VACATIONING ON A BUDGET

Azerbaijan's tourism industry is entering a new phase in its development caused by changes in both the country's economic priorities and the region's tourism hotspots. These changes are affecting the industry's fundamental elements, including transportation, tourism agencies' priorities for incoming and outgoing tourism, hotel pricing policies, and, of course, how the industry in general is regulated. New trends in the development of Azerbaijani tourism were presented at the recent 15th annual Azerbaijan International Tourism Fair 2016.

Helpful problems

Having bypassed a beginning phase and already formed substantial hotel and hospitality potential, Azerbaijan's tourism industry has in recent years been able to occupy a stable position on the world's tourism map. However, despite a developed tourism infrastructure, for the past few years Azerbaijan's hotel sector and passenger aviation have been perceptively outcompeted by neighbouring Turkey and Georgia in terms of the cost and quality of the services on offer. It is these factors that have kept Azerbaijan's resorts from turning into hubs of regional and global importance, as well as preventing the rapid growth of foreign tourists flowing into the country. 

Nevertheless, the energy crisis of the past year-and-a-half and the devaluation of the manat in 2015 have led to a radical change in established trends. The two-step devaluation of the national currency made the services of local incoming tourism-related companies more affordable to foreign tourists. The current situation offers the opportunity to increase the flow of tourists into Azerbaijan by 20 to 25 per cent, which can help compensate for losses in the outgoing tourism sector, whose services have grown significantly more expensive.

The second most important factor that could lead to more foreign guests in Azerbaijan has to do with serious disturbances on the tourism market of the former Soviet Union. The political conflict in the Middle East has led to the virtual cessation of Russian mass tourism to Egypt and Turkey. Russian tourist agencies in turn have begun to look for affordable alternatives in nearby countries, including Azerbaijan. The lifting of international sanctions against Iran has also enlivened tourism exchanges between countries. 

This year another important decision was made - low-cost airlines were brought into the country. A new company, AZALJET, a division of AZAL, has set up budget flights for the most in-demand routes. Since this March flights have been made into the Baku and Qabala airports by two other budget airlines - Hungarian WizzAir and Turkish Pegasus. Less than a month has passed since the appearance of low-cost airlines on the market, but already in the first days of budget flights more than a third of tickets for the most popular tourist destinations have been purchased.

This gave appreciable support to local tourism agencies involved in outgoing tourism, which have been struggling to get out of the crisis, while at the same time stimulating incoming tourism by making access to Azerbaijan's resorts less expensive. 

Due to the abovementioned, Azerbaijan now has favourable conditions for the development of inexpensive mass tourism, which, according to experts, should contribute to a growth in tourists from abroad. 

Dropping prices

New trends in the Azerbaijani tourism industry can be most easily seen at the relevant annual exhibitions of the AITF. For fifteen years the forum has hosted approximately 2,200 companies from over forty of the world's countries, turning the entire Caspian region into an important exhibition centre for the tourism industry. A few days ago the founders of the forum, the company Iteca Caspian and the Ministry of Culture and Tourism, held this year's Azerbaijan International Tourism Fair 2016 at the Baku Expo Centre. This year 330 companies from 29 countries worldwide offered 80 travel destinations at the exhibition. Foreign companies and national booths made up around two-thirds of the participants. The tourism forum also included the international exhibition Everything for Hotels, Restaurants, and Supermarkets HOREX Caucasus-2016 and an exhibition of equipment and supplies for supermarkets.

Once again Azerbaijani president Ilham Aliyev and his wife Mehriban Aliyeva were guests of honour at the tourism forum.

Speaking at the opening of the exhibition, Minister of Culture and Tourism Abulfas Qarayev said that more than 250 tourism companies and 570 hotels currently operate in the country, with the flow of tourists into the country having increased fivefold over the past decade. "Our tourism sector has been able to keep positive growth in spite of global crises and regional financial problems. Its development will be given enormous attention going forward, to which end a new strategy and a new law on tourism will soon be introduced," stated Qarayev. According to the minister, today tours to Azerbaijan are being actively marketed globally, and the work is showing positive results. Despite neighbouring Armenia's attempts to create a negative image of our country, vacationing at Azerbaijani resorts remains absolutely safe and comfortable for tourists from all regions of the world: this is proven by the yearly growth in the number of travellers. 

In the opinion of the tourism and culture minister, steps taken since last year to streamline the work of tourism industry companies while heightening competition in the market have noticeably improved prices and quality of service in Azerbaijan. 

