Importance of Chinese Tourism Market for Sustainable Tourism Development of Azerbaijan

INTRODUCTION

Azerbaijan's strategic location at the crossroads of Europe and Asia has evolved from a simple geographic advantage into a key asset in global trade and tourism. This transformation is supported by active infrastructure development, strategic international agreements, and deepening economic partnerships. Bordered by Georgia and Turkey to the west and linked to Central Asia and China to the east via the Trans-Caspian International Transport Route, commonly known as the "Middle Corridor," Azerbaijan has become an important transit hub in Eurasia [2] (Aliyeva, 2024).

In April 2025, bilateral relations between Azerbaijan and China reached a new level when the two countries strengthened their partnership by signing a Joint Statement on Comprehensive Strategic Partnership during President Ilham Aliyev's state visit to China [11] (AIR Center, 2025). This agreement covers cooperation in various sectors, including trade, green energy, the digital economy, and tourism. Specifically, it introduced a mutual visa-free regime for ordinary passport holders and established direct air links between Baku and Beijing, significantly improving transport accessibility and facilitating cross-border travel [11] (AIR Center, 2025).

Azerbaijan's active participation in China's Belt and Road Initiative (BRI) further strengthens its role as a key player in regional transport connectivity. The development of the Middle Corridor, complemented by projects such as the Baku-Tbilisi-Kars railway and the Alat Free Economic Zone, demonstrates Azerbaijan's commitment to creating efficient trade and transport corridors between China and Europe [23] (Musayeva, 2023). These infrastructure investments have created a favorable environment not only for trade flows but also for the development of tourism.

The impact of these strategic initiatives on tourism flows has been significant. In the first six months of 2025, Azerbaijan welcomed 26,156 Chinese tourists – a 57.5% increase compared to the same period in 2024 [28] (The State Migration Service of Azerbaijan, 2025). This growth is attributed to policy initiatives such as a one-year visa-free regime for Chinese tourists, direct flights, and targeted marketing campaigns.

Taken together, Azerbaijan's strategic geographic location, reinforced by infrastructure investments and strengthened diplomatic ties, has transformed the country into a hub for trade and tourism between China and Europe. This comprehensive approach not only enhances economic growth but also fosters deeper cultural and people-to-people connections, paving the way for sustained bilateral cooperation and mutual prosperity.

There are sufficient opportunities for the additional growth of China-Azerbaijan tourism relations, reflecting the growing strategic and economic significance of bilateral cooperation in tourism. The development of bilateral relations is supported by the complementarity of the two nations' tourism potentials – Azerbaijan's cultural heritage, diverse natural environment, and focus on sustainable tourism development, on the one hand, and China's rapidly expanding outbound market and increasing demand for new, non-synthetic destinations, on the other. All of these offer a good basis for the expansion of mutual understanding, cultural exchange, and economic cooperation through tourism. The potential for expansion of the number of Chinese tourists to Azerbaijan is thus great, particularly through targeted marketing, improved transport connectivity, and the provision of tourism products and services that cater to Chinese requirements. Such initiatives can be pivotal in bolstering people-to-people ties and furthering long-term, sustainable tourism cooperation between the two nations.

This paper makes novel contributions to the understanding of China–Azerbaijan tourism relations. While other studies primarily adopt descriptive overviews, this article, for the first time, incorporates long-term statistical analysis from 2005 to 2024 and identifies, through empirical findings, the main determinants of tourism revenue associated with the Chinese market. From the multiple regression outcomes, the fact that employment infrastructure and accommodation supply significantly impact the revenues of tourism provides fresh evidence for strategic sectoral development in Azerbaijan. In sum, the combined empirical approach used in the article has not been applied earlier to the China–Azerbaijan tourism partnership.

