The Impact of Tourism on the Intersectoral Development in Azerbaijan

NAILA AKHUNDOVA

Azerbaijan State University of Economics (UNEC)

AZERBAIJAN

Abstract: This article discusses the impact of tourism on intersectoral development in Azerbaijan. The study

collected and analyzed the data on tourist activities in the country with the purpose of developing strategies that

would further boost the tourism sector in the economy of Azerbaijan. Data was collected from the State

Received: June 21, 2021. Revised: April 27, 2022. Accepted: May 23, 2022. Published: June 14, 2022.

1 Introduction

Today tourism is considered one of the most

profitable service sectors. Its development brings

tangible benefits to the economy. Today many

countries successfully replenish their budgets

through tourism.

Tourism is not only a source of income, but also an

nature, architecture, culture, history have more

chances to attract many tourists, Azerbaijan has

such opportunities.

Tourism has a huge impact on the development of

the country's economy in different sectors Growing

economic activity is supported by the tourism

services sector. Many of these reasons make

tourism very attractive to solve socio-economic

problems. Increased investment in tourism benefits

the economy of the country. In Azerbaijan, tourism

local investments rushed into Azerbaijan. Tourism

sector is very important for Azerbaijan because it

will bring a lot of positive results if this sector is

controlled by the right rules and decisions.

Baku is the main tourist center of Azerbaijan. The

climate, rich nature, monuments of material culture

of Azerbaijan contribute to the development of new

types of tourism. Tourist resources from the point

of view of the development of historical,

1908, one branch of the Crimean-Caucasian

Mountain Club began to function in Baku. The

main task of this department was to organize

excursions and conduct research related to tourism

in the Caucasus.

Tourism in Azerbaijan is developing as an

important attribute of the modern way of life and

culture, a form of international relations. On June

4, 1999, the Law "On Tourism" was adopted. In

2001, the Ministry of Youth, Sports and Tourism

function in the republic. The Republic of

Azerbaijan has signed with 16 states (Turkey,

China, Poland, Italy, Bulgaria, Greece, etc.)

intergovernmental agreements on cooperation in

the field of tourism.

Since 2002, the Azerbaijan International Tourism

Exhibition "AITF" has been held in Baku every

year, the tourism opportunities of the republic are

2006, the 5th conference of tourism ministers of the

Organization of Islamic Conference member

countries was held in Azerbaijan and the "Baku

Declaration" was adopted.

After the approval of the State Program for the

Development of Tourism in the Republic of

Azerbaijan in 2002-2005, tourism resources are

effectively used in the country. In order to ensure

the development of tourism on the territory of the

republic in 2002, 7 main tourist routes were

of the tourism sector and the formation of the

tourism industry. Currently, there are more than 50

tourist organizations operating in Baku. Khazar

Tour Travel, İmprotex Travel, Azal, SİLTD, BTİ

Azerbaijan, Caspian Travel, PASHA Travel are

major travel companies in the country. The five-

2 Methodology

As a methodology, Scientific approach were used

in the process of conducting the study on the

impact of tourism on the intersectoral development

of Azerbaijan. Using scientific approach, the

researcher was able to highlight the dynamics and

structure of tourism in the country, predict the

development of types and forms of tourism. This

method was adopted because it was more accurate

in modeling the characteristics of intersectoral

scientific methods.

The main goal of this research paper is to study the

tourism activities and the volume of the tourist

flow, both inbound and outbound in Azerbaijan.

The data for this research was gathered from the

State Statistics Committee of Azerbaijan, the

3 Literature Review

In a recent paper presented at the 55th International

important task of developing a post oil economy is

one of the challenges that faces most oil producing

countries across the globe including Azerbaijan.

In prospect, numerous studies show that tourism is

one of the leading sectors of the non-oil sector in

terms of its prospects. Alieva [3] assesses a number

of factors and conditions that ensure the sustainable

development of the tourism industry, creating

conditions for the country's progress and its

competitiveness in the international rating of

products and services that have great potential for

generating high income always require attention

and adaptation to the wishes of consumers in world

practice. Supporting private initiatives for the

development of tourism products in the Republic of

Azerbaijan, Fostering favorable coordination at the

local and regional levels, targeting consumer

demand, strengthening regional and thematic

product development goals, and aligning interesting

and attractive products with each other are

a single dynamically functioning system of

services, which includes various economic entities.

