Main directions and prospects of tourism development in Azerbaijan

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Main directions and prospects of tourism development in Azerbaijan

A. Mirzoeva, dissertant¹, lecturer²

F. Mirzoeva, lecturer³

¹Institute of management systems

²Baku state university

³Azerbaijan state economic university



Abstract. Tourism is one of the best ways of having rest. Tourism is a travel branch that can have recreation, religion, health, business purposes.

It has become very popular since XIX and technological progress. Tourism starts to be a part of the people's life in global world. Tourism is considered as one of the most income based service sectors. Its development can bring many advances with itself to the economy. Today many countries earn most of their budget income from tourism sector. Tourism is not just only an income source but also a helper for strong international relations. Development of tourism strengthens the relations between nations, cultures and increases socio-economic business activities.

The era of education and technology makes life much easier and increases the need for travelling. Tourism is a luxury good, it means very costly to attain. But today it becomes easier to get with the help of low budget tourism (the offer of low service prices by companies).

Even, the countries that are poor for tourism sector, try to maintain artificial tourism in their territory. Developing tourism sector increases the number of travelers every year. The countries with rich nature, architecture, culture, history are more likely to attract many tourists. Azerbaijan is lucky among countries that it has many features for the development of tourism sector.

Tourism has a huge impact on the development of countries' economies as a complex. Increasing economic activities are supported by tourism service sector. Many such reasons make tourism sounds very attractive for the solutions of socio-economic problems. Increasing investments towards tourism sector benefits many countries' economies.

In Azerbaijan, tourism has also become one of the main service sectors. Generally tourism started to raise its importance in Azerbaijan after independency. This sector has been prioritized by the government and many programs have been made in order to develop tourism in Azerbaijan. As a result of all these things, the flow of both foreign and local investments has been put to Azerbaijan.

Tourism sector is very important for Azerbaijan, because it will bring many positive outcomes, if the sector is controlled by right regulations and decisions.

The advantages and disadvantages of tourism sector are criticized in the material. Tourism is considered one of the best ways of non oil sector and the development of service sector will benefit the economy of the country.

Keywords: tourism sector, multiculturalism, tolerancy, international tourism market, sustainable development, international community, integration.

Аннотация. Туризм является одним из лучших вариантов для отдыха. Туризм станет частью жизни людей в глобальном мире. Он рассматривается как один из самых доходов секторов услуг. Его развитие может принести много инвестиций в экономику страны. Сегодня многие страны получают большую часть своих бюджетных доходов от туристического сектора. Туризм является не только источником дохода, но и помогает развивать международных отношений. Развитие туризма способствует укреплению отношений между народами, культурами и повышение социально-экономической деятельности.

Эпоха просвещения и технологий значительно облегчает жизнь и увеличивает потребность в путешествиях. Туризм является роскошью и требует затрат значительных финансовых ресурсов. Но сегодня этот вид отдыха становится всё доступнее за счёт малобюджетного туризма (предложение низких цен на услуги компании).

Даже страны, с низким уровнем развития туризма, стараются поддерживать это направление на своих территориях. Рост туристической отрасли в мире наблюдается ежегодно. Страны с богатой природой, архитектурой, культурой, историей, привлекают много туристов. Азербайджану повезло, что он имеет множество направлений для развития туристического сектора.

Туризм оказывает огромное влияние на развитие экономик стран в комплексе. Повышение экономической деятельности поддерживаются в сфере услуг. Много таких причин делает туризм очень привлекательным для решения социально-экономических проблем. Увеличение инвестиций в экономику - одно из преимуществ, которое даёт туризм, во многих странах.

В Азербайджане, туризм стал одним из основных секторов услуг. Как правило, туризм начал повышать свою значимость в Азербайджане после получения независимости. Этот сектор имеет приоритет для правительства и многие программы были сделаны в целях развития туризма в Азербайджане. Это позволило привлечь значительный объём инвестиций, как со стороны иностранных инвесторов, так и на внутреннем рынке Азербайджана.

