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The tourism industry in Azerbaijan is making positive changes to increase activity in the sector.
Tourism in Azerbaijan is currently undergoing a process of revitalization. Guided by a set of new government initiatives, the face of tourism in the country is evolving in ways designed to make Azerbaijan a more favorable destination for both foreign and domestic travelers. Over 2 million tourists visited Azerbaijan in 2015, resulting in almost AZN1 billion of revenue. The number of tourists is expected to rise over the next few years as well, with predictions of 5 million tourists visiting Azerbaijan per year. The demographics of tourists are also changing. The government is taking steps aimed at developing a domestic tourism niche. These steps include constructing more hotels located in the regions of the country and promoting large government projects like the increasingly popular Shahdag Winter-Summer Tourism Complex, which had over 100,000 visitors in the 2014-2015 winter season. Previously, citizens of Azerbaijan would usually travel to Georgia or Turkey for a short-term holiday. As a result of these new initiatives, traveling to the regions of Azerbaijan is now a cost-effective and reasonable alternative travel destination for local Azerbaijanis.
Affordability is also a cornerstone of the new tourism initiative. Characterized by the construction of many new two- and three-star hotels, Azerbaijan is working to appeal to all potential travelers, including accommodation for those travelling on tighter budgets. This is a judicious policy for many reasons. For one, the construction of new hotels in the country creates jobs for the country. On a more basic level, cheaper alternatives to the existing four- and five-star hotel options in Azerbaijan will help attract a wider number of visitors. Complaints about Baku have long included that there are few hotel options for middle-class families. This new strategy will draw in new tourists who previously could not afford the hospitality, while the high-end hotels will continue to attract the wealthy and foreign clientele. The cost of a potential trip is the central consideration to travelers; therefore, by reducing the costs associated with traveling to Azerbaijan, the overall tourism industry can only stand to benefit.
Changes to the tourist visa regime have been called for in Azerbaijan for many years. The government took notice and introduced an electronic visa option in 2013. Tourists can now apply to receive an e-visa by going through an accredited travel agency that has been approved by the Republic of Azerbaijan or through certain international partnerships. The tourist visa is valid for a period of 30 days. There is a new electronic marketing system in place as well, which creates promotional tourism materials and conducts calculated research to find target markets. Recent studies revealed that the majority of tourists that visit Azerbaijan come from Russia, Turkey, Iran, and Georgia.
Greatly assisting the tourism industry in Azerbaijan is its hosting of large-scale events. The month of July 2015 alone, during the inaugural 2015 European Games, saw 30,000 tourists and AZN77.9 million in investments. This is only the beginning of an impressive list. Baku will host the Formula One Grand Prix in July of 2016, the Islamic Solidarity Games in 2017, and it will host games as part of UEFA Euro 2020. Hand-in-hand with events of this scale, airline activity in Azerbaijan has increased as well with more direct international flights available than ever before.
The hospitality industry in Azerbaijan is also receiving organic assistance. The Association of Hotels and Restaurants in Azerbaijan created the Department of Strategic Studies to improve many different aspects of tourism, ranging from the need to hire adequately trained tour guides, to conducting research on the existing gaps or weaknesses that are present in the current system.
Tourism and hospitality remain strong and attractive sectors for investors. In 2015, the hospitality industry was the most dynamic sector in Azerbaijan in terms of absolute growth compared to the same period from the year before, multiplying more than seven times. Driven in large part by the European Games, January-August investments alone totaled AZN449.8 million—impressive enough to comprise over 4% of total domestic investment activity for the entire country.
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TABLE OF CONTENTS
Year In Review
Good Times Ahead
<strong></strong><strong>In a year dominated by the overarching theme of low hydrocarbons prices, Azerbaijan showed resilience and verve in putting in place bold measures both to counter the slump in energy prices and put its economy on a surer footing.</strong>
read articleReview: Diplomacy
Operation Outreach
In 2015, Azerbaijan's military budget increased by a notable 27%, to $4.8 billion, or 17.9% of the government's total budget for the year. The first Azerbaijan Defence Exhibition (ADEX 2014), drew over 200 companies from 34 countries, including Russia and the US.
read articleInterview
Rufat Mammadov, President, Azerbaijan Export and Investment Promotion Foundation (AZPROMO)
TBY talks to Rufat Mammadov, President of the Azerbaijan Export and Investment Promotion Foundation (AZPROMO), on large-scale events and their ability to attract FDI and the potential Iran may hold.
read articleReview: Banking
More Interest
In a sector faced with relatively flat growth for 2015-16, new opportunities are still there aplenty, led by the nascent Islamic banking sector, e-banking, and microfinance initiatives. Together, these areas should make banking more diversified and less reliant on a buoyant energy sector for its capital inlay.
read articleReview: Capital Markets
Taking Stock
As Azerbaijan grapples with the knock-on effects of low hydrocarbon prices, the Baku Stock Exchange (BSE) finds itself at the center of the country's efforts to stave off a budget deficit this year. In January, the government announced plans to sell $500 million worth of bonds on the BSE.
read articleInterview
Khanlar Fatiyev, , Chairman of the Supervisory Board, Ganja Automobile Plant Production Association
TBY talks to Khanlar Fatiyev, Chairman of the Supervisory Board of the Ganja Automobile Plant Production Association, on the role of the plant in driving growth in the non-oil sector.
read articleReview: Agriculture
Lots More
Farms across the country are pursuing a policy of increased yields for year-round fruit and in the wheat harvest to stave off an over-reliance on imports. With carefully targeted increases in exports, better routes to port and to market, and greater sophistication of agricultural facilities, farming could soon be the morning star of Azerbaijan's diversified economy.
read articleReview: Education
Baku to School
Azerbaijan's culture has always harbored a deep respect for educational values. This is embodied in the country's Azerbaijan 2020 mission statement, which seeks to raise standards across the sector and introduce ICT as a standard part of the learning experience at all levels.
read articleInterview
Elkhan Mammadov,, Secretary General, Association of Football Federations of Azerbaijan (AFFA)
TBY talks to Elkhan Mammadov, Secretary General of the Association of Football Federations of Azerbaijan (AFFA), on the experience Azerbaijan is gaining in hosting international events.
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