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Introduction
The main goal of the socioeconomic policy implemented in the country is to achieve a breakthrough in the economic activities and the living standards in order to prevent the migration of the population in some regions and use available potential opportunities effectively. However, the concentration of most of the industries and related infrastructure facilities in Baku city has hindered manufacturing and affected the service sector of the country’s other regions, leading to big disproportions in territorial organization of the economy in Azerbaijan. Considering the country’s current economic situation, there is a vast number of opportunities to be exploited in the tourism industry as a new and promising enterprise.
In order to take advantage of these opportunities, it is necessary to identify the main regions favorable for the development of tourism, as well as evaluate their potential in terms of availability of diversity of landscapes, historical traditions and samples of historical architecture.
Also, the development of tourism is not limited to its high economic profitability. This branch plays an important role in the solution of social problems and elimination of unemployment, as well as in the regional economic development and the increase of living standards. In the meantime, tourism stands as a strong factor for migration flow prevention from some regions, especially remote villages in mountain areas.
Compared to other sectors of the global economy, the tourism industry is one of the fastest growing, accounting for more than one third of the total global services trade (Bethapudi, 2013). As world experience shows, the existence of plenty of tourism resources allows even developing countries to occupy a prominent place in the international tourism market. However, this is reachable only if the development of this sector is a state priority policy. The main directions of this policy are connected with support of rights of visitors and also local tourism products, as well as comprehensive contribution to domestic and inbound tourism activities. The support of tourism leads to the growth and creation of new jobs in this industry. The measures conducted in tourism must include direct investments, training of qualified personnel, related scientific approach and provision of recreational information, commercialization of national tourist products in the world market, promotion of tourist activities through application of concessional taxes and fees.
Since the tourism industry may turn to be one of key areas of economic development in Azerbaijan (Bayramli, 2019), it is necessary to conduct scientific assessment of the country’s recreational and tourist resources and improve the living standards of the population, and also create a highly-developed tourism industry in its regions that meet modern economic, social and environmental requirements.
The following tasks must be implemented in achieving this goal:
the study of recreation and tourism resources that impact the development of regions;
the assessment of cultural and historical monuments in terms of tourism;
the compliance of tourism services quality in accordance with international standards; and
the study of inconsistencies of the use of recreational and tourist resources in regards to the relevant substantiated recommendations offered.
This research aims to analyze the economic and geographical problems of the tourism industry in Azerbaijan Republic, addressing the peculiarities of natural conditions and economic development. This paper analyzes the issues of improving living standards in some of the country’s regions, as well as the creation of new tourist facilities and economic assets within the framework of state programs.
Body
Being one of the most dynamically developing and highly profitable sectors of the economy, tourism has stepped into the 21st century as the most stable developing sector of international trade in services. In terms of income, tourism has been a leader in the top five most highly productive sectors for more than a decade (Akhundova, 2020). However, in order to carry out an effective sustainable tourism the characteristics of the regions have to be considered (Bac & Aksoz, 2017).
Tourism represents the enjoyment and rest activities of the people during their leisure, as well as the temporary movement of people from their permanent residence to another place, or the travel of people within their own country or to another country with the purpose of medical treatment, visiting relatives, business, religious and other purposes (Yeganli & Hajiyev, 2006). The tourism industry is a combination of facilities of accommodation, transport, catering, entertainment, business, health, sport and other areas and activities, including tour operators, travel agencies, organizations, specialized on excursions and guide services (Mammadov, et al., 2002).
In a broader definition, tourism is a means that influences the formation of state budget, the infrastructure of villages and cities, the preservation of historical and architectural monuments, and the development of small and medium entrepreneurship. In general, covering all areas of life, tourism makes it necessary to thoroughly study natural, cultural and historical values, as well as requires the analysis of this activity from economic, social and environmental points of view.
In accordance with the Recommendations of UNESCO and the 1976 Charter of World Tourism Organization (WTO) on scientific and cultural tourism and also World Tourist Conference (1980) of WTO, tourism is a mechanism allowing stability, ensuring peace, promoting economic growth, as well as fostering development and extension of international partnership. WTO emphasizes the contribution of tourism to moral and educational values rather than the related economic benefits. In order to increase the importance of tourism from the point of view of preservation of scientific and cultural heritages, UNESCO supports the leitmotif of ‘Science-Culture-Recreation-Travel-Training’ as a scientific strategy. Researches and seminars like ‘Cultural or perceived tourism’, ‘Role of the elements of culture in the formation of tourist interest’, ‘Protection and use of cultural, historical and natural heritage in tourism’ conducted by this organization serve as the factors of relevant motivation in tourism. In 1996, the UN General Assembly declared tourism as a contributor to economic, cultural and social development as well as peace between world countries.
