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 have also increased tourism in Azerbaijan.  In April 2016, Azerbaijan and the United States signed an Open Skies Agreement.

To attract more tourists to Azerbaijan, the government simplified the 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.  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, the Ministry of Culture created an independent State Tourism Agency to improve state governance in tourism and culture.

As with other sectors, the hospitality industry in Azerbaijan is dominated by a small number of large holding companies.  Several well-known western chains operate in Baku, focusing on affluent tourists, business travelers, and large-scale conferences and sporting events.  The Central Bank of Azerbaijan estimates that 33.5 percent of all tourist services provided in the country were for business travelers.  By contrast, the market for two- or three-star hotels, boutique and bed and breakfast style accommodations, hostels, and entertainment centers is underdeveloped.

Since 2012, Azerbaijan has focused on development of the event tourism 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 and hosted the Islamic Solidarity Games in May 2017.  In 2021, Baku hosted multiple matches for the UEFA soccer championship.  Baku continues to host the Formula One Grand Prix, and the contract will be up for renewal in 2023.  In 2024, Azerbaijan will host the international Nomad Games.  Although new ski facilities have opened in the Gusar and Gabala regions in the last four years, the development of hotels and tourist destinations in these regions lags behind Baku’s level of development.

According to the State Statistical Committee of the Republic of Azerbaijan, there were 642 hotel facilities in the country as of 2020.  In 2020, the number of tourists visiting Azerbaijan decreased by four times compared to the year prior.  Approximately 28% of these tourists were from Russia, 23% from Georgia, 20% from Turkey, 9% from Iran, 2% from Ukraine, 1.6% from India, and the remainder coming from other countries.  Azerbaijan has gradually lifted covid-related restrictions and tourists no longer need a covid test to enter the country, although proof of vaccination is still required at passport control.

Opportunities

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