EVERY CLOUD HAS A SILVER LINING

The consequences of the global crisis are felt in almost all spheres of economic activity. World tourism is no exception. According to the World Tourism Organization (UNWTO), growth in the world market for tourist services amounted to 2 per cent last year, while according to predictions for this year, it will register barely any growth. Luckily, these negative tendencies will not be so apparent in our country. Local tour operators, hotel owners and tourist zones are much less dependent on entry tourism. As for domestic and exit tourism, there is unlikely to be any fall in demand.

A tourist or not?

A UNWTO survey shows that, despite the economic problems, citizens of Western countries will not stop travelling, but will give preference to low-budget companies and short-distance trips and will reduce the length of their holidays, postponing expensive trips to exotic countries in distant parts of the planet. In other words, priority will be given to domestic tourism and trips to nearby countries. For citizens of Western Europe, this means trips to the Middle East and Northern Africa. In this light, we may hope that the interest of foreign tour operators in Azerbaijan will increase somewhat and that they will organize reach-through tourist projects with countries like Georgia, Turkey, Russia, Iran and Turkmenistan.

"Despite the world crisis, 39.4 per cent more foreign tourists visited Azerbaijan last year than in the previous year, exceeding 1.4 million people. Moreover, this year we forecast a 15-per-cent increase in the influx of tourists," said Azerbaijani Minister of Culture and Tourism, Abulfaz Qarayev.

Is this significant or not, and into what categories can we divide the visitors? The World Tourism Organization (WTO) considers that a foreign tourist is anyone who visits another country for more than three days and who is not a transit passenger. Of course, the bare numbers do not reflect the real state of affairs in our country, because a considerable number (more than two thirds) of foreign visitors come to our country on business trips, for business purposes or on personal business. This category of foreigners ensures that hotels in Baku are 44-72 per cent full over the year. Nor should we forget our former compatriots who are now citizens of other countries: they visit their homeland in order to see their relatives and, as a rule, they do not use the services of travel agencies. Thus, it is necessary to discard foreigners, businessmen and business travellers, as well as our former fellow citizens, because they have other motives for visiting Azerbaijan than just travel. Therefore, in a worst-case scenario, the world tourist crisis could result in no less than one quarter of foreigners giving up their trips to recreation zones in our country.

Competition between tour operators

Of course, the development of entry tourism is an integral part of the business, but it is much more important to know what our compatriots wishing to holiday in this year's season should expect. According to media statements by the heads and managers of leading travel agencies, the crisis will not have a significant negative impact on opportunities for our citizens to see the world. Moreover, this year the cost of foreign trips will fall by about 20 per cent - the world's hotel chains are sustaining losses and have no plans to increase prices. Costs on popular routes from our country - Turkey, Egypt and Cyprus - have not only not risen, but have even fallen, according to price lists posted on travel agency websites. A week-long single trip to these countries costs 550, 700 and 500 manats respectively. The sudden fall in the rate of the euro to the dollar last summer and autumn also contributed to a reduction in the cost of trips to European countries.

Travel agency services may become more expensive if there is a sudden hike in the price of air tickets but, since the price of oil is falling, such changes are unlikely at the moment. Another factor helping to maintain low prices for air tickets, especially to Central, South and North America, is the swine flu epidemic, which reduces the inflow of tourists and business.

Now onto domestic tourism: the development of this sector depends mainly on people's ability to pay for trips whose prices have soared in recent years due to rising inflation and the costs of the construction of boarding houses and hotels, their maintenance and salaries. We may suppose that this trend will reverse this year. "Services in our hotel sector are not cheap today, but prices in a number of hotels have already fallen by 20-25 per cent. It is likely that this process will cover a larger number of businesses," believes Qarayev. Further, changes to the structure of the tourist market and the formation of new tastes among consumers encourage the same trend.

The number of tourists seeking ecological, sports and ethnographic holidays is gradually increasing. These sectors of tourism are more or less developed in Saki, where an association of family tourism has been established, and in the Qax and Lankaran districts. In the last few years, ethnographic tourism, which includes traditional trips on horseback, has begun to develop in mountain villages in the Ismayilli, Qabala, Qusar, Lerik and Masalli districts, as well as in the village of Xinaliq, where you can now ride on a comfortable bus. As there are opportunities in the small tourism sector, our holidaymakers have real alternatives to expensive holidays in the country's major boarding houses. This also helps to bring prices down.

… and hotels

Tourist services in Azerbaijan are also becoming cheaper thanks to other objective factors: competition is getting tougher - last year alone, the number of hotels increased by 16.9 per cent over 2007. 35 more hotels are currently under construction and to increase prices in this situation would mean bankruptcy.

Overall, there are more than 330 hotels in the country, two thirds of them having been opened over the last five years. "Last year alone, 54 new hotels and boarding houses were opened in Azerbaijan and, on average, about 30 hotel-type complexes a year have been built here over the last four years," said Minister of Culture and Tourism Abulfaz Qarayev. Moreover, in the current hard year for the economy, the process of hotel construction will continue at almost the same pace.

It is notable that in the recent period, top class five-star hotels and boarding houses have been built here. For example, the construction of a top class tourist complex began on a 35,000 ha site in the village of Talistan in the Ismayilli District earlier this year. The complex will have two five-star, nine-storey hotels, each with 250 rooms, a swimming pool, a golf course and other recreation and entertainment facilities. This spring, large scale work will begin on building a winter-summer sports and tourism complex called Sahdag in the Qusar District. Last November a tender was announced to select a general contractor for the project which is estimated at 1.5-2 billion dollars. The builder of a four-star hotel with 340 rooms, an elevator base, a restaurant, a skiing school, lifting stations, a cable way, ski routes, communications (water supply and sewerage), a workshop and a system to produce artificial snow will be identified soon. It is planned to finance the building of the complete infrastructure and elevators from the state budget, while everything else will be put out to tender to private investors. It is planned to open the first facilities at the ski resort by the end of 2010.

Another capital intensive project is being undertaken by the Russian company Crocus International, which has started building an international holiday zone on the Abseron coast of the Caspian. We are talking about the construction of a multi-storey hotel complex and a cottage settlement which can accommodate 8,000-10,000 people at a time, as well as yacht and golf clubs, pools, restaurants, a medical spa centre and other recreational facilities. The project will be implemented within 2.5 years and requires about one billion dollars.

Capital intensive projects to build resorts and tourist zones are also planned on the Xizi-Davaci coast, Lankaran, Nargin Island, the Bay of Baku and the Novxani coast. All these projects prove the confidence of entrepreneurs in a good future for Azerbaijani tourism. Such large-scale investments in conditions of world crisis are graphic evidence.