NEW SEASON

Despite the rainy and cool weather in May, the start of the peak tourist season coincided with an exceptionally hot June. With favourable forecasts extending until the end of summer, this bodes well for Azerbaijan's tourism sector to capitalize on its potential. The steady rise in inbound tourism and the development of new tourist spots, including eco-friendly, sports, and leisure areas, also ensure this. A substantial increase in tourist traffic is anticipated due to the upcoming UN climate change conference (COP29) scheduled to take place in Baku. Accordingly, the State Agency for Tourism (SAT) anticipates achieving the positive results of 2019 by the end of 2024, marking the completion of the post-pandemic recovery phase for the recreational industry.

Aiming to Set a New Record

As per the World Economic Forum's (WEF) Travel & Tourism Development Index, Azerbaijan has climbed 7 positions compared to the previous report, now ranking 56th out of 119 countries. Ranking second among CIS countries, Azerbaijan has notably enhanced its standing in four key components of the WEF Index. These include "Availability of a suitable environment," "Travel and tourism policies and compliance conditions," "Factors influencing travel and tourism demand," and "Sustainability of travel and tourism." Additionally, Azerbaijan has improved its reputation as one of the safest countries globally. Particularly encouraging is the progress seen in inbound tourism.

These achievements highlight the international acknowledgment of Azerbaijan's recreational sector development and its resilience in overcoming unforeseen events such as the COVID-19 pandemic within a relatively short timeframe. Following significant setbacks during the pandemic, it was only in 2022 that a doubling of inbound tourism growth was achieved from a low starting point. Building upon these accomplishments in 2023, foreign tourist arrivals rebounded to 65% compared to the previous period. Nearly 2.086 million visitors from 187 countries have already explored Azerbaijan, marking a 30.2% increase from the previous year. While this is a notable achievement, it falls short of the prosperous year of 2019 when 3.2 million foreign visitors arrived in the country. Head of SAT's staff, Kanan Gasimov, expressed optimism, stating, "We anticipate reaching the performance levels of the record-breaking year 2019 by the close of 2024, thereby finalizing the recovery process for Azerbaijan's tourism sector."

Spotlight on Development

Azerbaijan possesses significant potential to further enhance both inbound and domestic tourism. Leading in the Caspian region for multistar hotels under renowned brands, top-notch recreational facilities and dining establishments, ski and health resorts, along with modern airports, Azerbaijan offers a diverse array of options. A robust hotel infrastructure has been established with an eightfold increase in the number of operational hotels and hotel-type facilities since 2010, totalling around 757 establishments presently. This recreational infrastructure operates efficiently with a relatively high hotel sector turnover rate. According to the State Statistics Committee, domestic hotels generated revenues of ₼111.7 million in the first quarter of this year, reflecting a 31.1% increase compared to January-March of the previous year.

These figures underscore the effectiveness of investments in the tourism sector, positioning it as the most dynamically growing branch within the non-oil sector concerning investment returns. The sustained growth in local hotels is attributed to recent strategic policies emphasizing attracting foreign tourists. To enhance service quality within the hotel sector, significant efforts are underway to expedite certification processes, award star ratings to hotels, and bolster staff qualifications.

Notably, Baku is set to host two major events by year-end: Formula 1 and COP29. In anticipation of increased tourist influx, new residential complexes are under construction in Sea Breeze while preparations for guest accommodations span across Absheron. Azada Huseynova, deputy chairman of SAT, affirmed efforts to ensure top-notch preparations for COP29 in Baku and Sumgayit along with Absheron district, where over 300 hotel facilities have been inspected with approximately 200 classified and rated. Notably, around 40 hotels required improvements to meet star classification standards while similar evaluations are planned for hotels outside these regions.

GAT, alongside the Tourism Bureau and other specialized departments in Azerbaijan, are actively expanding flight routes to CIS countries, including Central Asian states, as well as Indochina and Persian Gulf regions where local tourism products are being promoted at relevant expos and forums. Javanshir Bayramov, Deputy Chairman of the Tourism Bureau Board, announced plans to establish new tourism representative offices in Moscow by September 2024 and Istanbul by December of the same year. The existing tourist office in Israel is fully operational with collaboration ongoing with local representatives in China and India. Islamic countries are given priority for promoting domestic tourist products as reflected by 43% of tourists visiting Azerbaijan from Organization of Islamic Cooperation member states during January-April this year.

Incentivising Growth

Boosting inbound tourism stands as a long-term government objective aimed at diversifying non-oil sector exports and increasing foreign exchange earnings significantly. The "Socio-Economic Development Strategy of Azerbaijan for 2022-2026" outlines plans to elevate tourism's contribution to non-oil GDP by 1.5 times compared to 2019 while enhancing industry revenues by an additional 20%. GAT Chairman Fuad Naghiyev highlighted key targets including elevating foreign tourist numbers to 4 million and domestic tourism visits to 6 million by 2026. Strategies to achieve these goals involve attracting new international hotel brands and creating favourable fiscal conditions for local and foreign investors engaged in developing Azerbaijan's tourism potential. Eldar Alimuradov, Chairman of Azerbaijan Hotel Association, revealed plans for several international hotel brands entering the market this year while a 75% property tax reduction for hotels and sanatoriums in regions over a three-year period has provided crucial support to the industry.

