in Gabala and Lankaran. “Gabala is one of the oldest Azerbaijani cities… the heart of the country's northern region," Halil Duru, General Coordinator of Gilan Tourism & Qafqaz Hotels and Resorts, told TBY. In addition, the natural setting of the region with “emerald green forests, snow-capped mountains, the rumble of its rivers and waterfalls, mineral water springs, and hundreds of historical monuments," has long attracted both domestic and foreign tourists, he said. In 2013-2014, the company plans to open a second hotel in Lankaran and start an additional project in Goygol.

At the same time, five-star hotels such as Four Seasons Hotel Baku and Kempinski Hotel Badamdar are seeing new waves of MICE tourism come onshore, in line with the work of the Ministry of Culture and Tourism and the Azerbaijan Export and Investment Promotion Foundation (AZPROMO). “We receive a lot of conference business from ministries and local institutions. Our hotel's location and facilities make it ideal for conferences and events," Pierre Stacher, General Manager of Kempinski Hotel Badamdar, told TBY. Considering itself second to none, the Four Seasons Hotel Baku also occupies a prime spot on the coastline, within close proximity to the business center of the city. This juxtaposition has also seen MICE tourism numbers escalate, especially as many leisure visitors still face visa requirements for entry. From 2010 to 2011, the number of business travelers increased by 8% from 547,600 to 591,900, respectively. Although leisure tourism numbers declined from 661,700 in 2010 to 519,800 in 2011, many high-end hotels expect the industry to pick up in the coming years, especially if targeted visa relaxation is implemented, as was the case during Eurovision 2012. The further extension of such policies could boost leisure visitors again in 2013. As the only luxury international city resort in Baku and Azerbaijan, Jumeirah Bilgah Beach Hotel is one key player in the leisure hospitality market aiming to cater to high-end visitor segments. Having arrived in Azerbaijan in 2005, General Manager Mete Atakuman has witnessed the tourism sector flourish and praised the country's commitment to its development. “Investment in tourism means opportunities in many different sectors; food, agriculture, construction, transportation, telecommunications, and manufacturing industries are all beneficiaries of the tourism sector, and they provide employment opportunities to many young Azerbaijanis," he explained to TBY. In this regard, the company has paid particular attention to the development of human capital, benefitting both the company and the workforce at large.

However, growing demand for more hospitality industry personnel continues to challenge the country. To provide the right human resources, the Azerbaijan Tourism Association (AZTA) took steps to open a hotel management school in the fall of 2012. The Hospitality Business School (HBS) is the first educational institution offering hospitality coursework in English in the country. Initially, it aims to offer various professional certifications for line, supervisory, and managerial levels of the hospitality industry. The HBS will establish its first location near the Sea Breeze Residences and Hotel, which is a premium-class villa and hotel property located in Nardaran. This initial campus will be located within a 30-minute drive of central Baku.