Туристический сектор очень важен для Азербайджана, так как его развитие принесет много положительных результатов, поэтому он находится под контролем правильных постановлений и решений.

Ключевые слова: сектор туризма, устойчивое развитие, международное сообщество, интеграция.

tourism infrastructure economic development



Despite wars, political turmoil, natural disasters, medical scares, terrorist attacks, and economic and energy crises in various parts of the world, international trade in tourism services has grown spectacularly since the 1970s. After 1970s, the number of international tourist arrivals worldwide increased speedily. Slightly over half of them were on leisure trips. By comparison, there were just 166 million international tourist arrivals worldwide in 1970.

For tourism-dependent countries and destinations, tourism's share of GDP can exceed twice the world average. Today, international tourism receipts exceed $1 billion per year in some 90 nations. Worldwide, domestic tourism is typically several times larger. Tourism truly has become a global economic and social force [1].

Travel is costly. Historically, only wealthy individuals could afford to travel abroad, and they tended to travel to affluent countries with quality tourism infrastructure and services. Not surprisingly, Europe and North America have been the largest sources and recipients of international tourists. But this, too, is changing. In recent decades, tourist arrivals in emerging countries have grown much faster than in developed ones. The Asia-Pacific region has seen and will continue to see the fastest growth. The United Nations World Tourism Organization (UNWTO) predicts that international tourism arrivals will grow by 3.3 percent per year between 2010 and 2030 and reach 1.8 billion total arrivals by 2030. Growth in emerging countries is expected to be twice as fast as in advanced ones. Tourism's market share in emerging countries is predicted to rise to 57 percent by 2030, compared to 47 percent in 2012. The challenge of how to direct the economic benefits of tourism to the world's poorest areas and populations, however, remains [2].

As a multinational and multi-confessional state, the Republic of Azerbaijan conducts a policy of full integration into the international community, attaches great importance to the development of mutual relations, the relations of bilateral and multilateral cooperation in the international arena. The religious policy of the government of Azerbaijan is based on building a democratic state, the principle of regulating relations between the state and religion in the national-religious and legal dimensions.

Azerbaijan, situated at the crossroad of East and West is a multicultural society. There are over 40 minorities and ethnic groups that live in Azerbaijan including the Tallishs, Avars, Sakhurs, Ukrainians and many more. For centuries, Azebaijanis have lived in peace and harmony with people from many different religious backgrounds and ethnic groups and Azerbaijan has been listed one of the top five most tolerant countries in the world. This fact has led many to believe that Azerbaijan can serve as good example of ethnic and religious tolerance for the world full of intolerance. Azerbaijan is a country where ethnic minorities can enjoy the same rights as the dominating ethnic Azerbaijanis, including being taught their education in their native language. Although the population of Azerbaijan is just nine million people, it has an inspiring diversity of religions that coexisting in peace with the Muslim Azerbaijani majority, awarding it praise by the European Parliament. Azerbaijan definitely sets a progressive and positive example of multi-culturalism to the world.

“Multiculturalism has no alternative. Of course, we all know that there are different ideas. Some say that multiculturalism failed or didn`t work. But there are positive examples. For us multiculturalism is a state policy and is our lifestyle.” Said Ilham Aliyev ,the President of the Republic of Azerbaijan. In such a period the President Ilham Aliyev's phrase of “In our country multiculturalism has become a lifestyle with no alternative” sheds a light on all matters in terms of understanding global importance of this notion and perceiving the multiculturalism conceptually as the only way of future development of mankind and Azerbaijan. Steps taken by President Ilham Aliyev towards development of multicultural relations in Azerbaijan are in sustainable character. Announcement of the year 2016 as “Year of multiculturalism” according to the Order signed by Mr. President once more proves that our state is ruled according to principle of tolerance.

