Tourism potential of Azerbaijan: a new stage of cooperation with CAREC countries

Apr 2024, Dr. Vugar Bayramov, Murad Aghayev CESD, Azerbaijan

Dr. Vugar Bayramov
Murad Aghayev
CESD, Azerbaijan
Introduction

The tourism sector, included in the CAREC 2030 priority cooperation cluster, is one of the areas that can make an important contribution to strengthening the cooperation between the CAREC countries and Azerbaijan. The tourism sector’s share of global GDP (9.2%) is quite high. In addition to bringing income to countries, this sector significantly contributes to reducing unemployment by creating new jobs. The sector is particularly important for Azerbaijan. Surrounded by the Caspian Sea in the east, the Lesser Caucasus in the west, the Greater Caucasus in the north, and the Talish Mountains in the south, Azerbaijan, the pearl of the region in the South Caucasus, has a unique climate and geographical position, and has a fairly high tourism potential. The tourism sector is Azerbaijan’s second-highest revenue-generating sector after the oil and gas sector. Azerbaijan has enormous opportunities in “ecotourism,” considered the basis of modern tourism. There are ten national parks, ten state nature reserves, and 24 nature reserves in Azerbaijan, which are distinguished by their flora and fauna richness.

Reforming Tourism Sector

Appropriate reforms are being implemented to attract tourists to Azerbaijan. Currently, two-way visa-free travel opportunities are available to 13 countries, of which 5 (Georgia, Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan) are CAREC countries. In addition, Azerbaijan has an electronic visa issuance system (ASAN Visa) that allows faster and more convenient visa processing. This makes travel more convenient and encourages the flow of tourists. Currently, taking into account the pandemic-related restrictions in Azerbaijan, that is, the land borders remain closed, it is currently possible to travel to and from Azerbaijan only by air, which necessitates the improvement of air transport. Serious measures are being taken in this direction, resulting in the number of AZAL routes already increasing to 57 in 2023. In addition to the existing and under-construction airports in Azerbaijan, the internal transport infrastructure is being improved, which plays an important role in connecting the airports and highways, as well as the regions and the capital. A total of 18,799 km of highways exist in Azerbaijan, which ranks first among the CIS countries in terms of the quality of road infrastructure. In general, in 2022, the volume of investments in the transport sector increased by 61.5% compared to 2021. The number of hotels and hotel-type establishments in 2022 increased by 6.1% compared to 2021, and the number of facilities increased by 6.3% to 727 and 757, respectively. The reforms carried out for the development of the tourism sector are not only infrastructural but also related to the country’s positive marketing. Improvements in taxation can increase the tourism potential of regions in particular. From 2024, the property tax for real estate and hotels in other regions except for Baku, Sumgayit,Khirdalan, and Absheron regions has been reduced by 75% for a period of three years, which will lead to a sharp reduction in the costs of entrepreneurs, creating conditions for improved quality and low cost for the tourism sector. In Azerbaijan, the non-cash payment system is developing with an increasing trend, and the contactless payment system is available in most cities and regions of Azerbaijan.

Tourism Trends

An increasing trend is observed in the number of tourists visiting Azerbaijan after the pandemic period. Graph 1 shows the number of tourists visiting Azerbaijan in 2019-2023.

Graph 1. The number of tourists visiting Azerbaijan in 2019-2023.

 

Source: The State Statistical Committee of the Republic of Azerbaijan

As can be seen from the chart, the number of tourists visiting Azerbaijan in 2020 and 2021 has decreased five times due to the pandemic. In the following years, an increase in sectoral statistical indicators was observed with the end of the pandemic and the lifting of travel bans. In 2022, the number of visitors to Azerbaijan has doubled compared to 2021 and exceeded 1.6 million people. In 2023, the growth trend continued, and the number of tourists increased 1.3 times compared to the previous year, exceeding 2 million. Despite the closure of the land borders, the growth rate of tourism indicators is recorded, but the statistics still lag behind the level recorded in 2019. The mutual flow of tourists between Azerbaijan and the CAREC countries continues to increase. Thus, 15.2% (317,315 people) of the tourists visiting Azerbaijan in 2023 originate from CAREC countries. This statistical indicator means an increase of 50.2% (106058 people) compared to 2022. Chart 2 shows the country-by-country indicator of tourists visiting Azerbaijan from CAREC countries.

