AZE.US
Baku’s hotels and restaurants are feeling the impact of a sharp slowdown in tourist arrivals, as fewer visitors from Iran and Arab countries travel to Azerbaijan. Businesses in the city center say the decline is already visible in lower sales, weaker bookings and empty tables ahead of the summer season.
The change is especially noticeable in parts of central Baku that were once crowded with Iranian and Arab tour groups. Business owners say the usual tourist presence on streets such as Nizami has faded, leaving shops, cafes and restaurants with fewer customers than in previous years.
The downturn is affecting more than one segment of the market. A carpet seller in Baku said Arab tourists were among the strongest buyers and that business has now slowed to the point where souvenir sales are keeping some stores afloat. Others in the sector say some food and beverage venues have already closed in the first quarter as revenues weakened.
Industry participants say the fall has been steep. In some cases, revenues were said to be down about 40% from March levels, while businesses that had expected a stronger Novruz holiday season reported that those expectations collapsed. Some market players estimated the drop compared with last year at close to 70%.
Hotels are also under pressure, but they are not the only ones losing business. Market participants say many of the tourists who still come are choosing private apartments in central Baku instead of hotels. As a result, daily rental prices that were previously around 300 to 500 manats in this period have in some cases dropped to about 100 manats.
According to the report, the main reason for the drop in Iranian and Arab tourist arrivals is the war in Iran, but not the only one. Experts also pointed to rising insurance costs, more expensive air travel, regional security concerns and the high cost structure inside Azerbaijan’s tourism market.
The pressure is already showing up in the numbers. According to the State Statistics Committee data cited in the report, Azerbaijan received more than 508,000 tourists in the first quarter of last year. While the full March 2026 figures had not yet been released at the time of the report, January-February data already showed a decline from the previous year.
Officials in the tourism sector say they are now trying to compensate by focusing more heavily on other markets, including Eastern Europe, China and Russia. Even so, the immediate picture for Baku’s tourism business is clear: fewer regional visitors are leaving a visible hole in hotels, restaurants and street-level commerce at a sensitive moment for the industry.
AZE.US