RECREATING AT HOME

Azerbaijan's tourism sector is entering a new period of development and these changes may become a prerequisite for quality changes in the industry. The recent devaluation of the manat creates favourable conditions for the development of domestic tourism, which can attract a considerable part of Azerbaijani citizens who previously used to go abroad for recreation. This is not to mention the increase in the number of travellers from abroad.

Over the past decade, Azerbaijan has managed to form the basic elements of the tourism industry: as many as 535 modern hotels and boarding houses as well as allied services were put into operation. All this has contributed to the growth in foreign tourist traffic and significant investment in the recreation sector. In particular, statistics of the foreign tourist flow into the country in recent years show a steady growth of 10 per cent annually. The measures taken have contributed to the fact that more than 2.5 million foreign citizens visited Azerbaijan in 2013. Despite a slight decrease in the number of foreign visitors in 2014 (about 2.3 million people came to the country from abroad), most experts forecast positive dynamics in this segment.

Achievements of the domestic tourism sector are most vividly demonstrated at the annual Azerbaijan International Travel and Tourism Fair (AITF). A few days ago, the initiators of this fair - Iteca Caspian and the Ministry of Culture and Tourism - held the AITF 2015 exhibition at the Baku Expo Centre. President of Azerbaijan Ilham Aliyev and his spouse Mehriban Aliyeva were the guests of honour at this tourism forum.

Speaking at the opening of the exhibition, Minister of Culture and Tourism Abulfas Qarayev said that AITF, which was conducted for the 14th time, had established itself as a leading event in the region in terms of both the number of participants and geographical coverage. "All this is not accidental, as Azerbaijan has already occupied a prominent position on the world tourism map," the head of the tourism department emphasized.

These words are corroborated by statistical data on companies and participants in the forum. This year, a record-high number of companies took part in AITF, as well as in the 9th Caucasus International Exhibition "Everything for Hotels, Restaurants and Supermarkets" (Horex Caucasus 2015) and the 2nd Caspian International Boats and Yachts Show (CIBS 2015) that were conducted concurrently with AITF 2015. As many as 371 companies from 42 countries representing about 80 tourist destinations came to Baku this time. About 60 per cent of the participants were represented by foreign companies and national stands of individual countries. The forum was attended by 17 national groups including the newcomers to the forum - companies from the Maldives archipelago.

Proceeding from the opinion of managers of local hotels and recreation areas as well as representatives of the Tourist Association and the Ministry of Culture and Tourism that participated in the forum, the domestic recreation market has relatively easy lived through recent upheavals caused by the devaluation of the national currency. Thus, according to head of the Ministry of Tourism Abulfas Qarayev, a recent monitoring revealed no increase in prices at metropolitan and regional hotels. "We believe that there should be no price rise during the summer holiday season, either, because there are no commercial reasons that can be attributed to changes in the existing balance. Even the newly opened hotels and recreation areas make attractive offers to tourists and provide benefits," the Minister said.

Head of the Azerbaijan Tourism Association (AzTA) Nahid Bagirov also believes that on the whole, the country's tourism sector has gone through the recent period of currency disturbance without much damage. However, the devaluation has had a negative impact on local travel agencies after all: since trips abroad are booked and paid for in foreign currency, the devaluation of the manat has increased the cost of tour packages by a third. At the same time, ticket prices with all airlines operating in Azerbaijan, including state-owned AZAL, have gone up.

It is noteworthy that not too long ago, the position of travel agencies offering holiday trips abroad was more than stable and did not cause any concern. Dynamic growth of people's incomes has contributed to the expansion of holidaymaking in foreign countries in recent years. For comparison: the volume of spending by Azerbaijani travellers was less than 745m dollars in 2010, but already in 2011, this sum doubled to reach 1.689bn dollars. However, the year of 2012 proved to be most significant in this respect, as about 3.8 million Azerbaijani citizens visited foreign countries at that time. The turnover of outbound tourism amounted to 2.477bn dollars that year, exceeding the volume spent by citizens on recreation within the country for the first time. In the next two years, domestic tourism lagged behind in terms of turnover, and the positive balance was clearly shifted in favour of outbound tourism.

