Azerbaijan’s Economics of Tourism

By Dr. Mehmood Ul Hassan Khan

Azerbaijan has become an ideal tourist destination due to the its increasingly growing influence in the global tourism market. It has become darling of the East and confront zone for the West. It is full of natural surprises and super lands. It is full of beauties and best hospitalities. It is indeed a wonder land where secretes of nature converges with diversity of multiculturalism. It situated at the crossroads of Europe and Asia, bordered by the Caspian Sea and the Caucasus Mountains, it was an important thoroughfare on the Silk Road, the ancient web of trade routes linking East and West.

Development of tourism sector is indeed a giant step towards diversity of economy and channels of production in the world and especially in Azerbaijan where sustainable development of the non-oil sector, in particular the tourism sector, is crucial at a time when it is impossible to fully rely on oil and gas industry. Azerbaijan ranked 25 out of 190 economies in the World Bank’s annual ease of doing business ratings, jumping from 57 in 2017.Azerbaijan’s Economics of Tourism

Despite its rapid socio-economic development and massive industrialization, Azerbaijan has also protected, preserved and played an instrumental role in conserving Islamic culture, national ethnic heritage and local architecture. It is a “Cradle of Civilization”. It is home of “Gülüstan Monument”, “Noah’s Mausoleum” and of “Momine Khatun Mausoleum” in Nakhchivan.  Azerbaijan the “Land of Fire and Pomegranates” has become a special tourist destination where visitors appreciate unique urban developments, a synergy of western and eastern architecture, natural beauty and outstanding hospitality offered in Azerbaijan’s oldest cities, spiced up by carpet museums and unforgettable tasting of Kurdamir’s locally made wine and the creamy goat cheese of Jalilabad.  Indeed, Azerbaijan has many beautiful mountainous landscapes of the Caucasus having impressive cultural heritage sites, and unique Islamic Cultural sites are the highlight on every major city and district of Azerbaijan.

The writings of Sabir in Baku and of Jalil Mammadguluzadeh in Nakhchivan, embody the very essence of highly acclaimed patriotic movements and hardships of the Azerbaijani People, describe the country’s historic landmarks as well as its remarkable multiculturalism tradition that goes back many centuries.

In the modern world and global economic system, tourism is one of the most dynamically developing and profitable sectors of the economy for each country. According to The World Travel & Tourism Council (WTTC) latest report travel & tourism sector has generated 319 million jobs, 10.4 % GDP globally during the last months. It experienced 3.9 % growth as compared to global economy 3.2 in the same period. In the globalizing world tourism is a lucrative part of the economy. It makes a great contribution to the budget of most countries.Azerbaijan’s Economics of Tourism

Turkey, Spain, Malta, Iceland, Dubai and other countries are the success stories in the field of tourism. Tourism now has global importance; it regulates social economic relations, creates reciprocal ties between countries nations, and expands business. At the end of the last century, over 450bn dollars in revenue were obtained from tourism globally, and average annual growth was over 4.3 per cent. Estimates suggest that by 2020 tourism will reach its peak of development and the number of tourists will exceed 1.5bn that year.

Azerbaijan is among the fastest-growing destinations for tourists. The country enjoys a great potential for the development of tourism. Nature, climate, historical monuments, cuisine, rich culture of the people and other factors are the core strength for the development of many associated areas of tourism. There are wide opportunities for Azerbaijan to be recognized as a tourist destination in the world.Azerbaijan’s Economics of Tourism

Most recently, Azerbaijan’s new tourism brand has won six nominations at the Transform Awards Middle East and North Africa event, which is organized annually by Transform, famous global magazine for rebranding and brand development.

According to Azerbaijan State Tourism Agency (2019), the country’s new brand “Take another look”, which was prepared by the well-known company Landor, won in the “Best use of copy style or tone of voice”, “Best place or nation brand”, “Best visual identity from the travel, leisure and tourism sector” nominations and received a bronze award for the “Best use of a visual property”. Furthermore, Azerbaijan’s new tourism brand was also awarded “Highly commended” status in the “Best implementation of a brand development project” nomination.Azerbaijan’s Economics of Tourism

Azerbaijan is a country in the South Caucasus and in the world where ancient temples stand side by side with buildings designed by the best modern architects. The image of the capital, Baku, is a bizarre and at the same time harmonious combination of antiquity and innovation.

