GEOPOLITICS OF TOURISM

Following a period of notable recovery in the recreational sector between 2022 and 2024, Azerbaijan experienced a decline in incoming tourism. This is partly due to negative dynamics in two key tourist markets: Russia and India. However, the decline in other geographical areas also indicates the existence of long-standing unresolved industry problems. These include the high cost of air tickets and the lack of market alternatives such as discount airlines, the relatively high cost of hotel services and public catering, as well as the low level of service and entertainment, which is particularly noticeable in the regions of the country.

Barriers to tourist flow

With the exception of the extended lockdowns that were implemented during the course of the coronavirus pandemic, tourism in Azerbaijan has developed quite dynamically over the past decade. Following the industry reforms carried out in 2016, which included the introduction of simplified digital visa procedures and a reorientation of the industry towards budget destinations, it has been possible to establish mass inbound tourism. Our country's strategic investment in a comprehensive recreational infrastructure in the capital and regions has enabled us to aggressively expand our tourist markets, not only in neighbouring countries but also in distant foreign markets. The incoming segment achieved its greatest success in 2019, the pre-crisis year, when an absolute record for all years of independence was set at 3.2 million foreign tourists entering the country.

This record has not yet been broken. However, in the post-pandemic years, the domestic tourism sector has been able to recover to more than three-quarters of its pre-crisis levels. Last year was the most significant in this regard, with almost 2.627 million foreigners and stateless persons from 196 countries visiting the country, ensuring a 25.9% increase over the previous year. The total expenditure of foreign tourists in our country last year exceeded $5.1 billion, and the recreational sector accounted for 4.5% of the country's GDP.

Unfortunately, it was not possible to maintain the momentum, and this year has been quite challenging for the development of inbound tourism. In particular, between January and October, approximately 2.171 million tourists arrived in Azerbaijan, which is 1.7% less than in the same period last year.

Due to a number of subjective reasons related to geopolitical problems, there has been a noticeable decline in tourist traffic from Russia and India, a number of post-Soviet countries, as well as Middle Eastern countries, where conflicts have complicated travel. Notably, there was a 12% decrease in Russian tourists entering our country from January to September, and a 13.4% decrease from Middle Eastern countries during the same period.

Kanan Guluzade, advisor to the chairman of the State Agency for Tourism (SAT), provided local media with the reasons for this. According to Guluzade, the 1.7% year-on-year decrease in the number of foreign citizens visiting Azerbaijan in the first ten months of this year is attributable to negative trends in two of the country's primary tourist markets: Russia and India. He stated that, in the initial ten months of 2024, a total of 6,600 flights were operated to Azerbaijan from 27 airports in Russia. However, this year, this number has decreased to 4,500 flights from 17 airports, indicating a 37% reduction in the geographical coverage of flights and a 32% reduction in the number of flights. This has resulted in a decline of 100,000 Russian visitors, equivalent to 15.9% of the same period in 2024.

Following the Indo-Pakistani conflict in May and the subsequent actions and rhetoric from Delhi, there has been a significant decline in tourist traffic from India since June. Therefore, from June to October, the number of tourist trips from this country to Azerbaijan decreased by more than 2.9 times in comparison with the same period last year. Consequently, the overall statistics for January-October show a decrease of 59,100 Indian citizens visiting our country.

China enjoys the situation

Whilst the current situation is not ideal, it is not critical. Several other key destinations have experienced a notable surge in tourism. Among these countries, China occupies a special place. Indeed, in just ten months, the number of guests arriving from the Middle Kingdom increased by 150%.

The number of arrivals from European countries also increased by 9%, as did those from Israel (almost twice as many), North-East Asia (by 40%) and a number of Central Asian countries (by 22%).

During the China Visitors Summit forum, Fuad Naghiyev, chairman of the State Agency for Tourism, stated that the agreements reached during the state visit of Azerbaijani President Ilham Aliyev to China represent a new stage of cooperation in the field of tourism between the two countries. "At present, the focus is on two key areas of tourism relations with China: promoting the China Ready concept (preparing to receive Chinese tourists) in our country and expanding marketing activities in China."

Mr Florian Zengstschmid, Chairman of the Board of the Azerbaijan Tourism Bureau, has announced that cooperation in the field of tourism between Azerbaijan and China is expanding rapidly. "China is currently the world's largest outbound tourism market, and Azerbaijan's share in this segment is growing every year. The visa-free regime between the two countries has been a significant factor in the increase in tourist flows," Zengstschmid emphasised.

Azerbaijani-Chinese cooperation in the recreational sector is considered to be one of the most promising and well-organised areas. At the same time, it should be acknowledged that geopolitical dilemmas and the intensification of global conflicts undoubtedly have an impact on such a sensitive area as tourism.