"The offerings from tour agencies and hotels presented at the AITF-2016 exhibition prove that now a ten-day stay in the countries of the region can be had for a sum of 250 manat, with three meals a day for children. In particular, at the resorts of Masalli District a vacation can cost as little as 15 manat a day, including breakfast," said Qarayev.

Now that the manat's exchange rate has lowered, an increase in foreign tourists from abroad can be expected. For example, a little more than a year ago a 1000-manat tour package cost guests 1200 dollars, while today it costs half that. 

"After the manat's foreign currency value decreased, the services of hotels, restaurants, recreational services, entertainment, etc., became noticeably cheaper. Moreover, the latest market research confirms that the majority of hotels and vacation zones have not raised their prices when counted in manats. Artificial price hikes in the tourism industry have not been seen. Only in a few cases was an insignificant price increase of 10-15 per cent observed in connection with higher prices for foods served at hotels," Azerbaijan Tourism Association (AzTa) head Nahid Bagirov told R+. 

Betting on Tourists from Russia and Iran

According to Bagirov, a serious breakthrough can be expected with Russian tourists. Recently the respected tourism service Travel.ru included Baku in its list of the top ten foreign cities popular for spring trips with children. Experts at Travel.ru also predict that this year Baku, along with Sochi and Barcelona, will enter the top three most-visited cities for Russia's Formula One racing fans. The advantages of this trend prompted the Ministry of Culture to open a tourism office in Moscow. We will be represented by Russian company Tour a Vent, the first tour operator specializing in Azerbaijan. Its specialists have developed a variety of tours for Russian tourists, who currently account for a third of all foreign guests visiting Azerbaijan. The tours include sightseeing in Baku, the Sahdag and Tufan ski resorts, the rest of Naftalan, and relaxation on the shore of the Caspian.

The Iranian market looks no less attractive for incoming tourism: according to AzTa estimates, this March saw a sharp increase in the number of travellers from that neighbouring state. Something like 50,000 tourists came to Baku and other Azerbaijani cities from the Islamic Republic of Iran during Novruz. "Tourist ties between our countries are growing rapidly: in 2015 1.2 million Azerbaijani citizens visited Iran, of which no less than a fourth visited to travel or vacation. In turn lately citizens of the Islamic Republic [of Iran] have seen Azerbaijan as the most attractive tourist destination after Turkey," stated Ibrahim Jalil, head of investments for Iran's Maku Special Economic Zone. He says the number of vacationers from Iran is in no small part explained by the change in the exchange rate between the two countries' currencies: not too long ago one manat was worth 4,000 toman, while today's rate is around 2,000. That is quite a weighty argument for Iranian travellers. 

"The overwhelming majority of Iranian tourists focus on visiting Baku. It is essential that we overcome the inertia of the established approaches of tourism companies from the Islamic Republic [of Iran], who only work in the direction of the capital and coordinate their tours with hotels alone," holds Nahid Bagirov. "To realize the tremendous tourism potential of the provinces of Azerbaijan, it is crucial that we get Azerbaijani tour agencies involved in forming flows of Iranian tourists." 

The advantages here are quite obvious. Since in accordance with agreements signed with hotels, Azerbaijani tour operators can offer foreign guests cheaper and more varied tour packages. This May an AzTa initiative will have a delegation of tour operators and hotel industry representatives visit the Islamic Republic of Iran, where they are expected to sign a memorandum with an Iranian association of their counterparts. The agreement will allow Iranian and Azerbaijani tour operators to set up direct contacts, as well as broaden and diversify the mutual flow of tourists. 

Reasonable prices, five-star hotels in the provinces, and the budget flights will provide for a stream of tourists from the Persian Gulf states, believes tourism minister Qarayev. A recent visit by an Azerbaijan delegation to Qatar and Kuwait contributed to the promotion of tours to our country. There are also ongoing talks to set up direct AZAL flights to Qatar and Kuwait. A definite uptick in European and other tourists should also be provided by the Formula One European Gran Prix, to be held in Baku in June of this year. Detailed information about this auto racing competition was provided at a special booth at the exhibition. 

AITF-2016 gives us reason to state that, despite economic difficulties, the Azerbaijani tourism sector now has new opportunities to attract tourists due to the lowered exchange rate of the manat, cheaper flights, and heightened demand from neighbouring countries.