Market Report

Market Report: Baku, Azerbaijan

Our latest market report on Baku, Azerbaijan, provides an insightful overview of the city's evolving tourism and hospitality landscape.

Baku, the largest city in the South Caucasus, is capitalizing on its unique geographic location and cultural heritage to become a significant tourism destination. Baku has more than its nine ‘climate zones’ and oil industry to boast about.

Hotel development is booming as the market begins to appreciate the economic upside offered by tourism. The diversification of hotel products attracts leisure travellers to the country, extends the booking period and minimises the reliance on corporate travel.

Tourism Growth
Baku’s tourism sector is flourishing, buoyed by the city’s rich historical offerings, diverse climates, and strategic position bridging Europe and Asia. With a population exceeding two million, Baku presents a blend of historical sites and modern attractions. Notably, many of its architectural monuments are UNESCO World Heritage sites. Recent government efforts to prioritize tourism have paid off, with a significant increase in passenger volume at Heydar Aliyev International Airport from 3 million in 2015 to 4.3 million in 2018. This surge in arrivals has led to a doubling of hotel guest nights from 2013 to 2017.

Hotel Market Dynamics
The hotel market in Baku has experienced a shift in its primary clientele from corporate to leisure travelers. This change is largely due to heightened media coverage and proactive marketing by the Tourism Agency and local Destination Management Companies (DMCs). The main source markets for tourism have been the GCC countries, with Russia, Georgia, and Turkey being prominent in the countryside.

Hotel Development
Baku has seen substantial hotel development with major international brands establishing a presence. High-end hotels like Fairmont, Four Seasons, and JW Marriott cater to the upscale and luxury segments, while midscale options are provided by brands such as Park Inn by Radisson and Holiday Inn. The development pipeline looks promising with future openings from Hilton Garden Inn, Courtyard by Marriott, Ibis, and Novotel.

Local Hotel Industry
Local hotel companies have also thrived, creating high-quality assets and diverse services. Companies like Gilan Hospitality Group, Absheron Hotel Group, and PMD Hospitality have developed successful hotel properties in Baku and across Azerbaijan. The ongoing development will likely see more local and international brands entering the market, enhancing the city’s appeal to both corporate and leisure travellers.