It is an honor that in Azerbaijan national solidarity and friendship between nations exist whilst modern world faces religious and national clashes, sectarian conflicts and interstate distrust. Independent Azerbaijan being loyal to multicultural traditions always continues to support development of dialogue of cultures, protection of cultural diversity and regulation of reciprocal relations among civilizations. Cultural diversity is undoubtedly a factor which can considerably improve the tourist attractiveness of a given region and, at the same time, become the impulse of creating its tourist function and promoting the area for the widely understood cultural tourism. Multiculturalism, understood as a coexistence of many cultures,can considerably increase the tourist attractiveness of a given area, at the same time becoming an impulse of creating a tourist function and promoting the area for cultural tourism in a broader sense.

Over the last decade Azerbaijan has made considerable investments on infra and super structure. This also includes transport infrastructure such as improvement, modernization of airports and air terminals as well as construction of new ones. In addition to the international airports in the main cities and resort destinations, Azerbaijan has domestic flights to major cities and tourist centers. The highways crisscrossing the entire country; regular comfortable bus services and coach tours make travelling in Azerbaijan easy and enjoyable. The transport infrastructure and the efficiency of services as well as advanced communication network system meet all the requirements of contemporary tourism.

The accommodation industry at present, includes a range of facilities from the top quality, super modern category hotels and holiday complexes, boutique hotels to the affordable ones. Although city hotels, summer resort hotels and holiday complexes constitute the greater part of the accommodation industry, there are new ski, winter resort and spa hotels in north parts of the country. Most high standard hotels and holiday complexes have a variety of recreation, entertainment facilities. There are also some golf courses of international standard in various parts of the country.

Last years, Azerbaijan has been recognized as a country of international reputation for hosting the most important meetings and conventions of the world. In addition to the top quality convention centers of huge capacity, equipped with advanced technology; most high grade hotels also have facilities for events such as meetings and conventions.

Lures of the major cities and resort centers of the country are famous for Azerbaijan cuisine with national ones, restaurants, bars, entertainment life, cultural activities can appeal to tourists from all over the world.

To sum up, Azerbaijan at present with its enormous tourism potential and a great diversity of its natural resources, historical treasures, cultural values and activities, life style, attractions and with its efficient, tourist industry offers wide selection of products that can satisfy the demand of different market segments including the most sophisticated and demanding traveler.

However Azerbaijan's share in culture, nature based, special interest tourism, cruising, meetings and incentive tourism market segments do not match its enormous potential of great diversity and what it really offers. It falls well short of what it should have been. There is in fact a huge development potential for Azerbaijan to increase its share in various market segments, and to further diversify its tourism.

There is a consensus of opinion supported by research findings that the Azerbaijan tourism will continue to grow at a higher rate and the future prospects in the long term seem also to be very bright.

The Azerbaijani travel industry shows positive performance thanks to increasing marketing activities from the Ministry of Culture and Tourism. Successful promotions, such as early reservation campaigns, improved travel infrastructure such as new airports, new hotel openings and improvements to other travel services positively impacted the industry. Additionally, outbound and inbound tourism are positively affected by macroeconomic policy within the country and political strategies [3].

Rising demand for a personalized selection of services such as travel, accommodation and car rental led to increasing company investment in areas such as tourism packaging to target the younger population, which constitutes the majority of tourists. Tour operators also increasingly launched tourism packaging services which allow tourists to customize their holiday.

Thanks to increasing investment in marketing activities and infrastructure such as new airports, new roads and new hotels, the Azerbaijani travel industry is expected to register a good performance over the forecast period. Additionally, the increasing working population is also expected to have a positive impact on domestic and outbound tourism as increasing employment will positively impact business travel. The Ministry of Culture and Tourism's expected promotional activities in the areas of health and wellness, business and nature tourism will also bring further dynamism to the travel industry over the forecast period.

Tourism sector is supported by government programs and projects. One of Azerbaijan's future aims is to make the country as a tourism country because the country is full of tourism resources. That's why government creates programs to make it much easier for entrepreneurs to be a part of tourism industry. It is obvious that, proper attention and structure to the tourism sector can make a lot of profit flow to the country. But foreign tourist numbers are still not as expected.

