How is Azerbaijan reviving its tourism industry
Four countries - one choice

ANALYTICS  22 February 2023 - 15:31

According to statistics from the United Nations World Tourism Organisation (UNWTO), the global average recovery of the industry last year was 63 per cent. Azerbaijan's tourism sector has also achieved no less success: having almost completely overcome the problems associated with the COVID-2019 pandemic, last year it was possible to achieve an unprecedented high - twofold growth in terms of incoming tourism. Moreover, this positive remains in the new year: in January, the number of foreign citizens who visited our country increased 1.6 times compared to January 2023.

Despite the ongoing war in Ukraine, the sanctions standoff in the vast Eurasian space and despite the high volatility of prices on the fuel market (jet fuel), the ongoing outbreaks of coronavirus and quarantine restrictions, especially in China, the past year as a whole was marked by the revival of the global tourism sector. According to UNWTO statistics, more than 900 million international tourist arrivals were recorded worldwide last year, which is twice as much as a year earlier. At the same time, the UN profile structure notes that the recreational sphere is recovering at different rates in various regions of the world - the countries of the Middle East and the Persian Gulf are leading, where last year the growth rate of international tourism amounted to 83 per cent compared to the level of a prosperous 2019, which is, among other things, due to the holding of EXPO-2022 in Dubai and the World Cup Championship in Qatar. The dynamics of tourist traffic growth are comparable in Türkiye, which also set a new country record for industry revenues - over $46 billion, up 53.4 per cent from the previous year. In Europe, tourism industry recovery rates have reached nearly 80 per cent, and in the Old World, international arrivals amounted to 585 million, or 64 per cent of all trips last year. The industry recovered at about 65 per cent of its pre-pandemic level in Africa and North America, with the lowest figure - 23 per cent - recorded in Asia-Pacific countries where quarantine measures for inbound tourism are still in place.

It is noteworthy that in 2022, many countries recorded a noticeable increase in income from foreign tourists, and income from international tourism often grew faster than the number of arrivals. On the other hand, for tourists from the United States, the demand for trips to the EU region was supported by the weakening of the euro against the dollar. But in general, an increase in average travel expenses has been recorded in the world due to an increase in the duration of travel and the willingness of tourists to spend more at their places of stay. This was also affected by the factor of delayed demand due to two pandemic years, which sharply reduced foreign travel, and now citizens of many countries are catching up. In some areas, according to UNWTO, international tourism revenues exceeded the pre-pandemic level: in Türkiye - by 40 per cent, Romania - by 25 per cent, in Mexico and Portugal - by 15 and 13 per cent, respectively.



"In 2023, the situation for international tourism will improve even more: we expect the industry to grow even taking into account economic problems, ongoing geopolitical uncertainty and the possible introduction of new pandemic restrictions in a number of countries. The demand for trips within the framework of domestic tourism and trips abroad will be high and will allow some tourist destinations to fully recover to the pre-pandemic level," UNWTO Secretary-General Zurab Pololikashvili said recently.

What does the dynamics of our country's tourism sector recovery look like against a global backdrop? Over 1.6 million foreign citizens from 178 countries visited Azerbaijan last year, representing a twofold increase in incoming tourist flow. Outbound tourism indicators were slightly lower: nearly 1.5 million citizens of the republic rested abroad, and this segment increased by one and a half times.

Of course, judging by the statistics of the incoming sector, last year and at the beginning of this year, in absolute numbers, Azerbaijan still did not reach the record figures of 2019, when 3.2 million foreign tourists visited the country. Nevertheless, in terms of annual growth dynamics, our country has overtaken many countries of the post-Soviet region and has kept within the average global indicators, demonstrating an unprecedentedly high rate of recovery. It must be said, however, that this is largely due to the previous low base associated with a sharp drop in the tourist flow in 2020 and its slow revival in 2021. Well, last year, against the background of a full recovery of passenger air transportation, which provided a normal level of tourist traffic, it was possible to obtain fairly high percentages.

For comparison, in the first quarter of 2022, some 246,277 foreign citizens visited Azerbaijan, for the same three first months of 2021, the number of foreign travellers is more than two times less - 117,227 people. Well, in 2023, in January alone, the number of tourists entering the republic amounted to 119,110 people or about half of last year's quarterly traffic. Moreover, the figures for January this year exceeded the total volume of tourist arrivals for the first quarter of 2021.

However, the low base of the previous years is not the only factor that ensured the high dynamics of tourist growth at the beginning of this year. The role of the market driver was the removal of almost all sectoral quarantine restrictions in our country (with the exception of the opening of land borders), the resumption of work of metropolitan and regional recreational facilities and, of course, the liberalisation of international air traffic. The key principle of the strategy for expanding incoming tourism in the post-pandemic period was the restoration of cooperation with low-cost airlines, as well as the organisation of direct flights interrupted during the pandemic and the linking of Azerbaijani travel agencies with counterparts in Arab countries, Southeast Asian states and, of course, in the post–Soviet region - Russia and Central Asia (CA). In particular, the restoration of direct flights was most clearly reflected in the growth of tourists from the Central Asian region: in 2022, some 73,823 tourists arrived in Azerbaijan from all Central Asian countries, which was 4.75 times (!) higher than in 2021. Moreover, more than two–thirds of travellers - 56,600 people came from Kazakhstan (an increase of 4.3 times) and Uzbekistan (an increase of 6.2 times).

Such a high growth of the incoming segment could not but affect the occupancy rates of domestic hotels and hotel-type facilities, and by late 2022 they earned a total of 355.3 million manats [$208.9 million], which is 1.7 times more than the previous year.

Apparently, all of these positive factors turned out to be fairly stable trends, as evidenced by the data of the State Statistics Committee published on February 21: the number of foreign citizens from 131 countries of the world who visited Azerbaijan in January 2023 reached 119,100 people, which is 1.6 times higher than in January last year. Russia provided the largest part of the flow - it accounted for over a third of all tourists (33.8 per cent), and this is not surprising, given the noticeably narrowed geographical space for Russian tourists to travel, as well as the factor of resettlement of relocators. Türkiye comes next – it accounted for 21.1 per cent of all foreign guests, another 9.3 per cent were guests from Iran and 5.6 per cent from Georgia, and the rest of the increase was provided by travellers from India, Pakistan, Arab countries and neighbouring countries. Also in January, arrivals from EU member states increased 1.6 times.

Well, after the land borders are opened in the near future and the obstacles associated with this will be overcome, the dynamics of inbound tourism in Azerbaijan will increase even more. "Our goal is to increase the number of foreigners visiting Azerbaijan to 4 million in 2026, and to increase the indicators of domestic tourism to 6 million citizens," said Chairman of the State Agency for Tourism of Azerbaijan (GAT) Fuad Naghiyev. According to him, in about four years, the turnover of the domestic tourism sector will increase several times and reach 11.2 billion manats [$6.58 billion], of which about half will be formed at the expense of foreign tourists.

Caliber.Az