LITERATURE REVIEW

The significance and paradigm of sustainable tourism

Tourism holds considerable importance in today's world, largely due to the vast scale of its operations and the rapid pace at which it is growing. While the number of tourists is one indicator of its significance, tourism's true importance extends beyond just figures. Firstly, it lies in the wide range of effects tourism has on local, regional, national, and global levels. Secondly, tourism takes on added meaning as it reflects and symbolizes contemporary lifestyles, cultural preferences, and the broader characteristics of (post)modern society [24] (Pender, Sharpley, 2005, pp. 6–13).

Sustainable tourism has evolved from a peripheral concern to a central paradigm in tourism studies and policy over the past three decades. The concept emerged from broader sustainable development discourse following the Brundtland Report [35] (WCED, 1987) and gained prominence with the United Nations World Tourism Organization's definition of sustainable tourism as "tourism that takes full account of its current and future economic, social and environmental impacts, addressing the needs of visitors, the industry, the environment and host communities" [32] (UNWTO, 2005). This definition emphasizes the triple-bottom-line approach, requiring balance among economic viability, environmental integrity, and sociocultural authenticity [8] (Elkington, 1997).

The academic literature identifies several key dimensions of sustainable tourism. Economic sustainability focuses on generating stable employment, income distribution, and contribution to local economies without creating dependency or economic leakage [18, 26] (Liu, 2003; Sharpley, 2000). Environmental sustainability addresses the preservation of natural resources, biodiversity protection, and minimization of carbon footprints and waste generation [6, 14] (Buckley, 2012; Hunter, 1997). Sociocultural sustainability emphasizes respect for local communities, preservation of cultural heritage, and equitable participation of stakeholders in tourism development decisions [22, 25] (Moscardo, 2008; Richards, Hall, 2000).

A review of the literature regarding China's tourism policies suggests that its development has changed dramatically since the establishment of the People's Republic of China. Tourism development was, in the beginning, primarily viewed as a political tool, but it gradually became identified as one of the important tertiary industries soon after Deng Xiaoping introduced reform and opened-up policies [12] (Huang, 2010).

One previous study analyzed global government approaches to tourism based on policies and plans published by national tourism authorities. Abby Liu and Hsiou-Hsiang Jack [18] (Liu, Hsiou-Hsiang, 2009) collected 63 current tourism policies, plans, and visions from 176 countries and used content analysis to determine how governments prioritize tourism development. From this analysis, the majority of tourism policies across the globe are economically driven and oriented towards growth, and, often, industrial interests dominate. Additionally, a country's stage of economic development influences what to look for, as many developed countries pay more attention to local tourism issues than developing countries [18] (Liu, Hsiou-Hsiang, 2009).

Tourism forecasting and strategic planning

Forecasting in tourism serves as a strategic tool for managing uncertainty and planning for sustainable development. Pender and Sharpley [24] (Pender, Sharpley, 2005) emphasize that tourism revenue forecasts depend on macroeconomic trends, demographic shifts, consumer preferences, and policy frameworks. Accurate forecasting allows destination managers to anticipate infrastructure needs, direct investment, and balance economic benefits with social and environmental responsibility. The authors also note that inappropriate forecasts can lead to either underdevelopment or overcapacity. For Azerbaijan, particularly in the context of attracting Chinese tourists, such forecasting is essential for optimizing revenues while minimizing sustainability risks [24] (Pender, Sharpley, 2005).

Williams [36] (Williams, 2009) further highlights that forecasting tourism income is vital for managing the spatial and temporal dimensions of tourism flows. He argues that demand forecasting helps prepare regions for fluctuations in visitor numbers, ensuring more effective use of infrastructure and resources. Williams identifies factors such as income levels, transport accessibility, consumer behavior, and destination competitiveness as major influences on tourism income. Accurate forecasting not only aids economic planning but also mitigates negative impacts like overcrowding and environmental degradation. For countries like Azerbaijan, understanding these dynamics is crucial when planning for growing markets such as Chinese outbound tourism [36] (Williams, 2009).

