Azerbaijan heading for hotel construction boom
Published on 24/07/2015
For decades, Azerbaijan's economy has been based around the production of primary resources, particularly oil and gas. However, this is beginning to change. The nation is becoming a popular tourist destination, which is having very positive effects for the Azeri construction industry as the need for new hotels grows.
This has occurred naturally in recent years, with several international companies investing in Azerbaijan and constructing large, luxury hotels. However, the Azeri government is now taking action to increase the number of tourists coming into the country and improve their experience when they stay there.
Part of this will involve the construction of more hotels, as well as a range of other projects that will bring more revenue to the build and interiors industry within Azerbaijan. The government's decisions look set to boost the industry and increase activity in this sector as more tourists come into the country each year.
A boost in tourism
An announcement made by Vugar Shikhammadov, head of the Information and Public Relations Department at Azerbaijan's Culture and Tourism Ministry, has revealed the Azeri government's plans to boost tourism. Mr Shikhammadov said the government was planning to reduce the cost of air fares to Azerbaijan. It is thought that this will especially attract tourists from Turkey, Russia and Europe.
The nation's Foreign Ministry is also taking steps to make it easier for tourists to obtain a visa, which is necessary in order to visit Azerbaijan. In particular, the online 'e-visa' procurement system is being upgraded so that it is easier for potential visitors to use.
These instructions came directly from Azeri president Ilham Aliyev in a cabinet meeting, highlighting just how important boosting tourism is to the government. Another major step in these efforts to attract more visitors is to reduce hotel prices while constructing more budget, two and three-star hotels in Azerbaijan.
Hotel construction to rise
Currently, Azerbaijan has 530 hotels around the country. These have a combined capacity of roughly 35,000 guests. In a bid to see a rise in tourism, the Azeri government wants to significantly increase this capacity over the next few years, particularly in the budget hotel sector.
Azerbaijan has a disproportionately large number of luxury hotels. Most recently, the 33-storey Trump Hotel Baku was announced, featuring rooms up to 890 sqm in size. This will bring wealthy travellers into Azerbaijan, but the nation needs to increase the numbers of average tourists that choose the country as a holiday destination.
To this end, the government is pushing for the construction of two and three-star hotels, as well as budget tourist accommodation for low-income travellers. Muzaffar Agakerimov, Azeri tourism association adviser, has suggested that these hotels be built to match the price of tourist accommodation in neighbouring Iran and Turkey.
The impact of other major projects
Of course, hotel construction is not the only way to attract visitors to Azerbaijan. We have already talked about how the nation is boosting tourism through sport, which itself has led to a range of construction projects. However, this is not the only effort the Azeri government has made to distance its image from that of an oil-producing country.
Another is Baku White City. This is literally a transformation from a production economy into a service one, as the project is being built on a former industrial site in eastern Baku known as the Black City. The project will see a wide range of residential and commercial buildings constructed in an attempt to create a new centre for Baku.
There are many planned goals for the scheme, one of which is to attract tourists. White City will become a commercial hub, with many new and exciting retail opportunities. Reflecting this is the fact that many hotels are planned for the area, including the recently opened Bulvar Hotel, which is the largest in Azerbaijan.