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Azerbaijan today is known and recognized at the world level as a new attractive tourist destination on the Eurasian continent. Foreign guests speak highly about its qualitative infrastructure, unique architecture, balanced development in all sectors, ancient history and the rich centuries old diversified and dynamic culture, as well as the stability and security of a comfortable stay in Azerbaijan.

Undoubtedly, President Ilham Aliyev has played a central role in the development of tourism sector of Azerbaijan which has been further revolutionized through the implementation of various policies/programs and meaningful and interactive strategies for the comprehensive development of the country due to which tourism has become one of the most attractive sectors of national economy for inflows of foreign direct investments (FDIs).

During 2018, Azerbaijan took part in international tourism exhibition, World Travel Market in the exhibition center ‘Excel London.’ Within the exhibition, the Azerbaijan Tourism Bureau held a presentation of the new tourism branding of the country the “Take Another Look” marketing campaign.

It was a well-organized effort in the field of international marketing to offer as well as attract more and more minds and souls to visit Azerbaijan, the “ultimate beauty on earth”. One of the main goals of participation in this prestigious exhibition is to submit as many tourist offers to international markets as possible, to become a world-famous destination brand, and to introduce the unique material and spiritual heritage of the country to the global community.

Azerbaijan is now implementing a number of important measures to accelerate the development of tourism in the country, tourism being one of the main areas of the non-oil sector of the economy. Tourism is recognized as a sphere of economic activity that serves the interests of the citizens, also being a great source of income. The Azerbaijan tourism sector is becoming one of the main factors creating additional jobs, accelerating the development of road and hotel construction, stimulating the production of all types of vehicles, and contributing to the preservation of folk crafts and national culture. In short, it acts as a catalyst for socio-economic development.

The recent construction of many hotels and road-transport infrastructure meeting modern requirements, in various regions of the country, has increased interest in the regions of Azerbaijan among both foreign and local tourists. In the regard, on the decision of President Ilham Aliyev during 2018, the State Agency for Tourism was established. Tourism in Azerbaijan has been identified as a priority direction for the development of the economy, announced as an “industry of national importance.”

Moreover, Azerbaijan’s ‘Strategic Roadmap for the Development of a Specialized Tourism Industry” approved by President Ilham Aliyev in 2016 outlines the goals and objectives for ensuring the effective operation of the Azerbaijani tourism industry, which should “contribute to the formation of state and population incomes.” It is expected that over the next 10 years, the industry would make up to 10 percent of the country’s GDP. Moreover, laws “On the attraction of foreign investments into the country” and “On the repatriation of funds”, the state programme for socio-economic development and other important state documents help in the development of tourism. They have made it possible to attract foreign investors and businessmen into the local market.

Azerbaijan enjoys natural and mysterious abundance. Every nook, every region and the splendidly rich flora and fauna intrigue all who pass through. The most famous illustrious and courageous travelers compared it to the world’s most beautiful and picturesque sites. The French writer and traveler Alexandre Dumas, French archaeologist Jacques de Morgan, the Russian traveller Ilya Berezin and others commended the nature and people of Azerbaijan in their works.

Azerbaijan’s touristic potential is indeed, incomparable: from the Caspian Sea shoreline to the hiking and ski trails in the Caucasus Mountains, the fascinating East-meets-West vibe, the richly textured gastronomical scene, and its quickly expanding contemporary arts reputation. Azerbaijan is an internationally competitive, premier four-season tourism destination where travelers have access to extraordinary experiences. Its fascinating beauty inspires the world to explore it. It has all the natural and geographic potential of a tourist destination. The shores of the Caspian, the Mugan, Karabakh, the Mil plains, the mountains, forests, rivers, springs, lakes, summer recreation areas, and historical monuments are headline tourist attractions. Azerbaijan enjoys nine of the world’s 11 climate zones, adding to the range of destinations on offer. As entrepreneurship grows stronger, the opportunities for the development of tourism centres grow.