Although people had always travelled not only for leisure purposes or for relaxation, there had also been those who had travelled for entertainment and business purposes, either to a meeting, conference, workshop, event etc., and these people or tourists had contributed to the growth of the destinations they had visited directly or indirectly, and ultimately developed the tourism industry as a whole (Zaei & Zaei, 2013). According to Akhundova (2020) there are great opportunities for promoting this type of tourism industry in Azerbaijan.
Generally speaking, tourism industry is developed chiefly in lowlands and foothill areas in the country. The creation of rest homes and treatment centers in mountain and foothill areas can play an important role in the sustainable development of the regions. In Azerbaijan, the network of health resorts for the first time was created following the decision of the Council of Ministers of USSR on ‘the transformation of Naftalan, Istisu and the west coasts of the Caspian Sea resorts area on the 27th of August, 1970. In April of 1983, another decision on the establishment of the resort zone of the Union in Azerbaijani coasts of the Caspian Sea was adopted. In recent years, the infrastructure base of tourist businesses was improved, while tourism became one of the most important branches of the non-oil sector in the country. In this regard, such state documents as ‘Law on Tourism’ (1999), ‘State Program on development of tourism in Azerbaijan Republic’ (2004-2008, 2009-2013 and 2014-2018) and State Program on development of resorts in Azerbaijan Republic (2009-2018) gained relevance. The year 2011 was announced as ‘the Year of tourism’. These and other documents and measures played a significant role in the development of tourism and the partial solution of relevant problems.
Since then, different directions and certain activities of tourism were improved. Thus, the quality of tourism services and also the training of qualified personnel was improved, while on the other hand, the solution of visa issues was simplified. Also noticeable is the establishment of new tourist routes in the regions and within the capital city in order to take tourists to historical buildings, as well as the right of active participation of tourism companies and hotels in various exhibitions.
The widespread of urban lifestyle and environmental challenges in large cities increase the demand for rest and medical treatment and relaxation. Recreation and treatment tourism as the most promising area of tourism necessitates the availability of ecologically clean air as well as providing safe foods and spring and thermal waters (İmrani & Zeynalova, 2014). Previous studies have found some barriers in the regions (Momeni, et al., 2018) although if these were overcome there would be a great potential.
In general, the development program of tourism in all countries is usually prepared on the basis of principles of a complex approach. Such preparation of program makes it possible to take advantage of both domestic and international conditions and factors. On the other hand, the activity of international tourist companies is typically aimed at the improvement of living standards of the indigenous population. People enjoy the creation of new jobs as well. They gain also an opportunity of selling handcraft in a new market. Thus, most tourists typically show great interest in buying articles that depict indigenous traditions and folk customs. Furthermore, international tourism positively affects not only cultural, political and economic relations between humans, but also friendly and fraternal relations. This economic field is characterized by the enrichment of international features with natural elements. This enrichment may result in international environment to be more stabilized, and prevents regional factors that hinder the development of tourism (Huseynov & Afandiyeva, 2007).
Simultaneous with the earnings, tourism activities involve economic costs, including the direct and indirect costs of tourism businesses, government costs for infrastructure, as well as costs incurred by the support services providers (Chowdhury & Shahriar, 2012). The rapid development of the national economy has been positively impacting the development of tourism industry in Azerbaijan. It should be noted that the share of Azerbaijani tourism in world tourism is less than 1% (Mammadov & Bilalov, 2004). However, the state has taken measures with the purpose to develop tourism in the country for the past 10 years. Meanwhile, the financing of tourism industry is being increased in order to develop the material and technical base of tourism industry and the related system of social infrastructure in accordance with international standards.
One of the key factors affecting tourism is the effective use of financial resources. Effective management of financial resources in a market economy is considered to be one of priority issue in all the departments of this business. Financing is considered to be the only resource, directly transformable within a shorter time. Since financial resources play a key role in a market economy, the establishment of an independent management system is required (Sheremet & Ivanova, 2008).
