This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 2/12/2019

Overview

Table: Tourism Sector in Armenia; Unit Thousand U.S. Dollars

 2015201620172018 (Estimated)
Tour Operators Services28,18325,03831,36435,364
Hotel Services46,29147,83552,64255,113
Travel Exports935,800967,7001,120,2001,220,200
Travel Imports995,8001,067,2001,269,8001,369,800
Exchange Rates478480483485
Data Sources: National Statistic Service: Yearbook 2017, Social Economic Situation in Armenia 2017 January-December, and Central Bank of Armenia

While admittedly a niche tourism market, Armenia has not realized its full tourism potential. Most international visitors are either Diaspora Armenians or business travelers. That said, the number of visitors to Armenia increased for the last several years.  Services for tourists and travelers are reasonably good in Yerevan and developing in the rest of the country. According to the Ministry of Economic Development and Investments in 2017, around 1,494,779 people entered Armenia as tourists, an increase of 18.7% compared to 2016. The number of incoming tourist arrivals to Armenia in 2018 January-March comprised 683,759 or 14% growth for the same period in 2017.

According to 2018 World Travel Tourism Council Report, in Armenia:
  • The direct contribution of Travel & Tourism to GDP was $477.7 mlln, 4.4.% of GDP in 2017, and is forecast to rise by 8.5% in 2018.
  • The total contribution of Travel & Tourism to GDP was $1,720 million (15.7% of total GDP) in 2017 and is forecast to rise by 8.0% in 2018.
  • Travel & Tourism directly supported 44,500 jobs (3.9% of total employment) in 2017.  This is expected to rise by 2.9% in 2018.
  • Visitor exports generated $1,092.4mn, 29.2% of total exports in 2017.  This is forecast to grow by 9.2% in 2018.
  • Travel & Tourism investment in 2017 was 4.6% of total investment (USD108.9mn). It should rise by 6.2% in 2018.

However, according to the World Economic Forum’s Travel and Tourism Competitiveness Report 2017, Armenia was ranked 84th from 136 countries.  According to its assessement Armenia has a long way to go before it is competitive in the international tourism market; however, on the safety and security indicator Armenia ranked 34th and for the overall business tourism environment ranked 39th out of 136 countries. According to the report in 2017, the international inbound tourism recepits were $935.8 million ($785.1 average receipts per arrival).

Armenia has more than 700 possible tourist attractions - mostly ancient churches and monasteries - but the majority of them are underdeveloped and difficult to reach.  Stunning natural vistas and adventure tourism are a potential attraction throughout Armenia, but the lack of knowledge of English, international-standard hotels, restaurants and other services in the regions, as well as poor access deter many tourists. Limited and inconveniently-scheduled international flight connections also impede the development of the tourism industry. However, in late 2013 the Government of Armenia liberalized the civil aviation sector. This has already attracted new carriers and significantly increased the number of flights, while reducing prices on more competitive routes. Further improvements to the frequency and time-tables for flights are likely.

Leading Sub-Sectors

Armenia is a unique tourism destination with a rich and diverse cultural heritage that provides dynamic opportunities for developing tourism markets. The country features an abundant variety of cultural, natural, and historical sites, six UNESCO World Heritage sites, medieval monasteries, churches, and fortresses. Over 2,000 hospitality companies work in Armenia, including hotels, B&Bs, restaurants, transportation companies, tour operators, and travel agencies. Armenia’s key geographical markets are France, Germany, Russia, Iran, and the United States.

The State Tourism Committee of Armenia was established in 2016 as the policy making agency for tourism in Armenia. It has adopted a strategy for tourism promotion which highlights the different areas of tourism within Armenia including recreational, rural, spiritual, and cultural. Over the past five years, Armenia has seen considerable growth in its tourism sector as a result of a more focused government policy toward tourism development as well as through numerous private sector initiatives. In 2017, the government established the Armenian Tourism Development Foundation, which is the Government’s tourism programs implementing authority of Armenia.

In 2018 Smithsonian Folklife Festival’s landmark program featured Armenia: Creating Home, offering a glimpse into Armenian culture, greatly influenced by its surroundings, heritage, and ongoing exchange with its many Diasporas. It is anticipated the nearly 800,000 visitors to the Festival will be potential new tourist visitors to Armenia. 
The Tatev Revival Project implemented through a public-private partnership, between the Armenian Government and the Ruben Vardanian and Veronika Zonabend (RVVZ) Foundation is one of the key projects in the tourism sector. The Project includes restoration and preservation of the thousand year-old Tatev monastic complex and the establishment of infrastructure based on local community needs to enable tourism promotion.

Opportunities

Armenia still has several picturesque regions with quality tourist destinations that lack modern accommodations, restaurants, and services. The Government has developed investment master plans around strategic corridors.  Of special interest may be the scenic but underdeveloped (for tourism and travel) southern region of Syunik, boasting the Tatev monastery, and the Vayots Dzor region, just south of Yerevan. A large-scale revitalization project has been launched in Tatev. The opening of the world’s longest cable car which crosses the Vorotan River to the Tatev monastery has already boosted tourism in the region. However, the supply of quality, affordable accommodations is still lacking and presents a good niche for SME business.

The World Bank recently launched a 55 million USD “Local Economy and Infrastructure Development” Project to support the increased contribution of tourism to the local economies of selected regions. The project will take an integrated approach which will include infrastructure investment, urban regeneration, cultural heritage restoration, skills development, tourism product development and diversification, and attracting private sector investment. The project will help create and build tourism circuits that connect multiple sites in the selected regions called Corridors (Garni- Geghard- Khor Virap-Areni- Jermuk- Sisian- Tatev- Goris- Meghri), which crosses four regions (Kotayk, Ararat, Vayots Dzor and Syunik) combining several scenic cultural and natural attractions; traditional farms, mountains including Mount Ararat; carpet production; wine tourism; and traditional cuisine.  Two World Heritage Sites in the Northern Corridor, Haghpat and Sanahin, will also be restored and developed.

Well-known western franchises, particularly restaurants, are in demand in Armenia and the sector is showing signs of growth. Although the only current U.S. food franchises in Armenia are Cinnabon, Pizza Hut, Burger King, Tutti Frutti, and KFC, new pizzerias, restaurants, and sandwich bars have been appearing every month. High-priced restaurants serving foreign cuisine are also finding success in niche markets. The restaurant business is an attractive investment and partnership opportunity for U.S. firms. There are several major hotel chains operating in Armenia such as Marriott, Hyatt, Radisson, Hilton, and Best Western. 

Franchise offers from well-known American chains are likely to attract substantial interest, both from customers and from local investors. 

Web Resources

Ministry of Economic Development and Investments of the Republic of Armenia
Development Foundation of Armenia
Armenia Official Tourist Website
American Chamber of Commerce in Armenia
Spyur Information System
Armenian Directory
World Bank – Local Economy and Infrastructure Development Project
World Travel & Tourism Council
Travel & tourism economic impact 2018 armenia
World Economic Forum’s Travel and Tourism Competitiveness Report 2017
Invest in Armenia
Business Armenia

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