However, even in this year's complicated situation, local travel agencies have shown maximum responsibility and professionalism. "The critical period is over and all travel agencies operating in the country have avoided defaults and bankruptcies," Nahid Bagirov told R+. "We quickly developed anti-crisis measures together with local tour operators, and the latter assumed a significant portion of the risks. At the same time, the host parties - foreign hotels, transport companies (transfer) and other partners of our agencies that have agreed to certain discounts for payment of services - helped stabilize the situation". At the moment, however, it is very difficult to judge whether outbound tourist flow dynamics will remain at the current level or go down. This will become clear in early June, by the start of the peak of the holiday season, the AzTA head says.

At the same time, those involved in the domestic tourist market can take advantage of the current situation and gain from the reduction in the national exchange rate. After all, in the current situation, quite a few Azerbaijani citizens will prefer relatively cheap holidays at home instead of trips abroad which are becoming much more expensive. In turn, the cheaper manat will make the services of local companies dealing with inbound tourism more affordable for foreign tourists. "Today, the vast majority of tourist operators and hotels have not increased their prices for tourist services inside the country, and bearing in mind the reduction in the exchange rate of the manat, one can expect a substantial increase in the flow of tourists to our country," Bagirov stressed. "Whereas in the past a tourist package costing 1,000 manats set tourists back 1,100 euros, now it costs less than 900 euros. The current situation offers an opportunity to increase the flow of tourists into our country by 20-25 per cent, and such a course of events will help compensate for the losses in the outbound tourism segment." According to the head of AzTa, hotel rental services, transfers and restaurants and other services facilities that are priced in manats have become relatively cheaper for foreign tourists. An increase in prices in this segment now is hardly possible because of the reduction in internal demand and fairly high competition in this segment of the market. For this reason, one should not expect an increase in prices during the European Games.

Going by the opinion of the managers of hotels and other leisure facilities in Qabala, there is still a steady demand in the business tourism segment. Apart from local companies, representatives of the corporative sector in Russia, Kazakhstan and Georgia are taking advantage of the services of tourist facilities in Qabala and organizing conferences, seminars and thematic forums. Country parks and a number of spas and hotels in the resort of Naftalan are not planning to increase their prices and are looking to maintaining the number of visitors.

For their part the Georgians and the Iranians are talking up the increase in tourist exchange between our countries "The fall in the oil price and reduction in the rate of exchange of Azerbaijani currency has had a favourable impact on tourist exchange between our countries," Ahmad Khemzezade, deputy director of the Iranian Tourist association, told R+. "For many years Iran has been maintaining a positive balance in tourist exchange. Last year alone 570,000 Azerbaijanis visited the Islamic Republic. But there is a new trend today - the number of Iranians wishing to visit Baku and other towns in your country is on the increase. A key factor here is the change in the exchange rate: recently one manat was equal to 4,000 toman: today's rate is 3,000 toman, and this is a very strong argument for Iranian travellers.

The picture in Georgia is a positive one, too. "There has been no reduction in the flow of tourists - the devaluation of the manat has been compensated by a reduction in the exchange rate of the Georgian lari," Teona Nanava, the head of a department of the Georgian National Tourist Administration, told R+. In January-February this year over 80,000 Azerbaijanis visited Georgia, whereas for the same period last year the figure was no more than 73,000. Overall, 1,282,000 Azerbaijanis visited Georgia last year, a 20 per cent increase on the figure for 2013.

However, experts of the Ministry of Culture and Tourism and AzTa believe that the increasing activity of local hotels and tourist operators in promoting the country's tourist potential abroad must become a major trend in the short term. The services of Azerbaijani hoteliers are also due to be promoted on the domestic market and four tourist fairs have been planned for Baku this year. Fairs of this kind have become quite popular all over the world and they have proved to be a very effective means of attracting and informing potential tourists about the variety of opportunities in the leisure sector. Specifically, the fairs planned for Baku will help to demonstrate our country's unique tourist potential, from its recreational infrastructure, places of interest and monuments to its unique capacity for staging major events and arranging tourist excursions.