Graph 2. Indicators of tourists visiting Azerbaijan from CAREC countries by country.

Source: The State Statistical Committee of the Republic of Azerbaijan (Statistics of visitors from Afghanistan and Mongolia are not available)

The graph reveals that in 2023, among CAREC countries, the PRC contributed the largest number of tourists to Azerbaijan, recording a 6.5 times surge over 2022. The number of tourists from Turkmenistan increased by 2.3 times, Kazakhstan by 1.9 times, and tourists from Tajikistan and Kyrgyzstan by 1.8 times. The number of visitors from Uzbekistan to Azerbaijan in 2023 increased by 1.5 times compared to 2022. Among the CAREC countries, the most visitors to Azerbaijan were from Georgia, and a 1.3 times increase was recorded in the statistics. With this increase, the number of visitors from Georgia to Azerbaijan has exceeded 100,000. In 2023, an increase of 1.1 times was recorded in the number of visitors from Pakistan to Azerbaijan compared to the previous year, and with this statistic, Pakistan rose to 3rd place among CAREC countries after Georgia and Kazakhstan. This flow of tourists manifested not only in one direction but also in the number of people visiting CAREC countries from Azerbaijan. In 2023, 13.6% (254,570 people) of those who visited foreign countries from Azerbaijan visited CAREC countries. This means an increase of 29.6% (58,130 people) compared to 2022. Graph 3 shows the number of tourists visiting CAREC countries from Azerbaijan by country.

Graph 3. Statistics of visitors from Azerbaijan to CAREC countries by country.

Source: The State Statistical Committee of the Republic of Azerbaijan (Statistics of visitors to Pakistan, Tajikistan, Afghanistan and Mongolia are not available)

The majority of tourists visiting CAREC countries from Azerbaijan visited Georgia, increasing 1.3 times in 2023 compared to 2022. Based on these indicators, Kazakhstan ranked 2nd, and the number of visitors increased by 1.2 times. An increase of 1.9 times, 1.3 times, 1.5 times, and 0.9 times was recorded in the number of visitors from Azerbaijan to Uzbekistan, Kyrgyzstan, China, and Turkmenistan in 2023 compared to 2022, respectively. Finally, as can be seen from the statistical indicators, high growth indicators were recorded in the flow of tourists from Azerbaijan to CAREC countries and vice versa. Visa-free travel opportunities between many CAREC countries and Azerbaijan (Georgia, Kazakhstan, Kyrgyzstan, Uzbekistan, and Tajikistan), convenient visa opportunities, and a high level of cross-country cooperation create a fertile ground for further development of existing cooperation in the tourism sector. Despite the continued growth trends, the closure of land borders in Azerbaijan affects the mutual flow of tourists with the neighboring country Georgia, which generally affects tourism statistics in the CAREC countries. For comparison, we can note that the number of tourists visiting Azerbaijan from CAREC countries in 2023 (317,315 people) is three times less (603,479 people) than in 2019 (920,794). The number of visitors from Georgia to Azerbaijan in 2023 (104,450 people) was 6.9 times less (621,015 people) than in 2019 (725,465 people). In particular, the number of people visiting CAREC countries from Azerbaijan in 2023 (253,963 people) was 6.6 times less (1,426,611 people) than in 2019 (1,680,574 people). The number of visitors from Azerbaijan to Georgia in 2023 (168,399 people) was 9.5 times less (1,438,487 people) than in 2019 (1,606,886 people). As can be seen from these statistics, due to the negative impact of the closure of the land borders, a significant decrease was recorded in the flow of tourists from Azerbaijan to Georgia and vice versa, and as a result, the overall tourism statistics with the CAREC countries have seriously declined.

References and links

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