From a methodological perspective, Tikhonova [29] (Tikhonova, 2008) proposes regression modeling as an effective tool for forecasting tourism demand, using historical data to estimate future trends. This approach considers variables such as per capita income, transportation costs, exchange rates, and advertising. Accurate forecasts allow policymakers to anticipate potential impacts on employment, infrastructure, and the local economy. Furthermore, factors such as tourist loyalty, global events, and destination image shape demand dynamics. Understanding these relationships facilitates the development of sustainable tourism policies, especially when working with emerging markets such as China. The convergence of these forecasting approaches underscores the need for data-driven strategic planning in managing bilateral tourism relations [29] (Tikhonova, 2008).

Chinese outbound tourism: growth, characteristics, and global impact

China's emergence as the world's largest source of outbound tourism represents one of the most significant transformations in global tourism over the past two decades. Outbound tourism from China grew from approximately 10 million trips in 2000 to more than 150 million in 2019, before the COVID-19 pandemic temporarily disrupted this trajectory [7] (China Tourism Academy, 2020). This unprecedented growth was driven by rising middle-class incomes, easing travel restrictions, simplified visa procedures in destination countries, and increased awareness of international destinations [17] (Li et al., 2011).

Haibo et al. [10] (Haibo, Ayamba, Udimal, et al., 2020) emphasize that the rapid growth of China's tourism sector is the result of economic reforms and the strategic implementation of sustainable development principles. The Chinese government has integrated tourism into national development plans, leveraging its rich cultural heritage and institutional support to attract international tourists. This structured promotion of tourism highlights the market's potential not only as an economic driver but also as a tool of soft power. The Chinese model demonstrates how tourism can be strategically used to achieve broader national goals, including cultural diplomacy and international engagement [10] (Haibo, Ayamba, Udimal, et al., 2020).

The impact of Chinese tourism on destination countries is significant and multifaceted. Economically, Chinese tourists are often affluent visitors, contributing significantly to the income of participating countries and creating jobs [33] (UNWTO, 2019). A number of countries have implemented "China-ready" programs – comprehensive initiatives aimed at making countries more accessible and attractive to Chinese tourists through services such as Chinese-language signage, mobile payment systems (WeChat Pay, Alipay), and culturally adapted amenities [30, 34] (Tourism Australia, 2017; VisitBritain, 2018). However, the rapid growth of Chinese tourism has also given rise to challenges, including overtourism in popular destinations, cultural misunderstandings, and environmental pressures [16] (Koens et al., 2018). These dual aspects – economic opportunities and potential challenges – underscore the need for strategic management of Chinese tourism flows.

China's Belt and Road Initiative (BRI), announced in 2013, has emerged as a significant framework shaping economic relations and connectivity between China and participating countries. The initiative encompasses infrastructure development, trade facilitation, financial integration, and people-to-people exchanges across Asia, Europe, and Africa [13, 19] (Huang, 2016; Liu, Dunford, 2016). Tourism has been explicitly identified as a priority sector within the BRI framework, with the expectation that improved connectivity will facilitate tourism flows and economic cooperation [37] (Zhang, Zhang, 2020).

Azerbaijan's tourism development and China relations

Azerbaijan's tourism development reflects both general post-Soviet patterns and country-specific characteristics. The country boasts diverse tourism resources, including UNESCO World Heritage sites, coastal areas of the Caspian Sea, mountainous regions suitable for adventure tourism, and a rich cultural heritage reflecting its position at the crossroads of civilizations. After gaining independence, Azerbaijan initially focused on developing the oil sector, but has increasingly pursued economic diversification strategies, in which tourism plays an increasingly important role.

A recent study by Huseynova and Rzamova [15] (Huseynova, Rzamova, 2025)used econometric methods to examine the relationship between the tourism sector and economic growth in Azerbaijan. The study emphasizes that while tourism is not the sole driver of growth, it does play an important role. The authors suggest that policy should focus on improving tourism infrastructure, promoting sustainable development, and leveraging tourism as part of economic diversification. This finding confirms the strategic importance of tourism in Azerbaijan's post-oil economic transition [15] (Huseynova, Rzamova, 2025).