Subjects of businesses of Azerbaijan should have a broad opportunity of getting loans and then use them efficiently in order to expand their activity, increase the level of technical equipment, produce competitive products and make great profits. The use of borrowed funds allows to extend the manufacturing activity of business entities and provides effective use of private investments.
Figure 1 shows the entities by the accommodation of tourists in Azerbaijan. According to collected data, (Figure 2) in 2014 there were 535 hotels and 218 tourism entities in Azerbaijan where 10 576 persons were employed. Compared to 2010, the number of hotels was increased by 6,7%, whereas tourist entities showed a 57,8% growth. The number of workers engaged in these facilities rose by 72,9%. As the data indicate, 94,9% of hotels belonged to the private sector, while 5,1% were state-owned. 99,9% of tourism entities were private ones, whereas the rest 0,1% belonged to the public sector.
(Figure 1) Share of tourists of accommodation entities in Azerbaijan (percentages)
As seen above, the number of tourism enterprises increased every year, while the number of resorts, recreation and rest centers and treatment facilities decreased. However, recent data show that the number of foreign visitors increased in Azerbaijan. In 2014, the number of foreign visitors was 2297,8 thousand people in Azerbaijan, of which 2159,7 thousand people came for tourism purposes. As for those who travelled to foreign countries, their number was 4244,3 thousand people, while 3319,4 thousand people were on tourism purposes. The purposes of foreigners visiting the country was as follows: 32,8% - rest and entertainment, 31,1% - business, 2,2% - medical treatment, 0,6% - visit sacred places, 31,3% - visit relatives and friends, 2% - other purposes. The purposes of citizens of Azerbaijan, visiting other countries were as follow: 30,6% - rest and entertainment, 38,5% - business, 5,1% - medical treatment, 3,5% - visit sacred places, 17% - visit relatives and friends, 5,3% - other purposes. 77,7% of them arrived at their destination by air or by ground transports.
In 2014, most visitors in Azerbaijan were citizens of Russia, Georgia, Turkey, Iran, Ukraine, United Kingdom, Kazakhstan, Uzbekistan, USA, Germany, Italy and China. 79,4% of them stayed in hotels.
In 2014, the total incomes of tourism entities made up to 33,4 million US dollars, while the operation cost of tourism activity was 32,9 million dollars, of which 27,1% covered the payment of wages, 7,6% involved material costs, 4,4% dealt with fund amortization and 59,8% other costs. The analysis shows that the net profit of tourism entities amounted to 0,5 million US dollars
(Figure 3) Incomes gained due to activity of tourism entities in Azerbaijan (in million US dollars)
Labor resources define the bases of employment policy and stands for the main element of economic and social policy in Azerbaijan. The proper use of these resources helps maintain a macroeconomic stability in the country (Allahverdiyev, 1991). Although the rate of employment increased as well as the situation of the population engaged in the tourism industry that favorably changed in recent years, the employment rate in the country should not be considered fully satisfactory. At present, the protection of labor rights, the implementation of effective measures of social protection regarding labor and employment, the improvement of labor legislation, as well as the satisfying of material, social, spiritual and other vital needs of workers were included in the main priorities of the country’s social and economic policy. The implementation of such measures may allow to reduce the unemployment rate significantly and also protect the socially vulnerable layers of the population. At present, the implemented measures era concerned with the improvement of labor market, the increase of the quality, competitiveness and economic activity of labor resources, as well as the establishment of respective favorable conditions.
The implementation of the efficient strategy to attract foreign investments is one of the most
important aspects to the solution of the unemployment problem. According to a report of the World Tourism Organization released in 2010, tourism and related economic areas employ 8,1% of the global working population. According to scientists, tourism is a very labor-intensive field given that every eighth worker is employed in this industry.
In general, tourism as a labor-intensive field, opens up broad prospects for the development of small and medium entrepreneurship. Since the gained income in this field is almost equally distributed among contributors, it is of great interest to producers. The development of the tourism industry plays a significant role in creating new jobs, reducing unemployment and migration flows, as well as preventing the creation of new settlements (Salmanov, 2005). Tourism bears seasonal character and in certain cases some of the businesses need a large number of female workers (cleaners, washers, kitchen workers, etc.). This factor enables local residents to gain additional income and creates an opportunity to improve the social state of families.