The indicators of tourism potential in Azerbaijan can be defined with the numbers of local people, foundation of infrastructure level available for tourism and financial capital that can be spent for the development of the sector. Geographical climate is very good for the creation of many kinds of tourism service. Mountains, beaches, natural resources for health, forests, unique flora and fauna, natural reserves let Azerbaijan attract tourists in every season of the year.

Shix and Davachi in Absheron, Galaalti in Davachi, Turshsu mineral water in Culfa, Duzdag in Culfa, thermal springs in Talish and Greater Caucasus, mud volkanoes in Absheron, medical oil in Naftalan let Azerbaijan introduce its tourism as health tourism in the world. This health tourism centers are visited by many domestic tourists. Promotion of these health places to international tourism can increase the tourists who are travelers with health purposes [4].

In Azerbaijan, there are more than 6000 historical monuments. Among them, there are places that remain from old Islamic, Zoroastrian, Christian periods. But most of them need restoration for attracting history lovers. One of the best historical places to go is Gobustan with its pictures on rocks. It is one of the proofs for the historical past of Azerbaijan.

A big part of the great Silk Way had passed through the territory of Azerbaijan. On this old trade way, there are still remains of the history as karvansarays, hammams, fortresses, worship places, kasrs and so on. Their beauty of structures, connections with history let Azerbaijan be known as one of the old places of the world and history tourism center.

Most of the historical places are not in good conditions for tourism purposes. Unfortunately, many of them were destroyed. Long time of staying out of attention has made them lost their appearances. Also, some historical places have been destroyed by the time of reconstruction of Baku city. Restoration of all these old monuments will attract many tourists to the country. Azerbaijan's historic buildings such as Ichharishahar, Maiden Tower, Shaki Khan sarayi, Momune Xatun Magbarasi are protected by UNESCO. Recognition of their historical past by world organizations is very important for the development of history tourism in Azerbaijan [5].

Accepting the geographical importance of Azerbaijan, being on the Silk Way has a huge impact on east-west, north-south economic relations. This is also essential for tourism relations with other countries. Business relations from tourism sector are increasing day by day because all these advantages of Azerbaijan.

Problems of tourism in Azerbaijan can be solved with many ways as right governmental decisions. Regulations on these issues will solve all the problems quickly and will raise the speed of development in this sector.

One of the bad things of the sector in Azerbaijan comes from the seasonal character of tourism relations. Few days of tourism period make an impact on pricing too. Prices of touristic places are high because of the seasonal tourism in regions. Tourists always prefer to go to the cheap countries. That's why solutions on 4 season's tourism in Azerbaijan will help to suggest cheap prices for quality tourism. This will increase international tourism in Azerbaijan.

Analyses on tourism potential of Azerbaijan let to create below international tourism sectors:

- Winter tourism;

- Golf tourism;

- Health tourism;

- Education tourism;

- Cave tourism;

- Ethnographic tourism;

- Rafting tourism and others.

The best parts of Azerbaijan tourism that can be developed with investments:

- Mountain-sport tourism;

- Resorts, sanatoriums;

- Tourism complexes;

- Health tourism centers;

- Hotels in regions.

Some several precautions need to be done for the promotion of tourism service in Azerbaijan:

- Informing right customers with the potential of Azerbaijan tourism;

- Providing security and comfort for the tourists;

- Helping tourists while they are in the country ( tourism help centers).

Main ways of increasing the existed potential of country tourism in Azerbaijan are to pursue technological progresses, innovations, new trends in tourism, finding efficient ways of using resources and so on.

Tourism, travelling and investment are connected one another. Investment for tourism happens after business travelling. Business tourism activities include exhibitions, meetings and attending conferences. In business tourism, individuals from government and non- profit organizations engage in similar activities. Business tourism means travelling, spending money, staying abroad and being as a part of international trade. Average business tourist is much wealthy than an average leisure tourist and is expected to spend more money. Business tourism can involve individual and small group travel, and destinations can include small to larger meetings, including conventions and conferences, trade fairs, and exhibitions [6].