This, along with other supportive measures to boost tourism in various regions of the country, is also attracting international hotel brands to the Garabagh region. Efforts by specialized agencies in Shusha, Lachin, Kalbajar, and Terter districts have initiated the construction of the first tourist and balneological facilities. The most extensive progress has been made in Shusha, where three hotels - Qarabağ Hotel, AvanShusha Plaza Hotel, and Kharibulbul Hotel - have been restored and are now operational. Additionally, plans include constructing small boutique hotels, guest houses, hostels in the city and its outskirts, with the upcoming launch of a high-class five-star hotel complex, Qarabağ Zəfər.

In a bid to enhance industry capacity and raise tourism's share in the country's GDP, steps have been outlined to address seasonality challenges, a significant hurdle in industry growth. Promising destinations are being developed, and beach infrastructure is being modernized to eliminate seasonality factors. At the start of the summer season, efforts were focused on cleaning and enhancing neglected coastal areas in Shikh, Goradil, Novkhany, Buzovna, Pirshagi, and Sahil villages. These areas underwent repairs and preparations for rescue stations by the Ministry of Emergency Situations, soccer and volleyball fields, changing rooms, shower cabins, sanitary facilities, deck chairs, gazebos, and garbage containers installation. Special provisions have also been made for visitors with disabilities, including dedicated paths, ramps, and free access to all beach facilities.

Diverse Development

Recent strides have been made in promoting new destinations. GAT specialists are formulating a health tourism strategy for Azerbaijan by studying optimal models from countries like Türkiye, Malaysia, Czech Republic, Thailand, among others, to adapt relevant experiences locally. Diagnostic assessments of natural resources are planned for health tourism development in liberated territories. In parallel, sports tourism offerings such as hiking, glamping, paragliding, windsurfing, diving, and rafting are actively being pushed in Azerbaijan with robust marketing campaigns targeting existing and emerging markets. The tourism marketing strategy for 2024-2026 emphasizes medical tourism alongside cultural and ethnographic experiences, business tourism through organizing international events and conferences, and environmental initiatives.

To bolster "green" tourism in Azerbaijan, national parks have been established with plans for additional parks in the pipeline. Equestrian trails, hiking routes, and mountaineering paths wind through the scenic mountain forests of the Greater Caucasus. Azerbaijan boasts around 350 active mud volcanoes; a specialized tourist complex showcasing this natural wonder was inaugurated with President Ilham Aliyev's involvement. Interestingly, 700 of some 2,000 mud volcanoes known on the planet are located on the Absheron Peninsula, a group of islands in the Caspian Sea, as well as in Shamakhi, Gobustan and South-East Shirvan in the east of Azerbaijan.  A visitor centre at the Gulinj mud volcano complex offers insights into mud volcanoes' characteristics and healing properties along with showcasing rare minerals from Azerbaijan. Workshops on pottery and oil painting are slated to commence alongside informative exhibits on Azerbaijani wildlife and nature history. The exhibition on the history of Azerbaijani nature presents interesting exhibits: skeletons of wild and domestic animals - representatives of Azerbaijani and world fauna, as well as insects, amphibians and reptiles.

On the initiative of Pesident Aliyev, a similar tour complex - Yanardagh State Historical, Cultural and Natural Reserve - was opened in June 2019. It is located 27 kilometers from Baku, near Mehemmedi settlement, on the slope of a limestone hill, which is notable for the unextinguished flame of combustible natural gas. A museum with three thematic zones, an amphitheatre for 500 people for open-air concerts, handicraft workshops and stores, a souvenir selling point, etc. have been created here.

As demining efforts progress in Garabagh and Eastern Zangezur regions, opportunities for developing the scenic Lesser Caucasus mountains' natural and tourist potential emerge. Plans are underway for a recreational and balneological zone rich in thermal springs in Kalbajar while a medical centre in Istisu village is set for restoration. Lachin district will witness a beach and recreation centre along the Khakari River; nearby Abdallar caves have been restored for ethnographic and ecological tourism development. GAT specialists are designing nature tourism sites in Hadrut settlement with ongoing projects like the Sugovushan recreational park. Establishing the State Historical-Architectural and Natural Reserve "Tug" in Khojavand district is also prioritized for ecological tourism advancement.

Tourism is gradually living up to expectations of becoming a leading and profitable sector within Azerbaijan's non-oil industry. This trend signals increased focus on its development and growth from both governmental bodies and market stakeholders alike.