This is a best prospect industry sector for this country. Includes a market overview and trade data.

Overview

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, especially from the Middle East.  Azerbaijan and the U.S. signed an Open Skies Agreement in April 2016.

In order to attract more tourists to Azerbaijan, the government simplified its visa regime, creating the “ASAN” Visa System to process electronic visas within three days of application (three hours with payment of an expedite fee) for citizens of eligible countries, including the United States.  Additionally, in June 2016, single-entry tourist and transit visa fees were reduced to $20 from $50.  A February 2017 presidential decree created “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.  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 international conferences and sporting events.  The Central Bank of Azerbaijan estimates that 33.5% of all tourist services provided in the country were for business travelers.  By contrast, the market for mid-range, two-three star hotels, boutique and bed-and-breakfast-style accommodations, hostels, and entertainment centers is under-developed.

Since 2012, Azerbaijan has focused on event tourism to develop the industry.  That year, the country hosted the Eurovision Song Contest and FIFA’s U-17 Women’s World Cup.  In 2015, Azerbaijan hosted the first-ever European Games.  In 2016, Baku hosted the first of five Formula One Grand Prix events at the Baku City Circuit.  Baku hosted the Islamic Solidarity Games in May 2017.  Although new ski facilities have opened in the Gusar and Gabala regions in the last four years, with another under development in the Nakhchivan exclave, the development of hotels and tourist destinations in the regions lags behind the level of development in Baku.

According to the State Statistical Committee of the Republic of Azerbaijan, as of 2017 there are 563 hotel facilities in the country.  The number of tourists visiting Azerbaijan increased by 5.7% in 2018 compared to the year prior.  Approximately 31% of these were from Russia, 21% from Georgia, 10% from Turkey, 9% from Iran, 3% from the UAE, and 3% from Saudi Arabia, with the remainder coming from other countries.
 

Opportunities

There are opportunities for businesses that train hotel staff and provide logistical support.  Azerbaijan’s hospitality industry is largely oriented to business travelers and conference attendees.  There are opportunities to support the development of individual, family, and package tourism; entertainment venues; and two- and three-star hotels.

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