The deepening of Azerbaijan-China relations has significant implications for tourism development. Ismayilova [3] (Ismayilova, 2025) highlights the strategic evolution of Azerbaijan-China relations, highlighting China as Azerbaijan's main import partner and a key investor in renewable energy and logistics. The development of the Middle Corridor and digital connectivity platforms reflects China's growing role in Azerbaijan's economic diversification. These growing ties demonstrate China's importance not only in trade but also in shaping Azerbaijan's tourism and transport potential, confirming the relevance of targeting the Chinese tourism market as part of sustainable development efforts. The combination of economic integration, improved transport accessibility, and strengthened diplomatic ties creates a favorable environment for bilateral tourism growth [3] (Ismayilova, 2025).

METHODOLOGY

This study employs a quantitative research design to assess the significance of the Chinese tourism market in the context of Azerbaijan’s sustainable tourism development. Quantitative methodology is particularly appropriate given the study’s objective of identifying measurable relationships between tourism indicators and economic outcomes over an extended time horizon.

The core analytical framework integrates descriptive statistical analysis with econometric modeling. Descriptive techniques are utilized to examine long-term bilateral tourism trends between China and Azerbaijan, while multiple regression models are applied to empirically investigate the determinants of tourism-related foreign exchange earnings and sectoral income generation. By combining trend-based analysis with causal inference methods, the study achieves a comprehensive evaluation of both structural developments and dynamic interactions within China–Azerbaijan tourism relations.

This mixed quantitative approach enables the study to capture not only observable changes in tourism flows and infrastructure but also the underlying economic mechanisms through which tourism contributes to national income and sustainable development.

The empirical analysis is based on secondary quantitative data compiled from the official statistical agencies of China and Azerbaijan for the period 2005–2024. Data reliability and consistency were ensured by exclusively utilizing nationally recognized statistical institutions.

Tourism-related indicators for China were obtained from the National Bureau of Statistics of China. These include the number of travel agencies, number of star-rated hotels, overseas visitor arrivals (measured in 10,000 person-times), foreigner arrivals, arrivals of Chinese compatriots from Hong Kong and Macao, arrivals from Taiwan Province, overnight tourist arrivals, outbound tourism flows, foreign exchange receipts from international tourism, domestic tourism revenues, and the total number of domestic tourists.

For Azerbaijan, data were sourced from the State Statistical Committee of the Republic of Azerbaijan. The analyzed indicators comprise the number of tour operators and travel agencies, employment in the tourism sector, gross revenues of tourism enterprises, foreign and stateless visitors entering Azerbaijan, Azerbaijani citizens traveling abroad, the total number of hotels and hotel-type establishments, accommodation capacity measured by the number of rooms, and tourism’s contribution to gross domestic product (GDP).

In addition, bilateral tourism exchange statistics between Azerbaijan and China for the period 2020–2023 were incorporated to capture recent dynamics and post-pandemic recovery patterns. All datasets underwent systematic verification, harmonization, and cross-checking to ensure internal consistency and analytical validity prior to econometric estimation.

Descriptive statistical techniques were initially applied to identify patterns and trends in tourism flows between China and Azerbaijan. These analyses included:

Model 1. Tourism ınfrastructure and visitor flows

The first regression model evaluates the impact of tourism infrastructure and international visitor flows on foreign exchange earnings from tourism:

In this model, foreign exchange earnings from tourism in year t ( ) are specified as the dependent variable. The explanatory variables include the number of travel agencies ( ), which reflects the institutional capacity of the tourism sector, and the number of overseas visitors ( ), capturing the scale of international tourism demand. In addition, the model incorporates the number of foreigner arrivals lagged by one period ( ) in order to account for the delayed effect of tourist inflows on foreign exchange earnings. The parameters and represent the coefficients to be estimated, while denotes the stochastic error term, which captures the influence of unobserved factors and random shocks affecting tourism revenues.

