Role of tourism in economic development of Azerbaijan

Analysis Materials 1 July 2010 12:07 (UTC +04:00)

Transition to market economy in Azerbaijan was accompanied by a range of new economic processes and appearance of a new economy category both in theory and practice theory. Tourism market was regarded as an economic category, representing combined social and economic development and relations in marketing researches, production, exchange and distribution of tourism services between producers and consumers. This necessitated analysis of modern tendencies of development of both international and neighboring countries' tourism markets and revealing problems of their functioning.

Increase in volume of production in tourism industry is seen on other fields of economy, where investment activities are set up, new jobs are created, goods turnover is expanded, and respectively, profit increases. Part of income is transferred to state as tax. These funds can be directed at further financing infrastructure of tourism industry, financial assistance to low-income people, and developing a system of training personnel for tourism services.

Tourism industry should be considered as an economic category, representing a combination of interrelated fields and industries of national economy, whose functional task is the activity directed at meeting different and permanently growing needs of people in different types of rest and travel by rational use of all existing tourism resources.

Since 2001-2002, Azerbaijan has seen a serious interest in tourism development. If there were 32 travel agencies before, today their number has risen to 123.

Ministry of Culture and Tourism of Azerbaijan plans for 2-4 years to bring the level of tourism services in the country to world standards. According to the head of tourism department of the Ministry of Culture and Tourism Aydın Ismiyev over the last several years there have seen a big increase of tourists visiting Azerbaijan.

Now the number of hotels has reached 452 - nearly a three-fold increase. Still, the quality of services should be improved. "We will improve the quality to a necessary level in 2 to 4 years." Ismiyev said.

It is planned to conduct considerable work, given the large potential for improving the tourism industry in the country within the state program of tourism development in Azerbaijan for 2010-2014. Tourism market is Azerbaijan is opened and free from obstacles.

About 25-50 hotels and inns are built in the country each year. Today, 50 hotels are being built. The number of tourist facilities in Azerbaijan has tripled.

In country totally of 452 tourist facilities, 55 have gained "stars". But it is not necessary to consider this as an indicator of the level of service, since receiving "stars" is a voluntary process. On the other hand, today the market requires it to increase foreign tourists.

"Stars" are assigned by a special commission for 3 years. Then the commission members repeat monitoring of facilities.

Quantity and quality

The Azerbaijani Ministry of Culture and Tourism urges there is no hotel functioning without license in Azerbaijan. The ministry closed 40 hotels in 2009 because the rendered services did not correspond to requirements, Azerbaijani Minister of Culture and Tourism Abulfaz Garayev.

On the backdrop of the increasing number of hotels, the Ministry considers it appropriate to conduct monitoring on the services quality. The Minister assesses today the development of domestic tourism in Azerbaijan at a normal level.

The tendency of decreasing prices is also observed in Azerbaijan. There is their decline in prices compared with the last year. As the number of tourist facilities increases and competition in the market strengthens, the price will decline, the minister said. And when finding the fact of artificially rising prices, this issue will be raised in the appropriate department.

Prices for holidays in Azerbaijan range from 8-10 to 130 manat per day, that is, every Azerbaijani has the opportunity to rest at the expense of their pocket.

Meanwhile, deputy chairman of the Centre for Socio-Economic Research public union Natig Huseynov considers that the level of service in the regions of the country is at a very low level, and absolutely not meet offered prices.

The center came to this conclusion on the basis of monitoring conducted in 5 regions of the country. In most hotels, where monitoring was conducted, there are no basic services of distribution of baggage, no Internet and car rental. The conclusion of the center is that: the money that is spent on resting 5-6 days in Azerbaijan is enough to rest 11-12 days in Turkey at a hotel with excellent service.

However, the Azerbaijani Ministry of Culture and Tourism thinks it is irrelevant to compare prices of tourism services in Azerbaijan and Tourism, because these are two different markets.

"Turkey is in condition to receive millions of tourists, whilst the current restriction in accommodation of tourists hinders Azerbaijan to render services on the level of Turkey. Tourism is developing in high pace, and Azerbaijan needs 15-20 year achieve this pace," the minister said.

The ministry calls on the tourists to demand from tourism facilities necessary quality of services. According to Mahir Gahramanov, head of the Ministry's domestic tourism sector, almost 80-90 percent of price case is relevant to the level of tourism services.

"Major reason for high price of tourism services is deficit of tourism facilities. The Ministry's efforts are directed at increasing places for accommodating tourist in an effort to create rivalry," Gahramanov underscored.

Tourists themselves should demonstrate activity to receive services of relevant quality and demand it from tourism facilities.


To develop tourism it is necessary to create special tourism areas, and it can make Azerbaijan a competitive participant of the international tourism market. Creation of tourism areas is part of the state program on development of tourism, adopted in April.

The Ministry of Culture and Tourism states about its intention to develop tourism intensively in regions.

Mostly spread types of tourism in the country are culture tourism, entertainment, and business-tourism. "Culture tourism in Azerbaijan began in 2001. Permanent work is done both in Baku and in regions in this direction. We simply prefer regions, because business is well developed in the capital city and tourists are mainly concentrated in Baku," said Gahramanov.

At the same time, there are definite problems in infrastructure of beach tourism. "Real estate market on the seashore is rather expensive, and the investors have less interest. Nevertheless, projects to develop recreation areas will be implemented in the northern area," Gahramanov added.

Nabran is the most popular recreation area among northern regions. Implementation of infrastructure projects such as the Baku-Shemakha and Baku-Khachmaz automobile routes had positive impact on flow of tourists.

Ecotourism is one of active types of tourism and Azerbaijan has all prerequisites and prospects for the development of ecotourism. Ecotourism does not require major investments, as the basic principle of this type of leisure travel is the use of natural resources without polluting the nature and construction of any tourist facilities and other similar buildings. Rural "green" tourism (both local and foreign tourists rent a chalet from the local population and live there) began to actively develop recently in Azerbaijan, as in many European countries.

State assistance is needed to develop this direction of ecotourism as rural (green) tourism. Azerbaijan has great potential to develop ecotourism. Our tour operators are passive in this direction.

To boost interests it is particularly expedient to release rural tourism from taxes based the model of European countries. Lax loan could also render significant support to developing similar tourism. Rural tourism opens new opportunities for rural residents. Firstly, this is involving women in this process. Furthermore, it contributes to culture in these areas, even if not to mention about their financial status.

It is also necessary to take every effort to develop National Parks as tourism in the international tourism market. One of problems of National parks is Azerbaijan is absence of relevant specialists.

The Azerbaijani Tourism Institute will graduate its first student, but they are unwilling tow work at National Parks, more probably, de to salaries.