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Azerbaijan’s tourism sector strategy emphasizes event tourism, such as hosting business conferences and international sporting events. The expansion of airline destination offerings and simplified visa procedures has also opened Azerbaijan to ordinary tourists from the Middle East. Azerbaijan Airlines, or “AZAL,” (passenger) and Silk Way Airlines (cargo) began direct flights to New York in 2014. The U.S.-Azerbaijan Open Skies Agreement concluded in April 2016 has led to a further increase in commercial flights between the two countries. AZAL and Silk Way have purchased significant numbers of U.S. made aircraft over the past few years and continue to expand and modernize their fleets.

In order to attract more tourists to Azerbaijan, the government simplified its visa regime, creating ASAN (“Easy”) Visa System to process electronic visas within three days of application for citizens of eligible countries. Additionally, in June 2016, single-entry tourist and transit visa fees were reduced to $20 from $50. In February 2017, a presidential decree to create fast track routes, including adding ASAN payment and visa terminals, for entry to Azerbaijan at border checkpoints from the bordering countries Georgia, Iran, Russia, and Turkey. Other reforms included establishing a Tourism Council chaired by the Minister of Culture and Tourism, opening 15 regional offices of the Ministry of Culture and Tourism, and appointing tourism agents in 10 countries. In 2018, an independent State Tourism Agency was spun off the Ministry of Culture.

As with other sectors, the hospitality industry in Azerbaijan is dominated by a small number of large holding groups. Several well-known western chains operate in Baku, focusing on affluent tourists, business travelers, and large-scale conferences and sporting events. The Central Bank of Azerbaijan estimates that 33.5 percent of all tourist services provided in the country were for business travelers. By contrast, the market for mid-range, two and three star hotels, boutique and bed and breakfast style accommodations, hostels, and entertainment centers are being further developed.

Azerbaijan has focused on event tourism to develop the industry since 2012. It hosted the “Eurovision Song Contest” and “FIFA’s U-17 Women’s World Cup” in 2012. It hosted the first-ever “European Games” in 2016. Moreover, Baku hosted the first of five “Formula One Grand Prix” events at the Baku City Circuit in 2016. Its capital, Baku hosted the “Islamic Solidarity Games” in May 2017. Most recently, 5th World Intercultural Dialogue Form has hosted in Baku 2019. It has made tremendous investments to build a new “Olympic stadium” and adjacent housing complex for international athletes. Azerbaijan is well-positioned to host large-scale international sporting events and has put forth candidacies to host future “Summer Olympics games”, as well as to host “World Expo 2025”.Azerbaijan’s Economics of Tourism

The Republic of Azerbaijan is a miraculous country where splendid nature intermingles with centuries old rich civilization and traditions. Azerbaijan is a fairyland where fairies live in the hearts of tourists as well as locals. It is a beautiful country which has numerous places to explore. It has fascinating place to visit where common people are ever ready to hospitalize you. It is centre of humanity and birth place of ethnic diversity and pioneer of multiculturalism in the world.

Azerbaijan has great potential for the development of the tourism industry with such fascinating sights as ancient cities, palaces, fortresses, mausoleums, and mosques. Azerbaijan has always been famous for its sources of eternal fire the “atashgehs”. There is a place called Yanardag (blazing mountain) in Absheron and thermal springs in some parts of Nakhichievan, Kelbejar, Masali, Lenkoran, and Babadag provinces.

In Surakhani, there is a site of eternal flame. From ancient times, fire worshippers from remote places, and even Indian priests, came to Absheron in search of fire, and found it here. They built large temples here in Surakhani and in Ateshgah. There are more than 6 thousand historical architectural monuments on the territory of Azerbaijan. The natural climatic conditions of Azerbaijan are also unique. It has 9 climate zones exist out of the 11 in the world.

Baku and the Absheron peninsula; Nakhchivan, Guba-Khachmaz, Sheki-Zagatala, and Lankaran-Astara regions; and the historical areas of Shirvan and Ganjabasar are the most attractive for travelers in Azerbaijan. The lovely nature of these places, numerous ancient ruins, wonderful ethnographic variety and the astonishing skills of local craftsmen will leave an unforgettable impression of Azerbaijan upon its guests.

