Armenia's Tourism Sector Competitiveness

 

Interview with Artak Ghazaryan, Director, Competitive Armenian Private Sector (CAPS) Project

Photos by Hrair Hawk

As a project involved with private sector competitiveness issues, do you think that Armenia is currently competitive in terms of its tourism sector? Where do we stand now and what steps still need to be taken?

 

According to the World Economic Forum’s Travel & Tourism Competitiveness Index for 2009, Armenia is ranked 89th amongst 133 countries fo r which data is collected. This ranking therefore indicates that Armenia has a long way to go to be comp etitive in the international tourism market.

 

However, it is important to bear in mind that Armenia’s low ranking is due, to some extent, to the out-of-date statistics and information used to compile the index. CAPS has assisted in this regard so we hope to see a significant increase in the March 2011 rankings. Additionally, it is important to bear in mind that destination competitiveness, as measured by the WEF rankings, is only based on the views of the tourism industry and not the tourists who visit. The positive growth of tourism arrivals in Armenia in 2009, while many other destinations saw a decline, is a positive indication of Armenia’s competitiveness.

 

There are many steps still to be taken across Armenia’s tourism and hospitality industries. These include workforce development, education and training, marketing and promotion, legislation and policy reform, product development and business capacity. All are equally important.

 

If you are to mention one biggest factor impeding tourism development, what would it be?

 

As mentioned above, there are many factors obstructing the successful development of the tourism industry. However, I would perhaps suggest two critical issues. The first is the extent and quality of tourism data. At present, tourism statistics issued by the National Statistical Service are not accurate. They are estimations based upon studies and research undertaken as far back as 2007, hotel data and other sources. In order to develop products and services, devise supportive policies, target specific geographical or activity-based markets and then measure or evaluate your results, you have to have reliable data.

 

The second issue is the public sector budget for tourism promotion. Whether you look at absolute budget, budget in relation to country size or budget in relation to population, Armenia is sadly close to the bottom of the list.

 

Many have suggested that the costs involved in vacationing in Armenia are high. Indeed hotel accommodation, car hire and air transportation are higher than in a number of our competitor destinations. However, costs are relative to the level of tourism maturity. As tourism develops and visitor numbers increase, costs will inevitably fall.

 

Is there a good vision and coordination between the RA government, donor-driven and local organizations on where the country could move in terms of its tourism development?

I believe so, certainly when you compare the level of coordination to when the project started four years ago. This has to be attributed, in part, to the cluster process employed by CAPS.

 

The cluster concept is fundamental and comprises a wide variety of stakeholders including government as a regulator of commercial practice, educational institutions to prepare members of the workforce, business development services to offer consulting and other management services, and the core industry itself delivering products or services to customers. The cluster process coordinates all such stakeholders in pursuit of mutually supportive objectives, most commonly in marketing and image building, improving industry-wide quality, training the workforce, and/or enacting more favorable legislation. We now have a government-adopted national tourism development strategy. It’s difficult to say that we have consensus from the whole industry, but certainly the government bodies are reaching out more to involve the private sector than at any time in the past. The lack of a ‘whole industry’ consensus is not surprising given the phase of tourism development and the experience of some of our private sector stakeholders.

 

In your opinion, what types of tourism have potential to develop in Armenia?

 

•  Cultural/Historical Tourism
•  Soft adventure Tourism
•  Faith-based Tourism
•  Spa Tourism

 

As we all know the economic development of Armenia is mainly focused on the capital city, with the regions being overseen in many respects. What do you think of the development of rural tourism in Armenia? Has CAPS or any other organization looked at this issue?

 

CAPS has undertaken a limited number of initiatives to develop tourism in rural areas. I think it is fair to say that, based on our experience, there is a significant gap in the capacity of people between those in the regions and those in Yerevan to develop or become engaged in the tourism industry. This observation is backed up by the significant number of tours that avoid overnight accommodation outside of Yerevan.