According to available data from the directory of

the International Trade Organization the strategy of

the tourism sector of Azerbaijan today focuses on

event tourism, such as holding business

conferences and international sports events. At the

same time, the offers of airlines have been

significantly expanded and visa procedures have

been simplified, and Azerbaijan will be opened for

electronic visas within three days of application

(three hours with expedited fee) for citizens of the

countries concerned, including the United States. In

addition, in June 2016, the cost of a single entry

tourist and transit visa was reduced from $ 50 to $

20. A presidential decree of February 2017 created

hotel facilities in the country. In 2019, the number

of tourists visiting Azerbaijan increased by 11.3%

compared to the previous year. Approximately 29%

of them were from Russia, 22% from Georgia, 10%

from Turkey, 8% from Iran, 2% from UAE, 2%

from Saudi Arabia and 2% from India, and the rest

came from other countries.

In an article on "The tourism sector of Azerbaijan -

opportunities and obstacles", Hashimli [7] noted

that Azerbaijan, with its huge tourism potential and

travelers.

However, the share of Azerbaijan in cultural,

natural, special tourism, cruise tourism, business

meeting and intensive tourism market segments

does not correspond to its huge potential, huge

diversity and what it really offers [8].

In some areas, significant lags are felt. In fact, there

is a huge development potential for Azerbaijan, in

some areas. There is a general consensus,

supported by research findings, that Azerbaijan.

Akbulaev and Mirzayeva [9] emphasized that the

role of the tourism sector is extremely important in

the macroeconomic development and development

of the country. In his research, Gandilova [10]

examined the links between the country's economy

and the tourism industry, as well as the extent to

which positive and negative factors affect

economic indicators. In this study, it is mentioned

Ahmadov at al. [12] in their study, they emphasized

that it is to activate local potentials in the non-oil

sectors of Azerbaijan, and that it is important to

implement regional development policies in the

tourism sector in the country.

However, the costs of tourism development are

manifested in the fact that it:

Currently, in accordance with the WTO

classification, domestic and international tourism

terms of financial results in many countries, it

significantly exceeds foreign.

Azerbaijan has great potential both for the

development of domestic tourism and for the

reception of foreign travelers. The country has a

rich historical and cultural heritage and untouched

wilderness.

Inbound and domestic tourism in Azerbaijan is

represented by a wide variety of types. The most

actively developing ecological, sports, educational,

leaving for rest increased from 10 thousand 859

people to 68 thousand 557 people. The dynamics of

changes in inbound and outbound tourism is

presented in Table 1.

Azerbaijan shows that in recent years this area has

developed dynamically and steadily in general;

there is an annual increase in the domestic tourist

flow.

The rapidly growing demand for tourism services

within the country has caused a boom in the

construction of small hotels, mainly in resort

regions, as well as an increase in the number of

international hotel chains in Baku. In addition,

domestic hotel brands are being created.

of the country, as well as to really become a

priority, it must meet three main criteria.

1. Orientation of tourists to the consumption of

environmental resources.

2. Preservation of the natural environment.

3. Maintaining the traditional way of life of the

population of peripheral regions.

5 Intersectoral Model of Tourism

Development in Azerbaijani

and Tourism Council counted Azerbaijan among

the top ten countries with the greatest increase in

visitor exports between 2010 to 2016. According to

Hope [16], the country recorded the world's fastest-

developing travel and tourism economy (a 46.1%

increase) in 2017. To promote tourism, Azerbaijan

has invested in espeically sprting activities

including sponsoring the Atletico Madrid jerseys

reading "Azerbaijan – Land of Fire". In 2018, the

country also launched a new tourism brand and a

of the sectors of the Azerbaijani economy that has

been developing rapidly in recent years. The

location of the "land of fires" at the junction of

Europe and Asia makes it very attractive for the

development of the tourism business. Of the 11

existing climatic zones of our planet, 9 are

represented on the territory of Azerbaijan, ranging

from subtropics to high-mountain alpine meadows.

The Ministry of Culture and Tourism of the

Republic of Azerbaijan also conducts consistent

participate in all the activities of this organization

and, adopting the experience of advanced countries

in the field of tourism, to integrate into the world

family of the tourism community.

Along with membership in the WTO, multilateral

relations in the field of tourism are established and

developed with such organizations as the

Black Sea Countries, GUUAM, the Organization

for Economic Cooperation, ESKAP, OECD, the

Tourism Council of the CIS countries and in within

other regional and global organizations.

Thus, representatives of the Ministry of Culture and

Tourism of the Republic of Azerbaijan took part in

the XV Beijing session of the WTO General

Assembly, at the conference of the ministers of

tourism of the OIC member countries, which took

place in Saudi Arabia and Malaysia, at the

member countries also took part in the work of this

conference at the level of deputy ministers.