The successful continuation of the economic development strategy has enabled the country to increase its economic capacity (Akhundova, 2019), as a result of which a sustainable and stable economic system was established. Certain influential factors such as the capital investments made by the government along with the preferential loans, assigned for entrepreneurship, as well as the implementation of infrastructure projects and also the creation of favorable conditions for foreign investors opened up big opportunities for some country’s regions to develop their economy. In recent years, the economic reforms carried out in the country concerned also the development of tourism industry. The development of tourism enables the country to enter the international tourism industry and eliminate its unemployment problem partially.
In order to develop the tourism sector in the country, the advanced model of sustainable development of this industry should be developed in accordance with the national economy while advantageous conditions for investments are needed as well. Through the implementation of the mentioned measures, the development of tourism may turn to be one of the priorities of the country’s economic policy. Nevertheless, these measures must be implemented continuously to reach the goal. In this regard, natural and geographical conditions and the advantages of every region should be evaluated in terms of attractiveness to tourism. Next, the potential for tourist activities of the different regions of Azerbaijan are analyzed.
The Absheron region, which possesses a paramount part of tourist resources, has a propitious position in terms of economic potential, transportation, qualified personnel and the evaluation of tourism resources. The fact that the capital Baku is located in this region, the region is situated on the sea shore, and it has modern transportation terminals, has an important role in the development of tourism activities (Bayramli & Aliyev, 2020). The climate of the economic region of Absheron is mildly hot to dry summer. In this territory there are desert, semi-desert, steppe and mountainous meadow landscapes. The average annual temperature in the region ranges from +13,5oC to 14,4oC. The frost period lasts 250 days or more a year, while the number of frozen days are between 10 and 20. Snow caps are visible no more than 10 days a year. Possible evaporation makes up to 1000 mm of water from April to October, whereas the number of dry days may last from 5 to 25 in the period from June to September. The annual amount of precipitation is 160-250 mm. The average annual wind speed is 4-6 m/s and higher.
Located on the shores of the Caspian Sea, the Absheron region is famous mainly for its sandy beaches. Resorts near or along the coast and also Baku city such as Mardakan, Sumgait, Zugulba, Bilgah, Pirshagi, Shikh, Novkhani and others operate mainly in the summer months. Besides, there are many various spa resorts (based on mud volcanoes), medical treatment facilities (tuberculosis, bone tuberculosis, rheumatism patients), sanatoriums, rest homes and summer camps in Absheron Peninsula. In addition, historical, cultural and religious monuments are also available in the region. However, a recent study has shown that special issues regarding pollution have to be addressed in order to be sustainable over time (Ogli, 2020).
Tourism resources of Guba-Khachmaz economic region are not completely used. Plenty of sunny days, as well as a larger number of warm days and sunshine are the main factors favorably impacting the development tourism. The annual temperature of the air is 20-25oC in the Pre-Caspian areas, while 17-23oC in the foothills. The average annual amount of total radiation varies from 134 to 131 kcal/cm2 (from North to South) while the number of non-frost days is 252-293 days a year. The sandy beaches of the territory are characterized by the availability of warm sea waters varying from 18 ºC to 24ºC. The beach season reaches up 140-160 days or 20-30 days more than that of the Black Sea. Sandy beaches of the Caspian Sea, thermal waters of treatment importance, cool springs, rich flora and fauna, coastal forests composed of endemic plants, as well as a range of majestic mountains with magnificent historical monuments and delicious cuisine offer great opportunities for the development of tourism in this region. In Guba-Khachmaz, the creation of new hotels and centers of medical treatment is more advisable in order to provide comfort to foreign visitors.
The territory of economic region of Sheki-Zagatala is characterized by the dominance of dry winter in its lower foothill part where the mild and warm climate of semi-deserts and steppes is spread, while humid cold climate is typical for the higher part of the region. Foothill areas are dominated by moderate warm climate whereas precipitation is distributed evenly by seasons. The frost period lasts 240-270 days. The average temperature of July as the hottest month is 22-26ºC. The amount of annual precipitation varies between 700 mm (the valley of Ganikh River) and 1200 mm (higher areas). The region is rich in mountainous and foothill landscapes, forests, mineral springs, water-and-climate-spa reserves. The climatic conditions of the region are favorable particularly from May to October. Tourism routes are stretched in foothill areas. The region is considered to be the large ancient territory of trading and handicraft. Cultural, historical and religious monuments are spread as well.
