Major reset: Azerbaijan is redrawing its tourism map Overview by Khazar Akhundov

Over the past two decades, Azerbaijan has developed a well-established tourism industry. In terms of the number of five-star hotels operated by renowned international brands, high-end resorts, and mountain and spa destinations, the country is one of the leaders in the Caspian region. However, in light of the complex geopolitical and economic changes taking place around the world, as well as the growing adverse impact of climate change, the time has come to make adjustments to the country’s tourism and recreational sector and passenger transport infrastructure. Equally important are the development of new “green” and rural destinations and improvements in service quality to boost inbound tourism, particularly in the country’s regions. These are the objectives addressed by the State Programme for the Development of Tourism in Azerbaijan for 2026–2030, approved by President Ilham Aliyev on August 20.

As emphasized in the preamble, the document was developed with the aim of strengthening the role of tourism in the country’s socio-economic development, diversifying the non-oil economy, enhancing the competitiveness of the regions, and consolidating Azerbaijan’s position as an international tourism destination. In this regard, the government aims to achieve 40% real growth in value added across tourism-related sectors by 2030. According to the State Programme, the sector is expected to generate 8.5 billion manats ($5 billion) in value added next year, with the figure projected to reach 12.2 billion manats ($7.1 billion) by 2030.

To achieve this goal, Azerbaijan will need to address a range of issues, including streamlining tourism-related legislation and administrative mechanisms, creating a system of incentives to encourage market participants in the inbound tourism segment, incorporating international best practices into the development of new inclusive destinations, and overcoming the sector’s inertia.

The need for these reforms has been apparent for some time. Between 2022 and 2024, starting from a low base, Azerbaijan’s tourism sector recovered to more than 80% of its pre-pandemic levels. In particular, the State Programme cites data from the Travel & Tourism Development Index 2024, published by the World Economic Forum, according to which Azerbaijan ranked 56th out of 119 countries worldwide in terms of tourism development. Although Azerbaijan ranks ahead of Kyrgyzstan (102nd), Tajikistan (99th), Uzbekistan (78th), and Armenia (72nd) among countries in the South Caucasus and Central Asia, it still trails Georgia (45th) and Kazakhstan (52nd) by 11 and four places, respectively.

Reaching a leading position in the post-Soviet space is one of the long-term goals for the development of Azerbaijan’s tourism and recreation sector. However, this is far from an easy task, as the country has yet to surpass its pre-crisis 2019 figures, when Azerbaijan received 3.2 million foreign tourists. Moreover, the sector recorded a decline last year, which intensified in the first half of 2026, when around 1.092 million foreign tourists visited Azerbaijan, down 10.3% year-on-year. This was partly due to a decline in arrivals from several post-Soviet countries, as well as India and the Middle East. Another factor was the rise in aviation fuel prices amid the conflict in the Persian Gulf, which led to a sharp increase in airfares.

The sector’s weakening performance is also being driven by long-standing problems, including high airfares and the lack of a market alternative in the form of low-cost airlines; relatively high prices for accommodation and dining; inadequate standards of service and entertainment; and a shortage of modern recreational infrastructure, particularly in some regions of the country. To overcome these structural challenges and achieve its long-term goals, the State Programme envisages developing a strategic framework for the tourism sector, aligning the policies of other sectors with tourism policy, establishing a sustainable quality-assurance system, creating attractive incentive mechanisms, improving the regulatory and legal framework, strengthening branding, marketing and communications efforts, expanding opportunities for digitalisation, and more.

As a result of the implementation of the State Programme, Azerbaijan’s tourism sector is expected to strengthen its regional and global competitiveness and transform the country into a tourism destination where accommodation, transport, infrastructure, entertainment, and other services are integrated within a defined geographical area, providing a high-quality tourism experience across various segments while adhering to the principles of sustainable development.

Numerous provisions of the State Programme focus on the development of specific tourism segments and reforms to the regulatory and legal framework. In particular, amendments are planned to the Law on Tourism, adopted in 2021, alongside the introduction of new mechanisms to encourage investment and provide incentives to private-sector entities operating in the tourism and recreation industry. Other priorities include expanding the network of direct air links with foreign countries and increasing flight frequencies. The programme also envisages making airfares more affordable, making fuller use of the potential of regional airports, launching new international routes, and attracting budget airlines and low-cost carriers.

Partial reimbursement of expenses is also envisaged for organisers of events of tourist significance, including concerts and entertainment programmes. Subsidies may also be made available to investors financing accommodation infrastructure, as well as micro- and small businesses operating in the tourism sector. The programme provides for the establishment of three new tourism and recreation zones, the creation of at least three tourism centres within these zones, and the preparation of master development plans.

Particular attention is devoted to developing new tourism segments, including ecotourism, rural tourism, and other “green” destinations. This will involve creating a regulatory and legal framework for the “Tourist Village” concept and developing a mechanism for regulating sustainable tourism, including climate-related activities. One of the State Programme’s objectives is to promote sustainable tourism in state nature reserves, including national parks.

Another important pillar of the programme is the development of a strategy and action plan for promoting health and wellness tourism in the country, as well as improving the regulatory framework governing the accreditation of medical institutions involved in medical tourism and organising an annual Health and Wellness Tourism Conference. Gastronomic and wine tourism are also to be developed, with at least five culinary festivals to be held annually in the regions, alongside gastronomic championships and international events.

Overall, the State Programme places particular emphasis on unlocking the tourism potential of Azerbaijan’s regions. Considerable work lies ahead to improve destination management, enhance transport accessibility, and develop hotel infrastructure and tourism services outside the capital. Support will also be provided to regional businesses already operating in the relevant sectors, while initiatives aimed at developing the professional skills of tour guides and improving the qualifications of other tourism-industry professionals will receive funding.

Given the wide-ranging nature of these objectives, the State Programme is clearly set to give a major boost to Azerbaijan’s tourism sector and help propel the industry towards a leading position internationally, particularly as the country has enormous potential to achieve this.