Tourism financing in Armenia

In 2023 1 billion drams (almost $2.6 million) was allocated from the state budget for the development and promotion of the tourism sector in Armenia, which is five times more than the amount provided in previous years. At the end of last year, a schedule and an estimate of expenses were also approved.

In response to a JAMnews request sent to the Ministry of Economy about how exactly the amount intended for the development of tourism will be spent, and whether the opinions of interested parties were taken into account when making decisions, the following response was received:

“When developing the program for 2023, the results of assistance programs implemented in the industry in recent years, the needs of the sector identified as a result of research and assessments of the current situation, as well as the results of consultations with beneficiaries were taken into account.”

But travel companies and tourism industry experts were not aware of them. They did not receive invitations to discuss from government agencies.

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“I don’t know how the allocated amount will be spent. I know that the country has accepted applications for participation in various international exhibitions. Many organizations have already visited these exhibitions, but this was also the case in previous years.

In the past, cooperation and communication with the tourism committee was closer than it is now. Even if very important sectoral issues are adopted, we are not informed at all now. As a result, only after the fact we learn about the adoption of some decisions,” Gevorg Gasparyan, head of the Armenian Federation of Travelers and founder of the Arevi Hotel, said.

However, he welcomes the fact that the government has decided to pay more attention to the tourism sector:

“This is a fantastic and unheard of amount for Armenian tourism. Finally, the government invests in an industry that actually has a large impact on the country’s GDP. I’m glad the ice has broken. Before this decision, we were 10 times behind neighboring countries in terms of investment in tourism, now this gap is narrowing.”

Tour guide and expert Yasha Solomonyan shares the point of view of their colleague:

“As someone who has been working in tourism for more than 10 years, I am certainly glad that the state is finally starting to pay more attention to the field.”

He believes that, taking into account the opinions and advice of industry stakeholders, government agencies will be able to carry out reforms more effectively:

“Otherwise, representatives of the sphere have to act as critics of the programs being implemented. While we are ready to be advisers, consultants. The fact is that we learn a lot after the fact, and when something has already been done, there is nothing to advise, it remains only to criticize.

An expert in the field of tourism, the founder of the tourism project Like local Gevorg Babayan also did not know the details of how the allocated amount would be spent. But he is aware that the tourism committee should organize events in different countries to make Armenia more recognizable. He knows about this, since he was also offered to take part in organizing one of these events, but refused:

“In the course of discussions with colleagues, we realized that it would be impossible to implement our ideas, since the amount allocated for these activities is not enough. And we decided not to participate just for the sake of the bird, as it is also a matter of our reputation.”

Despite the fact that the work plan has already been approved within the framework of the amount allocated from the budget, specialists working in the field suggest that the tourism committee take into account their wishes. They also look forward to the possibility of more active participation in projects and effective cooperation in the future.

Yasha Solomonyan, tourism expert: “I would like the amount allocated from the state budget to be spent, first of all, on improving the sphere, on reforms, on improving professionalism. I hope that the costs will be targeted, especially in terms of marketing and the choice of markets that can provide an influx of solvent tourists with high incomes.”

Gevorg Gasparyan, founder of the Arevi Hotel: “I really hope that as a result of investments in the country’s marketing, a large tourist flow will be provided. When developing any product, I advise you to take into account the opinion of organizations operating in the field. We have many experts with extensive experience who will help to achieve more tangible results.”

Gevorg Babayan, founder of the tourism project Like local: “I have always talked about the need to take the demographic picture of tourism seriously. Young, innovative, highly traveled and open-minded people need to be encouraged to participate in the tourism industry. It is necessary to work on attracting more young tourists who are active and connected with social media. By sharing their every move on social media, they advertise the tourist spots they visit.

We need to create new products and services that attract young people. We need to understand what are the global trends in tourism and what young people expect from us.”

Gevorg Babayan connects the gaps in various industry programs and decisions not only with insufficient coordination of the work of the committee with existing tourism organizations, but deeper problems:

“We don’t have a tourism development strategy, we don’t have a concept, we don’t know where we are going, but branding has been launched. It is clear that it was necessary to use something as a logo. But branding something that doesn’t exist yet and using the fifteen-year-old phrase “The hidden track” (hidden route) is illogical. Approaches in tourism change from time to time, and we still say “The hidden track”.

We need to keep abreast of world tourism, people employed in this area must travel several times a year. This should become a mandatory to keep up with trends.”

Expenditures will be made in three main areas:

1. Increasing the awareness of Armenia and the Armenian tourism product, conducting a more active marketing policy in the target tourism markets.
2. Development of tourism in the regions, restoration of local traditions, diversification of tourism products, formation of new tourist routes, dissemination of information about them in the international and domestic markets.
3. Improving the statistical and information system of the tourism sector.

More than half of the amount allocated from the budget, 528 million drams (about $1.4 million), is earmarked for marketing:

• participation in 4 international exhibitions,

• acquisition of marketing services of 4 international airlines,

• publication of 9 promotional articles about Armenia in prestigious international publications,

• organization of advertising campaigns in 3 target countries,

• organization of 6 international study tours.

280 million drams ($725 thousand) are planned to be spent on diversification, “packaging” and promotion of the Armenian tourism product.

63 million drams ($163,000) were allocated for the development of infrastructure and advanced training, and the organization of courses for employees employed in tourism.

The authorities will also spend 120 million drams ($310 thousand) on organizing events to ensure international cooperation.