The inclusion of a lagged foreigner arrivals variable accounts for the temporal adjustment between tourist inflows and their realized economic contribution, reflecting the delayed transmission of tourism demand into foreign exchange revenues.

Model 2: Employment and Accommodation Capacity

The second regression model focuses on income generation within the tourism industry by examining the role of employment and accommodation infrastructure:

In this model, the gross income of travel agencies in year t ( ) is specified as the dependent variable. The explanatory variables include tourism sector employment ( ), which reflects labor input and service capacity within the industry, and the number of available rooms ( ), representing accommodation capacity. The number of travel agencies ( ) and the total number of hotels ( ) are included to capture the scale and structural development of the tourism infrastructure. In addition, hotel availability lagged by one period ( ) is incorporated to account for the delayed impact of accommodation investments on agency income. The parameters and denote the regression coefficients to be estimated, while represents the error term, capturing the effects of unobserved factors and random disturbances influencing travel agency revenues. The lagged accommodation variable reflects the delayed economic impact of infrastructure investments, as newly developed hotel capacity typically influences revenues with a time lag.Both regression models were estimated using the Ordinary Least Squares (OLS) method. Under the classical linear regression assumptions of linearity, exogeneity, homoscedasticity, and normally distributed errors, OLS provides Best Linear Unbiased Estimators (BLUE). Diagnostic checks were conducted to ensure the robustness and reliability of the estimated coefficients.

Finally, the empirical findings derived from regression analysis were integrated with descriptive statistical insights through methodological triangulation. This approach enhances the credibility of results by cross-validating quantitative evidence obtained from different analytical techniques, thereby strengthening the overall explanatory power of the study.

CURRENT TRENDS IN CHINESE OUTBOUND TOURISM

Since the beginning of 2023, China has implemented a series of measures to simplify entry procedures for foreign nationals for work, study, and tourism. These efforts have expanded the available channels for international visitors to enter China (Table 1).

Table 1

Main tourism indicators of China

By lowering visa barriers and implementing more flexible entry policies, China is successfully attracting a more diverse group of tourists – from Western countries and Russia, Southeast Asia, and, increasingly, countries outside its traditional sphere, such as Azerbaijan. This resulting diversification underscores China's growing appeal as a global tourist destination and demonstrates its commitment to developing deeper cultural, economic, and diplomatic ties through tourism.

The initial regression model was specified to analyze the relationship between tourism-related foreign exchange revenues and selected indicators of the tourism sector over the period 2005–2024. The model was estimated using the Ordinary Least Squares (OLS) technique within a multiple regression framework. The estimated econometric specification is expressed as follows:

The overall model demonstrates strong explanatory power, as indicated by an R-squared value of 0.7659 and an adjusted R-squared of 0.7219, suggesting that nearly 77% of the variation in tourism-related foreign exchange earnings is explained by the included regressors. Moreover, the joint significance of the explanatory variables is confirmed by an F-statistic of 17.44 with an associated p-value below the 1% significance threshold. These goodness-of-fit measures validate the adequacy of the model specification and support the relevance of the selected variables in capturing the structural drivers of tourism revenue generation.

Notwithstanding the overall robustness of the model, diagnostic testing reveals the presence of positive serial correlation in the residuals, indicating a potential violation of the classical OLS assumption of error independence. While this does not bias the estimated coefficients, it may reduce the efficiency of the estimators and affect the reliability of standard inference. Such behavior is common in time-series settings and suggests that future research could benefit from alternative specifications, including the incorporation of dynamic components or the application of econometric techniques that explicitly account for serial dependence. Despite this limitation, the estimated relationships remain economically meaningful and consistent with theoretical expectations as well as prior empirical evidence in the tourism economics literature.