The Ministry of Culture and Tourism of the

Republic of Azerbaijan has established close ties

and established regular meetings with the tourism

departments of countries such as Turkey, Austria,

6 Inter-sectoral Relationship of

Tourism

6.1 The Link between Tourism and Industry

tourism sector in Azerbaijan is under active

development under the supervision and support of

the state.

However, the role and place of the Republic of

Azerbaijan in the world market of services is

insignificant in conditions of tough competition

from the leading countries and in the conditions of

transformation of the economic model.

But the Republic of Azerbaijan has a certain

growth potential due to the active development of

sector. If we go into a little more detail, let's

imagine such a picture. Today, the vast majority of

people in the world who have the opportunity to

travel live in cities. In cities, people work more in

the office (banking, education, health, etc.), so it is

more interesting and attractive for them to be in the

bosom of nature, with hardworking people in rural

areas. However, the difference of agritourism is

that this type of tourism allows tourists to be closer

to the agrarian sector, to work with local farmers,

Azerbaijan, together with an American

organization, a guide on agritourism has been

prepared [19].

This became possible as a result of cooperation

between the State Agency, the Azerbaijan Tourism

Bureau and the United States Agency for

International Development (USAID), as a result of

a webinar held on June 11 on the potential of agro-

agriculture in the country.

The development of rural tourism is one of the

priorities of the strategic roadmap of the republic in

the field of tourism.

In addition, it should be noted that the expected

growth of interest in agritourism in the post-

pandemic period and the presence in the country of

ample opportunities to work in this direction.

Under the Ministry of Agriculture, Agrarian Supply

and Procurement OJSC operates, which supports

modern global trends and have preserved unique

traditions and lifestyle, can become the main

centers for the development of rural tourism.

New tourist entertainment facilities will soon

appear in the Bashbarmak Mountain reserve.

Region itself and around it. After that, Baku faced

the question of restoring infrastructure and

developing these territories.

6.3 Relationships between Tourism and the

Service Sector

is necessary to completely revise existing methods

of work, and not just solve problems and

implement in stages, taking into account the

demand for certain services.

Providing travel industry discounts or rewards can

act as a motivating force. A customer recognition

application based on facial recognition technology

can be used to help customers and reduce the cost

of establishing relationships with modern

customers [20].

service and transaction support - which, in turn,

have significant indirect effects on the operations,

talent patterns and business strategies of market

participants.

The introduction of innovative technologies,

especially cognitive technology automation

technologies, in customer service departments can

help improve efficiency and create new sources of

growth. Operating units will be able to expand

sources of income and increase their stability by

connecting Azerbaijan with Russia, which is also

considered one of the main branches of the North-

South railway corridor of the CAREC corridors.

[21]

To the category “Highways; railways ”refers to

projects that include both rail and road components,

and“ multimodal transport ”refers primarily to

logistics centers. Source: OECD study based on

databases as of June 2019.

through retail outlets, terminals, payment terminals

for various tourist services.

As a result of these changes, banks and fintech

companies are rethinking their approaches to the

use of data and introduce new models of interaction

with customers in the new digital reality. The

fintech companies is making it possible for tourists

to handle transaction through apps instead of

visiting banks and other financial institutions to

complete a transaction. The outbreak of the

services and tourism industries to make key choices

revert to the use of technology in their service

delivery. This is because successful digital

transformation usually depends on a sequence of

administrative practices, innovation choices, and

governance adjustments.

obsolete, new technologies come and go,

heightened competition and competition between

customers, and customer demands and

expectations.

restrictions on the use of certain payment services

(for example, PayPal and other overseas transaction

services are prohibited), and most companies have

done their online sales using the “cash on delivery”

option. Nowadays, due to restrictions, the need to

be physically present to close a deal is becoming

more and more problematic.

For example, if an SME ships a product or provides

a service and receives money in its bank account

from abroad, it must provide the bank with the

entertainment centers are introducing intelligent

automation solutions to improve the efficiency of

client offices and new products.

In 2008, the World Bank launched a railway trade

Particular attention was paid to increasing the

capacity of railway transport between Georgia and

Azerbaijan. Azerbaijan Railways is in favor of

continuing cooperation with both international aid

agencies and individual national aid agencies.

To improve the situation in the rail sector,

preparations are under way for the following

projects, with a $ 450 million financing agreement

signed with the International Bank for

Reconstruction and Development (IBRD).