The economic region of Mountainous Shirvan is situated on the south-eastern part of the Greater Caucasus Mountains which has charming nature. The number of sunny hours is 2200-2500 hours in the foothills and the highlands, while 1900-2200 hours in the medium mountain areas where cloudy and hazy days dominate. The average temperature of July is 24-25ºC in the plains, as well as 20-15ºC in medium mountains and 10-5ºC in highlands. The average temperature of January is 0-4ºC in the plains, whereas the figure is 0-3ºC in foothills, 5-6ºC in the medium mountains and 6-14ºC in the highlands. This territory is favorable for the development of rest, sport and cognitive tourism since it has beautiful landscapes, mountain forests, spring waters and other natural recreational resources.
Ganja-Gazakh economic region has favorable climate and is rich in mineral water resources, and is characterized by the vast mountain and forest landscape. The climate in the lowland part of the economic region is hot and dry. The climate of mountainous areas is characterized by the prevalence of cold mountain-tundra climate and dry winter. The average annual amount of precipitation is 400-600 mm. The region has opportunities for developing the rest, the medical and the cognitive types of tourism. The Naftalan resort area of international importance is remarkable too.
The territory of Aran economic region is dominated mainly by dry subtropical climate. The number of sunny hours is 2200-2400. The active temperature varies between 40-46ºC from foothills to central parts of the region. Summer is very hot. The average temperature of the air reaches 26-28ºC in July. Often the absolute temperature of the air rises up to 40-43ºC in the summer. Winter is typically mild. The temperature of January ranges between 1-3ºC. Rarely the absolute minimum temperature may fall down to -8-12ºC. The opportunities for the development of tourism are fewer, though such activities as river tourism and medical tourism (on the basis of mineral waters) can be developed in the region.
Lankaran-Astara economic region encompasses the Lankaran plain and the adjacent medium mountain areas. In the areas of lower than 500 m of elevation, the climate is humid. The yearly active temperature makes up 3500-4500ºC, while the air temperature above 0ºC may be observed during 225-290 days. Summer is hot and dry for the most part. The average temperature in July is 24-26ºC, whereas the absolute maximum temperature reaches up to 33-35ºC. Winter is usually mild. The medium air temperature in January equates 2-4ºC, while the medium figure of absolute minimums is 5-11ºC. Snowy days vary from 10 to 30 days. Most of the precipitation falls to Lankaran and Astara areas (1200-1300 mm). The summer in mountainous areas is relatively cool.
There are all the conditions for the organization of all types of tourism in the region since the region is covered by mountains to the east and by forests and cool springs to the west. There are a lot of castles and temples, reflecting the ancient history of Azerbaijan in the region; on that basis cognitive tourism can be developed as well.
In Nakhchivan economic region, the lowest temperature of January is 31ºC, while the highest temperature (44ºC) is observed in August. These indicators are the highest and the lowest temperatures correspondingly in the overall territory of Azerbaijan Republic. Since humid air masses do not enter the region, Nakhchivan is characterized by a smaller amount of precipitations compared to other regions of Azerbaijan. Most of the precipitations are observed in the spring, whereas July, August and September are completely dry months. Heavy rains fall very rarely. The local winds usually blow between mountains and valleys. The average yearly speed of winds is 2-4 m/sec. Winds blow mainly from the east and the south-east in the summer and from the west in the winter. Nakhchivan has a huge potential for the development of cultural tourism, medical tourism, ecotourism and green rural tourism. Currently, only medical and health centers operate here due to the existence of salt mines in the region.
Conclusions
In general, it is important to develop the tourism industry sustainably in the regions of Azerbaijan as well as to include the regulatory and economic means into the tourism industry to make it more appropriate to the conditions of market economy. In order to achieve the ultimate goal concerning the development of the tourism industry, the following issues must be solved: the implementation of a state policy for the development of tourism industry; the development of entrepreneurship in the tourism industry with the purpose of establishing a competitive and sustainable tourism market; the raise of tourism services to the level of international standards; the strengthening of tourism infrastructure and its material and technical base, and the creation of a favorable business environment in order to attract foreign investors in the tourism sector. This work shows that there are great potentials for the tourism industry in the different regions of Azerbaijan, so its development can greatly influence the economy and increase the country’s living standards.