Unused airline tickets

However, there are many subjective factors in our country that hinder the dynamic development of the industry and the growth of tourist flows, and these problems have been raised in parliament.

"The government should pay close attention to the decline in the number of tourists compared to last year. Therefore, in the initial ten months of this year, the number of tourists who arrived in our country was 2.171 million, which is a decrease of 1.7%. For comparison, the relatively small country of Georgia received 4.307 million foreign tourists, which is twice as many," said MP Gudrat Hasanguliev at a plenary session of parliament. The MP believes that the reasons for this situation require careful study. He is of the opinion that the visa regime for citizens of the United States and European countries should be abolished, and that the land borders should be opened. Hasanguliyev noted that there are no security threats and there cannot be any, and that as a result the borders must be opened to allow Azerbaijanis living in Georgia and Iran to come to their homeland safely. Among the reasons hindering the development of incoming tourism, he also cited the high cost of services, including air tickets, hotel accommodation and prices in the catering system.

According to the expert Jeyhun Ashur, when choosing a country for a holiday, the primary consideration for most people is the cost of air tickets. Azerbaijan is poised to become a more lucrative destination for foreign guests. Due to the closed land borders in our country, most flights are operated through Baku International Airport. The current situation is such that regional airports are empty, and this has a negative impact on the distribution of tourists across regions.

In this regard, it is necessary to follow international practice and transfer one or even several regional airports to a foreign company on a long-term lease with the prospect of attracting budget airlines (low-cost carriers). This step is necessary given that maintaining the infrastructure of small regional airports that are not busy with regular flights is very costly for the state budget.

It is worth noting that two years ago, similar steps were discussed at the expert level: Azerbaijan Airlines (AZAL), which effectively owns regional airports, is considering the creation of base hubs for foreign airlines and has held negotiations with Wizz Air, Pegasus and Flynas.

The expansion of international low-cost airlines within the country, along with the introduction of budget charter flights to popular destinations, has been a long-standing concern in the field of domestic tourism. The relevance of this issue is twofold: firstly, it is dictated by the requirements of the development of the incoming sector, and secondly, by the needs of outgoing tourism, which has also seen a decline this year.

According to the State Statistics Committee, in January-October 2025, the total number of Azerbaijani citizens travelling abroad decreased by 2.3% compared to the same period last year.

In order to improve the situation, AZAL recently held a working meeting with representatives of the Hungarian low-cost airline Wizz Air. The purpose of the meeting was to discuss the expansion of the route network between Azerbaijan and the countries of Central and Eastern Europe. During the meeting, the opening of direct flights between Baku and Bratislava (Slovakia) was discussed, as well as the inclusion of Bucharest (Romania) and Warsaw (Poland) in the route network. The parties also considered the possibility of Wizz Air flights from regional airports in Azerbaijan and assessed potential basing models. This approach will create new momentum for the development of tourism, business mobility and the strengthening of international ties in the country's regions. The overarching objective is to establish a more extensive, competitive and accessible air route network.

It's all about price

It is also vital to reduce hotel prices and improve service standards in the hotel industry. Furthermore, the quality and pricing of catering and hospitality in general must be improved. In recent years, this work has been carried out by expanding the participation of hotels in the National Star Classification System programme and issuing them with the relevant certificates. In accordance with the new Law on Tourism, it is mandatory for all hotels to apply for star classification within six months of commencing operations. It is clear that this project must be accelerated by connecting the majority of the over 600 hotels and hotel-type facilities in the republic to the star classification system.

With regard to the issue of pricing, it is important to note that finding a solution will require more than just one year. Shahin Melikov, head of the Sheki Regional Tourism Administration, has stated that the State Agency for Tourism does not have a mechanism to influence prices in tourist facilities. He explained that the agency's position is based on the fact that in a market economy, prices are formed in accordance with supply and demand. As the tourism industry evolves and competition intensifies, there will be shifts in service quality and pricing.

One of the issues currently being faced by the hotel industry in the country is a shortage of qualified personnel. At present, a proportion of the national workforce is employed in Qatar, the UAE, Turkey and European countries, largely due to higher wages on offer.

The flow of tourists to the regions is growing, and in order to provide quality service, it is necessary to actively involve tourism companies in the training process. In order to address this matter, meetings are being organised between government agencies and representatives of the tourism sector. This is a form of network interaction: it is necessary to raise awareness among specialists working in this field," believes Melikov.

In the future, the State Agency for Tourism also needs to strengthen its involvement in regulating the sometimes complicated relationships between hotels and travel agencies. It is also necessary to encourage the creation of a mechanism of preferences (including in the off-season) for domestic travel agencies, which express dissatisfaction with the lack of discounts in the pricing policies of local hotels.

A comprehensive solution is required to help the sector withstand external negatives, survive periods of geopolitical crisis, and increase its weight in the real economy.