Tourism support package: can Azerbaijan reach its target of 3.8 million tourists?
State support for tourism in Azerbaijan
A new State Programme, approved by an order from President Ilham Aliyev, aims to develop the tourism sector in the coming years, attract more foreign tourists and expand tourism beyond Baku.
The programme comes into effect as the tourism industry faces a decline in key indicators. In the first half of 2026, 1.09 million foreigners and stateless people entered Azerbaijan. That was 10.3% fewer than in the same period last year. Arrivals from the Gulf states fell by 31.4%, hotel overnight stays by 8.3%, and hotel revenues by 3.8%.
Target for 2030: 3.8 million tourists
Under the State Programme, the added value generated by industries directly linked to tourism — that is, the sector’s actual contribution to the economy — should increase from 6.96 billion manats (around $4.1 billion) in 2025 to 8.51 billion manats in 2027 and 12.17 billion manats (around $7.2 billion) in 2030.
The programme targets real growth of around 40% in the tourism sector by 2030. “Real growth” refers not to a nominal increase caused by higher prices, but to an actual increase in the volume of goods and services produced.
The number of foreign arrivals is expected to rise from 2.57 million in 2025 to 3.8 million by 2030.
The target for 2026 is 2.42 million arrivals. Given the 10.3% decline recorded in the first half of the year, the country will need a significant improvement in the second half to meet that target.
At the same time, competition is intensifying. In the World Economic Forum’s 2024 Travel & Tourism Development Index, Azerbaijan ranks 56th out of 119 countries. Georgia ranks 45th, Kazakhstan 52nd and Uzbekistan 78th.
In 2025, Georgia reported 5.5 million tourist trips, Uzbekistan 11.7 million foreign tourists and Kazakhstan 15.7 million foreign visitors. The countries use different methods to count tourists and visitors, so these figures are not directly comparable. Nevertheless, they show that Azerbaijan’s tourism industry faces significant competition from its regional neighbours.
Subsidies, new air routes and a simplified visa regime
The programme provides for extensive state support. The government plans to offer subsidies to local tour operators that bring tourists to Azerbaijan, as well as to micro and small businesses operating in the tourism sector.
The measures also include partial compensation for the cost of charter flights, incentives for additional scheduled flights to Azerbaijan from priority countries, and financial support for concerts and other entertainment events.
Another area focuses on making entry to the country easier. The programme provides for expanding visa-free access for citizens of 34 target markets, expanding the e-visa system and introducing a “digital nomad” visa in 2027–2028. The visa will target people who work remotely and want to live in another country for an extended period.
The plan also calls for the development of regional tourism zones, walking routes, wellness and gastronomic tourism. These measures could help reduce Azerbaijan’s tourism sector’s dependence on Baku, expensive hotels and major international events.
A 2026 World Bank analysis also notes shortcomings in transport links, accommodation infrastructure, local tour operators and the quality of services in the regions.
At least on paper, therefore, the programme correctly identifies many of the sector’s existing problems.
The problem is not just a lack of subsidies
The key question is whether state support alone can make Azerbaijan a more affordable and competitive tourist destination.
The State Programme itself also highlights the high concentration of the air travel market, meaning that a relatively small number of companies provide most of the services, as well as a limited supply of hotel rooms, high prices, and problems with hygiene and service quality.
At the same time, the presence of low-cost airlines in Baku has expanded compared with previous years. In July, Heydar Aliyev International Airport said that around 20 low-cost and hybrid airlines operated flights from Baku to more than 20 international destinations.
The problem, therefore, can no longer be reduced to the claim that “there are no low-cost airlines in Azerbaijan”. Other questions have become more important: how frequently do these airlines operate, which cities do they serve, and does competition between airlines have a real impact on ticket prices?
The position of major business groups in the tourism and hotel markets also matters in this context.
According to publicly available information from PAŞA Holding, whose shareholders include the president’s father-in-law and daughters, its wholly owned Absheron Hotel Group operates hotels including the Four Seasons Baku, JW Marriott Absheron and Ritz-Carlton Baku. PAŞA Travel, another company within the group, attracts tourists to the country, books hotels and provides transport services.
This means that companies belonging to the same business group operate at different stages of the tourism supply chain. In economics, this model is known as “vertical integration”.
Vertical integration is not illegal or necessarily harmful in itself. However, even without complete public data on market shares, an important question remains: what rules will determine how subsidies are distributed among companies of different sizes?
The key question is whether state support will help new and smaller companies enter the market, or whether companies that already have significant resources will benefit from it disproportionately.
Who will receive the money and for what?
Under the presidential order, the Cabinet of Ministers must develop rules for awarding subsidies within three months. So, although the programme has already been approved, one key question remains unanswered: which companies will receive state funding, under what criteria and for achieving which results?
The Centre for Analysis of Economic Reforms and Communication has been tasked with monitoring and evaluating the programme’s implementation.
However, the effectiveness of oversight will depend not only on which agency is responsible for it. It will also depend on how much information the public can access about the companies that receive subsidies, the amounts they receive and the results they achieve.
During previous audits of other state support programmes, the Accounts Chamber identified problems including insufficient justification for spending on individual projects and a lack of data needed to assess their results. These findings do not directly concern the tourism programme, but they highlight the importance of ensuring that the new subsidy mechanism relies on clear and measurable criteria from the outset.
Price is not the only factor in a tourist’s decision
Entry requirements also have a direct impact on the competitiveness of the tourism sector.
At present, travellers can enter Azerbaijan by air, while crossing the country’s land borders remains largely restricted and subject to special rules. Since 25 May, rail travel with Georgia has been subject to exceptions for Azerbaijani citizens and some foreign nationals who are eligible for visa-free entry to the country.
Tourists also consider a country’s overall reputation. The UK Foreign Office generally assesses crime levels in Baku as low, but notes that there are occasional reports of foreign nationals being asked to make unofficial payments.
In Reporters Without Borders’ 2026 World Press Freedom Index, Azerbaijan ranks 171st out of 180 countries. In Transparency International’s 2025 Corruption Perceptions Index, it ranks 130th out of 182 countries.
These rankings do not directly determine whether tourists will visit Azerbaijan. However, they form part of the broader context shaping international perceptions of the country, assessments of the predictability of its legal and business environment, and investors’ assessments of risk.
State support for tourism in Azerbaijan