The main positive economic impacts of sustainable tourism relate to foreign exchange earnings, contributions to government revenues, generation of employment and business opportunities. Some of the most important economic benefits are that sustainable tourism brings along itself economic growth. Tourism expenditures, the export and import of related goods and services generate income to the host economy. Tourism is a main source of foreign exchange earnings for at least 38% of all countries. Government revenues from the tourism sector can be categorized as direct and indirect contributions. Direct contributions are generated by taxes on incomes from tourism employment, tourism businesses and by direct charges on tourists such as eco tax or departure taxes. Indirect contributions derive from taxes and duties on goods and services supplied to tourists as an example, the taxes on souvenirs, alcohol, and restaurants.

International relations play a huge role during attracting foreign investors and companies to the country. Azerbaijan's relations with other countries affects directly to the oil contracts, energy sector, telecommunication projects, service sector, transactions with foreign banks, infrastructure, international trade and so on.

Generally, for tourism sector, Azerbaijan gets help close friend country Turkey. Turkey is one of the well known tourism country that using his experiences Azerbaijan also, wants to widen tourism ability. Attracting foreign investments to the Azerbaijan's economy is one of the economic development strategies. A lot of work and events are done due to this direction. Generally, foreign investments are put on oil sector in Azerbaijan. For example, in 2013, 47% of foreign investments was used for oil sector, the rest 53% was divided among other non oil sectors. Today, government's main policy is to increase the investments on non oil sector of the economy. There are a lot of economic steps that Azerbaijan has taken during those last years for attracting investments to the country:

a) open door policy;

b) activation of electron services in many areas;

c) protecting investors rights with legal procedures.

Geographical location of Azerbaijan has a great impact on tourism service sector. Being on Trans-Caucasus transport center and also, locating in Caucasus as in the middle of Europe and Asia with strong air, see, railway and automobile lines increases the strategic matter of Azerbaijan. The advantages of Azerbaijan for foreign investors are so many such as:

- good conditions for foreign investment;

- open economy with speedily developed sectors;

- easy entry to the non oil sector market;

- plenty of national resources;

- favorable strategic location;

- competitive local workforce.

Business environment in Azerbaijan gets bigger day to day and one of the reasons for that is the globalization in tourism sector in Azerbaijan. Today, the importance tourism has a direct effect on country's economy. Azerbaijan as a developing country wants to make tourism develop for being known with service sector in international area. Tourism is very important to the economy of the country because it is labor oriented sector. Strong tourism can decrease unemployment in the regions of the country [7].

In Azerbaijan the main problem for tourism is the lack of capital and finance. There should be done some specific acts for the increase of financial capacity. Tourism capital can be obtained from below sources:

- Government's budget and budget fond;

- Savings of people;

- Retained earnings of a company;

- International organization's grants, technical help programs, capital of financial institutions.

The reasons that cause problems for businessmen not to invest to the country can be as:

- The potential of the country are not that recognized by foreign investors.

- Building process of tourism complexes take much money that only a few entrepreneurs tent to invest.

- Condition for tourism business sometimes do not satisfy the investors.

- Current infrastructure is not good enough for modern demand.

A lot of precautions for the solutions on these problems have been done, but still Azerbaijan faces with them in some situations.

In international tourism market, the investments are made by the huge transnational corporations. These transnational corporations are not only responsible for the investment and capital but also, for the diversification of goods, development of local service sector, the increase in the standards. Their work on all of these issues has a good impact on tourism. Investments of transnational corporations help to be known by international tourism market.

