Author: Khazar AKHUNDOV
The tourist boom observed in Azerbaijan over the past three years indicates that the strategy chosen for the development of national recreational sector was indeed right. According to statistical data for the past summer season, given the high competition in the region, Azerbaijani hotels and tour operators should put more efforts to increase the level of service, lower prices and launch a more active advertising campaign.
Balance surplus
According to the tradition established in Azerbaijan, the results of the tourist season are reviewed at the end of September, which coincides with the UN-supported World Tourism Day celebrated globally on September 27. So, a preliminary analysis shows that the tourist season of 2018 was quite positive: the number of foreign tourists increased, tourist services sector showed a surplus with a tendency to diversify the geography of tourist flow.
In particular, according to the State Statistics Committee, nearly 2 million foreign nationals and stateless individuals from 193 countries visited Azerbaijan during January-August 2018, which is 8.5% higher than last year. At the same time, the growth dynamics surely exceeds the world average statistics. Thus, according to the United Nations World Tourism Organization (UNWTO), last year the number of travellers in the world reached 1.3 billion, which is the best indicator in the last 7 years. The increase in relation to 2016 was 7%. UNWTO forecasts for 2018 are somewhat modest - growth is expected to be around 4-5%.
At the end of 2017, 2.7 million tourists visited Azerbaijan, which is 20% more than in 2016, which was also a very successful accomplishment. Even considering the slowdown in the growth rate of external tourist traffic, Azerbaijan still ranks among the top three leaders of the post-Soviet region, and is the second in the South Caucasus after Georgia, which granted access to about 5.9 million foreign tourists in January-August 2018, which is 12.2 % more than in 2017.
Incidentally, Bloomberg included Azerbaijan (along with Turkey, Georgia, Macedonia and Iceland) among the ten most rapidly growing tourist destinations in the world. As one of the important markers indicating a growth of global interest in our country, Bloomberg indicates that booking hotels in Azerbaijan through one of the largest travel companies of the world, Intrepid Travel, has tripled. Moreover, foreign tourists show the greatest interest in the capital of Azerbaijan. "Baku is a fascinating hodgepodge of old and new. Its cobbled Old Town streets are lined with market stalls and well-preserved buildings, while the Flame Towers downtown are a modern architectural marvel in the vein of the Burj Khalifa," Bloomberg quotes the COO of the oldest (since 1758) travel company Cox & Kings, Warren Chang.
Another important evidence of positive dynamics in Azerbaijan's recreational sector is the impressive surplus of the balance of tourist services for the third consecutive year. According to the Central Bank of Azerbaijan, in the first half of 2018 the surplus reached $223.4 million, which is 19.9% more than in the same period of 2017. This positive trend has remained for three years. In other words, foreign tourists spend more in Azerbaijan than Azerbaijanis abroad do, and the country is closer to solving one of its strategic tasks: making the tourism sector a stable source of foreign currency.
Decline in prices of hotel services due to the devaluation of the manat, as well as the simplification of the visa regime thanks to the introduction of ASAN Viza electronic system played an instrumental role in the development of recreation sector of the national economy.
This process was also accelerated with the expansion of flight routes with a number of regional states that are promising in terms of attracting tourists. In coming years, Azerbaijan Airlines (AZAL) plans to open new destinations from Baku, as a result of which in 2020 the annual passenger traffic of the Heydar Aliyev International Airport should exceed 7 million passengers.
Middle East crisis
Simplification of the visa regime, as well as the optimisation of air travel, also contributed to increase in the tourist flow to Azerbaijan this summer.
"As in 2017, the main flow of tourists from abroad was predominantly from the Arab countries. This is due to the opening of new direct flights between Azerbaijan and the Arab countries. This includes tourists mainly from Kuwait, Oman, and Saudi Arabia,” Nahid Baghirov, Chairman of the Azerbaijan Tourism Association (AzTA), said.
In January-August 2018, the number of Arab tourists increased 2.2 times: from Saudi Arabia and Bahrain - 2.4 times, Qatar - 1.9 times, Iraq - by 19%, Oman - by 9 ,5%. In general, every fifth tourist visiting Azerbaijan was from the Persian Gulf countries and other states of the Middle East.
Remarkably, the Arab tourists do not limit their stay in Azerbaijan to the sights of Baku, rather they actively explore the regions of Azerbaijan. According to the head of AzTA, the most sought-after destinations of our guests are Gabala and Guba-Gusar zone, followed by Shamakhi and Sheki-Zagatala zone.
“In addition to simplified visa procedures, the growing flow of Arab tourists to Azerbaijan is associated with great interest in our country. The availability of modern infrastructure in Azerbaijan, our rich and diverse national cuisine, as well as the human factor promote this interest further. According to my personal data, many Arab families visit our country several times a year,” Elnur Aliyev, the sales representative of Azerbaijan in Dubai, says.
