Azerbaijan’s tourism and hospitality sector is entering a new phase of expansion, supported by rising international visitor numbers, growing tourism spending, government-backed development initiatives and increasing investment in both urban and leisure destinations.

Located at the crossroads of Europe and Asia, Azerbaijan has positioned itself as a destination that combines modern city experiences, UNESCO-listed heritage sites, mountain tourism, wellness resorts, Caspian Sea attractions and a growing calendar of international events.

While Baku remains the country’s dominant tourism and hospitality hub, destinations such as Gabala, Shahdag, Sheki, Ganja and the Karabakh region are attracting increasing attention as authorities seek to diversify tourism beyond the capital.

Tourism demand continues to strengthen

Azerbaijan’s tourism sector has continued its post-pandemic recovery, supported by improved air connectivity, destination marketing and growing international awareness.

According to the World Travel & Tourism Council (WTTC), the country’s travel and tourism sector is expected to contribute AZN 10.3 billion to the national economy in 2025, equivalent to approximately 8.2% of GDP. The sector is also forecast to support around 472,000 jobs, highlighting its growing importance to Azerbaijan’s economic diversification efforts.

The WTTC also forecasts international visitor spending to reach approximately AZN 5.5 billion in 2025, surpassing pre-pandemic levels and reflecting stronger demand from both regional and long-haul markets.

According to Azerbaijan’s tourism authorities, the country welcomed approximately 2.57 million international visitors in 2025, driven by demand from neighbouring countries, the Gulf region, Europe and Central Asia.

International events continue to play an important role in supporting visitor growth. Baku has strengthened its reputation as a regional events destination through major sporting competitions, business conferences, cultural festivals and entertainment events that attract both domestic and international travellers.

Government strategy supports long-term tourism growth

Tourism remains a key pillar of Azerbaijan’s strategy to diversify its economy beyond the energy sector.

According to the Azerbaijan Tourism Board, the country’s Tourism Strategy 2023-2026 focuses on improving destination competitiveness, enhancing tourism infrastructure, attracting private investment and expanding tourism offerings beyond traditional city tourism.

The strategy places particular emphasis on nature-based tourism, cultural tourism, wellness experiences, winter sports and regional destination development.

According to the U.S. Department of Commerce, Azerbaijan has continued investing in tourism infrastructure, destination promotion and digital tourism services while seeking to attract visitors from a wider range of international source markets.

Industry stakeholders believe these initiatives will support long-term growth while helping increase visitor spending and average length of stay.

Baku remains the centre of tourism activity

Home to more than two million residents, Baku remains Azerbaijan’s primary tourism gateway and accounts for the majority of the country’s international hotel supply.

The capital has established itself as one of the Caucasus region’s leading city-break destinations thanks to its combination of historic architecture, modern urban development, luxury retail, cultural attractions and waterfront experiences along the Caspian Sea.

The city’s appeal is further strengthened by landmarks such as the UNESCO-listed Old City, the Flame Towers, the Heydar Aliyev Center and the expanding network of restaurants, cafés and entertainment venues.

Improved international air connectivity through Baku’s Heydar Aliyev International Airport continues to support tourism growth and strengthen Azerbaijan’s accessibility from key regional and international markets.

Hotel development expands beyond the capital

Azerbaijan has one of the most internationally branded hotel markets in the South Caucasus, reflecting years of investment in tourism infrastructure and hospitality development.

Baku is home to numerous global hotel operators, including Four Seasons, Marriott International, Hilton, Accor and IHG Hotels & Resorts, serving both leisure and business travellers.

At the same time, hotel development is increasingly extending into regional tourism destinations. According to the Azerbaijan Tourism Board, destinations such as Shahdag, Gabala and Sheki have become important focal points for tourism investment due to their potential for mountain tourism, wellness experiences, outdoor recreation and cultural travel.

Government-backed infrastructure projects, improved transport connections and destination development initiatives are helping attract investment into accommodation, tourism services and visitor attractions across the country.

The redevelopment of territories in the Karabakh region is also expected to create new opportunities for tourism and hospitality investment over the coming years as infrastructure projects progress and visitor access improves.

Regional tourism destinations gain momentum

Azerbaijan’s long-term tourism strategy places significant emphasis on regional development.

Shahdag has emerged as one of the country’s leading mountain tourism destinations, attracting visitors for winter sports and outdoor activities throughout the year. Gabala continues to grow as a leisure and family tourism destination, while Sheki remains one of Azerbaijan’s most important cultural tourism centres thanks to its historic architecture and UNESCO World Heritage recognition.

Authorities are also promoting ecotourism, wellness tourism and rural tourism experiences as part of efforts to diversify the country’s tourism offering and encourage visitors to explore destinations beyond Baku.

Outlook remains positive

Azerbaijan’s tourism sector appears well positioned for continued growth over the coming years. Rising visitor numbers, increasing tourism spending, ongoing infrastructure investment and strong government support are creating favourable conditions for further expansion.

As tourism development spreads beyond the capital and new hospitality projects emerge across the country’s leisure destinations, Azerbaijan is strengthening its position as one of the Caucasus region’s most dynamic tourism and hospitality markets.