For the development of tourism sector in Azerbaijan being satisfied with only government policy and programs is not enough. There should be done other precautions too. For the attraction of investments can be done:

1. Attracting foreign investments with introducing regions' tourism potential.

2. Increasing institutional support.

3. Giving concessions to the investors of this sector.

4. Structural changes in the management of tourism capital.

5. Researching world practices in tourism investments and applying to Azerbaijan's tourism sector.

Generally, investments on tourism are put on small business sectors like hotels and restaurants. Examples can be shown as Hilton Baku, Kempinski Hotel Badamdar, JumeirahBilgah Beach, JW MarriottAbsheron, Hyatt Regency Baku, Holidays Inn Baku. These are the hotel chains' branches in Azerbaijan. These hotel chains have made a good impact on the tourism in the country because in those hotels many international events and exhibitions have been hosted Azerbaijan with high quality. This leads to increase business tourism too. Such hotels help to attract foreign tourists while choosing a place to stay in the country without hesitating. But besides hotels, the size of foreign investments is very small on transport infrastructure, tour organizations, tourism complexes. Organizing tours to regions is usually done by local tourist companies. This kind of tours claim huge amount of investments for making quality time, for that reason they are only done inside of the country. Tours for outside of the country are very expensive and mainly people do not prefer to use them. Pricing is very important while choosing tours for touristic purposes.

Policy of tourism in Azerbaijan supports entrepreneurship in tourism market. Government gives financial help as credits to investors to stimulate private tourism sector. Also, government's legislative mechanisms protect the business activities in tourism market. Giving licenses to the objects of infrastructures, stimulating foreign tourism, lightening visa and custom regimes, are parts of the policy of government.

Qualification in tourism means to be one of the best for a factor in this service sector. One of the aims of government policy is to provide the qualification in tourism service sector. Competition in the market enhances this process. Tourism in the regions of Azerbaijan can increase the development of their socio-economic conditions. Competition also helps to decrease the prices for the services and to increase the numbers of tourists. Decreasing prices will enhance the demand for tourism.

Complex programs of government will create sustainable development and integration with other countries. Tourism is a very effective tool in those programs to integrate to the other countries with economic and cultural relations.

In modern times, tourism plays an important role in the presentation of a country in economy and international relations. That's why, much attention should be paid on country's tourism for catching one of the best places in world's tourism sector.

Azerbaijan's future in tourism is so bright because it has enough potential for the development of the service sector and it is supported by governmental organizations. Some suggestions are given below for the development of the tourism in the country:

1. Investment is very essential in tourism service sector. Making the tourism potential of Azerbaijan to be known, listing investment needed tourism places, creating good conditions for tourism business activities are important issues for the development of this service sector.

2. Today, main income to the economy of the country comes directly from oil sector. The role of oil sector in the economy in Azerbaijan can be replaced easily with tourism. Increase in the investments for not oil but non oil sector will enhance the market share of tourism. Tourism service sector can bring additional income to the country with using investments and internal resources efficiently. But firstly, persuasion on future of the tourism must be created in both foreign and local investors.

3. For the development of tourism, it is inevitable to create modern tourism legal foundation system that is close to international standards. Increasing international cooperation, lightening visa, tax, custom regimes with tourism countries can help to make the tourism sector broader.

4. Maintaining international relations with the world organizations can help to solve sector's problems and increase partnerships in this business field. Today, being a part of those international organizations creates many business opportunities for the economic development of the country. Increasing cooperation activities with international organizations and using their experiences will enhance the effectiveness of tourism service.

5. Azerbaijan's regions have a great role in the development of the country. Properly using tourism potential and maintaining free economic zones in the regions will increase their share in the economic growth.

6. One of the problems of tourism service sector is the lack of qualified personnel. It affects negatively to the tourism in the regions of country as well. Trainings and courses by specialists of the service sector can solve these problems and increase the quality of the tourism sector.

Level of tourism differs from region to region. Most recently Europe is leading in the list. The main reason for that is the development of tourism industry and easiness of visa requirements among European countries. Recently, Asia more specifically southern-east Asia and Oceania started to rise very quickly in tourism sector. It is nature and potential of those countries that give them an opportunity to be as tourism centers in the world.

Azerbaijan is situated between Europe and Asia with its historical past and modern features. Location and nature make a huge sense for the development of tourism in Azerbaijan. The combination of both European and Asian spirits makes Azerbaijan much more attractive for tourists as a tourism destination. The development of qualified service sector will lead Azerbaijan to be one of world's best business and trade centers with good tourism atmosphere.



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