Furthermore, the analysis convincingly demonstrates that the development of travel agencies is a significant factor in the growth of international tourism revenues during the study period, while other variables demonstrate weaker explanatory power. The results highlight the importance of investment in tourism infrastructure and services for maximizing foreign exchange earnings. The positive coefficient of the "number of delayed foreign arrivals" variable (65.0965) is particularly noteworthy, as it indicates that the number of tourist arrivals in the previous period has a significant lagged effect on current foreign exchange earnings.

The coefficient on the number of international trips is negative (-7.1736), which may seem counterintuitive at first glance, but may reflect the complex relationship between domestic outbound tourism and inbound tourism revenues. This finding requires careful interpretation and suggests that international trips by Azerbaijani residents may be related to capital outflows, partially offsetting the benefits of inbound tourism, or may indicate measurement issues. Nevertheless, the dominant positive effects of travel agency development and lagged foreigner arrivals remain the primary drivers of foreign exchange earnings, confirming that strengthening tourism services infrastructure and attracting international visitors are essential strategies for sustainable tourism development in Azerbaijan.

CHINESE TOURISM IN AZERBAIJAN: RECENT STATISTICS

China, one of the largest countries globally, shares a strong and mutually beneficial relationship with the Republic of Azerbaijan. Guided by the principles of fostering cooperation with all nations, Azerbaijan has developed close ties with China across various sectors. Diplomatic and cultural relations between the two nations have flourished since China recognized Azerbaijan's independence on December 27, 1991, followed by the establishment of formal diplomatic relations on April 2, 1992 [21] (Ministry of Foreign Affairs of Republic of Azerbaijan, 2025).

Azerbaijan stands as China’s primary trading partner in the South Caucasus region. The two countries engage in cooperation across a range of areas, including industry, agriculture, trade, tourism, information and communication technology (ICT), transportation and logistics, construction, and more [9] (Gabilzade, 2009) (Table 2).

Table 2

Classification of connections in the system of Azerbaijani-Chinese relations

Tourism, while the most recently integrated dimension of the Azerbaijani Chinese relationship, holds exceptional promise for both nations. These relations have developed rapidly thanks to strategic institutional, infrastructural, and commercial initiatives, demonstrating their key importance in the broader bilateral context.

Over the past ten years, tourism in Azerbaijan has become one of the fastest-growing and strategically important components of the country's non-resource economy (Table 3).

Table 3

Tourism statistics of Azerbaijan, 2024

Azerbaijan has taken significant strides toward sustainable tourism, solidifying its commitment through multiple high-impact initiatives like global standards, institutional engagement, eco‑friendly practices, climate action and etc.

These measures illustrate Azerbaijan’s holistic approach to sustainable tourism: aligning with global standards, fostering environmentally and socially responsible practices, and embedding climate resilience into its tourism sector.

The Azerbaijani tourism market has diversified significantly. While CIS and Gulf countries remain key source markets, travel from India, Europe, and newer regions is expanding ‑ for instance, tourist flows from India surged by up to 130 % year-on-year in early 2025.

Azerbaijan has strategically prioritized reaching broader tourism markets, with particular emphasis on China’s rapidly expanding outbound travel sector. This objective aligns with the country’s broader goal of economically diversifying beyond oil by capitalizing on its rich cultural heritage, natural landscapes, and growing connectivity.

The second regression model was estimated with Gross Income of Travel Agencies as the dependent variable, examining the influence of employment capacity, accommodation infrastructure, and market competition on travel agency revenues. The model incorporates four key explanatory variables: Number of Employees per Travel Agency, Number of Rooms per Unit, Number of Travel Agencies, and Total Number of Hotels. The estimated OLS regression equation is as follows:

The coefficient of the Number of Employees per Travel Agency is positive and statistically significant (β = 69.4801, t = 2.80), suggesting that an increase in employment directly contributes to higher gross income. Specifically, each additional employee increases agency income by approximately 69,500 manat. This result underlines the importance of workforce capacity in supporting the operational performance of travel agencies. The finding has significant implications for employment policy and skills development in Azerbaijan's tourism sector, highlighting that investments in training and workforce expansion can yield tangible economic returns through enhanced revenue generation and service delivery capabilities.