However, in the past summer season there was a significant decline in the flow of tourists from the United Arab Emirates (UAE) and Iran. According to the State Statistics Committee, the number of tourists from the UAE decreased by 5.6%, and from Iran - by 25.4%. The reduction in the number of guests from the Islamic Republic is largely due to the tightening of international sanctions regime and the associated economic difficulties. As to the UAE, the head of AzTA noted that the main reason of decline was the increased competition in the region to attract tourists from the rich countries of the Persian Gulf. In particular, tourism companies show great interest to tourists from the UAE since they are active travellers and considered to be among the most solvent. "Competition for the Arab tourist market is very high, and many countries, particularly Kazakhstan, Georgia, Turkey, Russia, the Balkan states, are trying to create the best conditions for them, attracting them to their countries. Recently, Azerbaijan has simplified the visa regime for residents of the UAE, and I think it will allow us to regain lost positions," Baghirov said.
Caspian cruise
According to the State Statistics Committee, in the current tourist season, a 5.5% increase in tourist arrivals from Russia and other CIS countries (734 thousand people) was also observed, with a slight increase in the number of travellers from Israel. The number of tourists from the EU countries increased by 8% in January-August 2018 reaching 77 thousand people. Nevertheless, Azerbaijan is noticeably behind of the neighbouring Georgia, which this year was visited by several million guests from the EU and CIS countries.
One of the main reasons for this is the price factor: in Azerbaijan, the cost of travel services is somewhat overestimated, and today a holiday in Georgia and Turkey is much cheaper than in Azerbaijan, said well-known economist, Professor Ali Alirzayev.
AzTA Chairman Nahid Baghirov believes that it is necessary to significantly increase efforts on advertising and promotion of the Azerbaijani tourism products in Russia, making it more recognisable and attractive. "In addition, it is necessary to develop direct flights between Russia and Azerbaijan: private capital should be attracted to the organisation of charter flights between the two countries, and not rely only on state-owned airlines," said Mr. Baghirov.
Representatives of a number of Russian travel agencies also note a significant disproportion in a number of tourism segments offered by Azerbaijan. According to the Russian national tour operator Alean, Russian tourists mostly demand tours to Azerbaijan (about 70% of total demand) due to its balneological resorts, particularly in Naftalan. The second popular area is sightseeing tours and mountain tourism (30%). According to the rating of the Russian analytical agency TurStat based on the analysis of tourist trips in winter 2018/2019, the Azerbaijani ski resort Shahdagh was among the top three most popular ski resorts in the CIS countries among Russian tourists. Another ski resort, Tufandagh, which is close to Gabala, is also one of the top ten ski resorts in demand (9th place).
Russian tourists hugely demand beach tourism services, however, the supply of quality service and affordable prices in this segment in Azerbaijan is very insignificant compared to neighbouring Georgia and Turkey. "The demand in the beach tourism segment is influenced by several factors, the main of which is a few classic beach hotels on the Azerbaijani coast, and most often they are occupied either by local tourists or guests of various festivals and sporting events," said PR Director of the ICS Travel Group, Anna Filatovskaya.
Meanwhile, the active development of the Russian direction is extremely important, especially considering the fact that, according to TourStat, Azerbaijan took the 15th place in the ranking of the most popular countries among Russian tourists. In January-June 2018, the number of trips of Russians to Azerbaijan increased (by 7%; up to 349 thousand) compared to the same period of 2017.
There are also a number of other opportunities to expand regional cooperation in the field of tourism. Cooperation with Russia and Kazakhstan to organise a joint cruise tourism in the Caspian Sea with Azerbaijan looks very promising.
“The signing of the Convention on the Legal Status of the Caspian Sea may be an additional incentive for the development of tourism in Azerbaijan. In particular, this will allow us to work together with other Caspian states in terms of developing joint tours, for example, sea cruises. However, this is still reviewed and if during 2019 the question of cruise tourism in the Caspian Sea will be resolved, then this type of service will receive popularity by 2020,” Nahid Baghirov believes.
Also, the accession of Azerbaijan, Turkey and Kyrgyzstan to the project initiated by Kazakhstan to introduce a single tourist multivisa along the Silk Road would increase the tourist flow in the region as a whole. “We could also solve the issue of mutual recognition of visa regimes for foreign tourists traveling on tourist routes approved by the Turkic Council, a Silk Road Visa. Introduction of this mechanism will become similar to a Schengen visa, but only for tourist destinations," Arystanbek Mukhamediuly, Minister of Culture and Sports of Kazakhstan, said recently.
In other words, there are enough opportunities for the development of tourism. By developing regionally, we can accelerate the growth dynamics of the Azerbaijani tourism industry.
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