It is land of fire which full of useful energy, color, excitement, comfort and inspirations. It has rich nature, friendly climate, diversified culture, dynamic people, spicy foods and above all humanistic spirits to welcome all people irrespective of origin, race, color, caste, faith, religion or ideology. It is blessed with elements that will create good memories for tourists: rich history, ethnic and religious diversity, interesting cities to explore, delicious food and above all safety in the country.

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Azerbaijan is home to two UNESCO World Heritage Sites, plus a number of other important places that have been considered for inclusion in the World Heritage Sites list. Right in the center of Baku is Icheri-Sheher, the walled city that once housed the entire population of Baku. The other site is Gobustan, home to hundreds of thousands of petroglyphs depicting ancient life. Go beyond the obvious with trips to Sheki, Khinalug, Ateshgah, or to the many fortresses and temples that were staples of life in the region for centuries. Azerbaijan’s rich history can be explored at the many historical destinations across the country. Sheki and Shamakhi were capitals of empires that existed centuries ago, and their former imperial glory lives on in the historical sites and their surroundings.

Azerbaijan is the cultural capital of the region which has culture of Khinalug and the excellent craftsmanship of Sheki. UNESCO has recognized copper making in Lahic, silk scarves, carpet weaving, mugham and tar as Intangible Cultural Heritage.Azerbaijan’s Economics of Tourism

From the shores of the Caspian Sea to the heights of the Caucasus Mountains, Azerbaijan offers a variety of natural destinations. Summer is a great time to relax by the beach, with a variety of seashore resorts on the Caspian Sea, while winter is the perfect season for a stay at a ski resort in the mountains. There are also national parks that are great for hikes and even longer trips, while picnicking has long been a treasured tradition.

According to its official figures, as many as 848,400 tourists and stateless persons from 170 countries visited Azerbaijan in January-April 2019, which is 0.1 percent more compared to the same period in 2018, according to the State Border Service of Azerbaijan. Russia accounts for 27.3 percent of the foreigners who arrived in Azerbaijan during the reporting period, while Georgia accounts for 26.8 percent, Turkey 11.1 percent, Iran 8 percent, the UAE 3.8 percent, Ukraine and India 1.8 percent each, Pakistan 1.4 percent, Iraq 1.3 percent, citizens of other countries 16.6 percent, and stateless persons 0.1 percent. Men accounted for 69.5 percent of the visitors, while 30.5 percent were women. Compared to January-April 2018, the number of Egyptian citizens visiting the country increased by 2.2 times, Saudi Arabians 1.9 times, Indians and Turkmens 1.8 times, Chinese 1.6 times, Japanese 37, 1 percent, Canadians 31.8 percent, Pakistanis 28.8 percent, Georgians  22.6 percent, Polish  20.8 percent and South Koreans 20.5 percent.Azerbaijan’s Economics of Tourism

Meanwhile, the number of tourists from the EU countries increased by 7 percent in the first four months of 2019 and reached 34,200 people, and of those from the Gulf countries decreased by 27.5 percent to 142,900 people. Azerbaijan, the popular destination for many tourists, attracts millions of visitors every year. The beautiful nature of Azerbaijan, hospitality of its people, the country’s capital with its super modern and ancient buildings draws the attention of all tourists visiting this South Caucasian country.

Azerbaijan and Pakistan are going to open charter flights. The number of Pakistani tourists visiting Azerbaijan is growing. Thus, in 2018 more than 41,000 tourists from Pakistan visited Azerbaijan and it is expected that their number will increase in 2019 as well.

The promotion of tourism potential of Azerbaijan, simplification of visa regime for Pakistani citizens and the launch of the ASAN Visa system increased the number of Pakistani tourists visiting Azerbaijan. The work on the establishment of direct flights between the two countries is currently underway. After its completion, it is expected that the number of tourists will grow significantly. As many as 17,558 Pakistani tourists came in Azerbaijan in 2017, 3,998 in 2016, 2193 in 2015, and 1,817 tourists in 2014. The number of Pakistani tourists visiting Azerbaijan has increased by more than eight times over the past two years which is indeed a great achievement on part of Ali Alizada, Ambassador of Azerbaijan in Islamabad who has been working tirelessly to achieve the dreams of “direct connectivity” between the two countries. He is also working very hard to convince Pakistani businessmen and investors to make investments in Azerbaijan where already 300 companies and entrepreneurs from Pakistan are working.