Similarly, the Number of Rooms per Unit has a positive and statistically significant impact (β = 9.9979, t = 2.74). An additional hotel room is associated with an increase of around 10,000 manat in agency gross income. This highlights the complementary role of accommodation capacity in boosting tourism revenues. As accommodation options expand, travel agencies benefit from increased booking opportunities, commission revenues, and package tour sales, demonstrating the symbiotic relationship between hotel infrastructure and travel agency operations.

In contrast, the Number of Travel Agencies shows a negative relationship with gross income (β = -220.0571, t = -1.85). Although marginally significant, the finding suggests that a growing number of agencies may intensify competition, thereby reducing average revenue per agency. This result reflects market dynamics where increased supply of service providers, without proportional demand growth, leads to market fragmentation and reduced profit margins for individual firms. The finding indicates that Azerbaijan's travel agency sector may be experiencing saturation effects, suggesting a need for quality-focused rather than quantity-focused industry growth strategies.

The Total Number of Hotels also exerts a negative and statistically significant effect on gross income (β = -275.6178, t = -2.21). This outcome may reflect the tendency of tourists to bypass travel agencies when more hotels are available, opting for direct bookings instead. The proliferation of hotels, particularly those with robust online booking capabilities, reduces the intermediary role of travel agencies and erodes their commission-based revenue streams. This finding highlights the challenges facing traditional tourism intermediaries in an increasingly digital marketplace where direct booking mechanisms replace conventional agency services.

The constant term is negative (-64,430.17), which has no direct interpretative meaning but ensures the proper fit of the regression line. Overall, the analysis reveals that human resources and accommodation infrastructure are critical positive drivers of gross income, while excessive competition and hotel proliferation may undermine the financial performance of travel agencies. These findings provide useful insights for policymakers and industry stakeholders, suggesting that sustainable tourism sector development requires balanced growth strategies that enhance service quality, promote differentiation among agencies, and support the digital transformation of traditional tourism intermediaries to remain competitive in evolving market conditions.

The number of tourists from China to Azerbaijan has been increasing in recent years. The number of arrivals from China to Azerbaijan in the period from January to April 2025 was 13,060. Compared with the same period in 2024, a change of 68% was recorded. The number of trips of Azerbaijani citizens to China in the period from January to March 2025 was 2986. The total number of tourists to China in 2024 was 10602 (Table 4) [31] (Tourism in Azerbaijan. Statistical yearbook, 2024).

Table 4

Tourists flow between Azerbaijan and China, 2020–2023

Their keen interest primarily centers on Azerbaijan’s historical and cultural landmarks, especially within cities like Baku, Gabala, and Sheki, where Icherisheher (Old City), the Maiden Tower, and the Palace of the Shirvanshahs remain particularly popular attractions (Table 5).

Table 5

Tourists flow between Azerbaijan and China, 2020–2023

To capitalize on this trend, Azerbaijan has adopted a multifaceted tourism development strategy. A key component is visa facilitation: as of July 20, 2024, Chinese passport holders enjoy a one-year visa-free regime, allowing for several short-term trips per year. Furthermore, direct flights, such as those between Baku and Beijing, launched in December 2023, have significantly increased travel convenience [39, 40] (Azerbaijan Tourism Authority, 2024). Furthermore, Azerbaijan actively participates in major tourism exhibitions and conducts roadshows in key Chinese cities, establishing partnerships with platforms like Trip.com and other industry players to increase visibility and strengthen its market position.

Opportunities span hotel development, tourism infrastructure, and service amenities, further supported by memoranda of understanding between Azerbaijani entities—such as Azerbaijan Airlines (AZAL), Azerbaijan Tourism Board (ATB) – and Chinese partners like Trip.com Group and China Tourism Group [5] (Azerbaijan Tourism Board, 2024). Currently, Azerbaijan operates direct flights to China twice a week. Direct flights are from Beijing (AZAL), and Urumchi (Southern Airlines) [4] (Azerbaijan Airlines, 2023).

On the ground, Azerbaijani travel agencies have proactively formalized cooperation with Chinese counterparts through partnership agreements, joint promotional campaigns, and B2B networking events. Such collaborations aim to facilitate seamless tour offerings and culturally tailored experiences for Chinese visitors. Collectively, these coordinated efforts—visa policy, air connectivity, marketing initiatives, investment engagement, and agency-to-agency collaboration—are driving a sustained upswing in Chinese tourist arrivals to Azerbaijan.

Development of the tourism industry in Azerbaijan regions is a prior task, particularly in the light of further development of international cooperation and bringing the industry in line with the global market economy realities. To achieve this goal, not just effective regulatory and economic methods should be applied but national policy for tourism should be brought into line with international best practices. To that aim, promotion of Azerbaijani Chinese tourism ties ranks among the most auspicious trends. Both countries are situated on the historic Silk Road, which provides a good cultural and historical ground for cooperation in tourism. In the meantime, Azerbaijan offers Chinese investors possibilities of favorable cooperation in hotel development, transport infrastructure, and tourist facilities. Ultimately, establishing Azerbaijan–China tourism relations can release hugely expanded two-way visit flows, enhance cultural exchanges, and enhance the living standards of local communities via the multiplier effects of tourism development [27, p. 49] (Tahir, Rafiq, 2021).

CONCLUSION

The Chinese tourism market's critical role in Azerbaijan's sustainable development of tourism is highlighted in the article.

Azerbaijan's adherence to sustainable principles – its adoption of ecotourism practices, commitment to supporting local communities and efforts to reduce the environmental impacts – are critical to optimizing the socio-economic sustainable gains of this bilateral relationship.

Moreover, with the tourism sector growing to become the backbone of Azerbaijan's non-oil economy, Chinese tourists will also be crucial to ensuring that expansion in the tourism sector is consistent with national sustainability goals and global best practices in sustainable tourism.

This study reaffirms that Chinese outbound travel is a strategic engine for Azerbaijan's sustainable tourism goals. Chinese visitation to Azerbaijan offers not only economic benefit, but also stewardship of the environment, conservation of cultures and empowerment of communities.

For the best realization of such a harmony, Azerbaijan needs to embrace the following strategic measures:

- establishing a "Ready for China" infrastructure;

- attracting environmental or eco-tourists from China;

- expanding the scale of promotion and teaching of Chinese in Azerbaijan;

- widely promoting Chinese culture;

- conducting sporting events;

- developing organizational ties in the sphere of tourism;

- improving transport connections, etc.

The empirical findings demonstrate that the development of travel agencies plays a crucial role in increasing foreign exchange earnings from international tourism. The multiple regression analysis, based on data from 2005–2024, shows that among the examined factors—number of travel agencies, number of overseas visitors, and number of foreigner arrivals—the number of travel agencies has the strongest and most significant positive impact on tourism-related foreign exchange revenue. Overall, the results highlight that strengthening the network and efficiency of travel agencies can substantially enhance international tourism income. In contrast, the effects of overseas visitors and foreign arrivals were found to be comparatively weaker. These findings emphasize the strategic importance of investing in tourism infrastructure and agency development to boost foreign exchange earnings.

The results show that employment and accommodation infrastructure are key drivers of revenue growth in the tourism sector, while overexpansion of agencies and hotels can have negative financial consequences. Therefore, a balanced approach focusing on workforce development and capacity optimization is essential for sustaining profitability in the travel industry.

Through these approaches, Azerbaijan can build an economically prosperous, environmentally conscious, and culturally enriching tourism system. With increasing Chinese outbound tourism, harmonizing sustainability into the core of bilateral collaboration will not only enhance destination appeal but also consolidate Azerbaijan as a role model for promoting sustainable tourism development – setting the foundation for long-term development aligned with both domestic and global sustainability goals.