2. TOURIST GENERATING REGIONS
3. ARMENIA AS A TOURIST DESTINATION REGION
4. TRANSIT ROUTES
5. SWOT ANALYSIS
6. POLICY ADVICE FOR ARMENIAN GOVERNMENT
Before an in depth study of the Armenian tourism industry can be conducted, it is useful to define a framework for tourism which can be used as a guideline for this paper. This essay will mainly use a traditional framework set out by Nell Leiper in his 1979 paper “The Framework of Tourism”.
Leiper brings tourism down to three major elements:
- a human element, the tourist, the actor of tourism;
- a physical element, the space in which the action takes place; and
- a temporal element, time.
The human element defines what can be understood by the term tourist. Leiper (1979) lays out the main characteristics of the tourist as follows
- The act of the tourist includes:
- a dynamic element, the journey, which has a given purpose and travel distance; and
- a static element, the stay, which has a given duration that takes at least 24 hours.
- The tourist makes voluntary use of time and money.
- The tourist is a net consumer of economic resources within the region visited.
- Tourists make tours which means they always return to the point of origin.
This definition includes both people traveling for leisure purposes as people travelling for business or family purposes, as long as these last two are not committed on a regular basis. Salesmen travelling on a regular basis and seasonal workers can of course not be considered tourists. A salesman doesn’t spend his time voluntary and a seasonal worker violates the “net consumer” characteristic. (Leiper, 1979)
Abbildung in dieser Leseprobe nicht enthalten
The physical element can be seen geographically as depicted in figure 1. There are the tourist generating regions which form the basic market for tourism and are a source of potential demand; the tourist destination regions; and the transit routes through which the tourist travels to get to their destination. (Leiper, 1979) It is in this framework that push and pull factors for tourism should be seen. Together with the different actors in the tourism industry this geographical context forms the physical element of tourism. It is this physical element that will be studied for Armenia in the remaining part of this paper, mainly from a European point of view.
Armenia is receiving its tourists mainly from neighbouring countries Iran and Georgia, as well as Russia where many Armenians live in diaspora. As many Armenians live in diaspora, spread all over the world, there is a large potential for possible new markets in these countries.
Other possible new markets can be found in European countries. The main burden to overcome in these markets is ignorance. When a Belgian tells her friends and family that she is travelling to Armenia for holidays the first reaction is almost always “Why Armenia?” And indeed why would someone want to spend their holidays in Armenia? Most people in Belgium only know this country from the Eurovision Song Contest or from football. They don’t really know anything about the country itself, most people don’t even know where in the world exactly to situate the country. So it may not sound very surprising that Armenia is not top of mind when Europeans think on their next possible holiday destination. It is not even a country they will consider going to. And even when people know where the country is located, it is not uncommon that there exists a fear for the safety of the traveller. A fear triggered by the presence of different conflict regions close to Armenia like Syria and Iraq. This while Armenia itself is actually a very safe place to be and is far from a Muslim country like most people would think. If the Armenian government wants to get European tourists coming to Armenia, they will need to get Armenia into the consideration set or at least into the awareness set of European consumers.
This might be the right time to introduce the decision making process for travel destinations. Most literature on consumer decision making states that consumers divide all possible brands for an item into different choice sets. In the traditional marketing literature the most important sets are the awareness set and the evoked or consideration set from which the actual choice is being made. Decrop (2010) defines a slightly more complex decision making process for the destination decision. His model for destination decision making by consumers is depicted in figure 2.
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Figure 2, taken from Decrop (2010)
People should first off all be aware of Armenia as a tourist destination. As already explained this is not really the case for most Europeans. In a first stage marketing efforts should mainly focus on this, but getting into the awareness set is not enough. In a second stage the destinations where the consumer is aware off are being evaluated. The positively evaluated destinations end up in the evoked set, these are the destinations that will be considered for a possible next trip. The negatively evaluated destinations will end up in the exclusion set, they will not be considered. Between those extremes there is the surrogate set which can be understood as the “maybe” group, these destinations are not really considered at this time, nor definitively excluded. At the time of decision making different constraints (financial, family, weather, temporal, health ... constraints) influence the actual decision. The considered destinations in the evoked set are again categorized into three groups. The dream set is formed by the destinations that are unreachable for the consumer because of the constraints and they will be unreachable almost permanently. Some destinations in the evoked set will become unavailable at the time of actual decision because of a temporarily constraint. The considered destinations that are not influenced by the constraints end up in the available set, which can lead to the actual destination choice. However, it is possible that the available set is empty or that the decision maker becomes aware of an opportunity he never thought of before. Because of the existence of multiple choice sets marketing efforts shouldn’t only focus on awareness and evoked choice sets as is done in traditional marketing. The Armenian government and Armenian tour operators should be both creating desire for Armenia as a tourist destination as making Armenia accessible. Accessible not only meaning physical accessible (this will be discussed in the last part of this paper), but also falling within the constraints of the tourist. Once Armenia is in the evoked set, marketing efforts have to prevent it from ending up in the dream or unavailable set. But even when Armenia is not in the actual evoked set, it is still possible that it will be chosen as the holiday destination if the consumer gets the right opportunity offer at the right time. (Decrop, 2010)
Push factors in the originating countries also play an important role in creating potential demand for tourism. These factors are mostly emotional and personal in nature. Factors like income, mobility, health conditions, education, previous travel experiences, reference groups, etc. also play a role in stimulating tourism. Most of these push factors are outside the control of the destination regions, so not worth analysing in more depth for this paper.
To attract tourists from the tourist generating regions towards Armenia, a profound country marketing policy is needed. Such a policy could include the use of mass media like appearances in TV shows, TV series and major film productions, systematically informing the international press about major events that might attract tourists, presence on international travel fairs, good relationship between the government and the international travel industry, creating a platform for the tourist to find touristic information, ... (De Brabander & Gijsbrechts, 1990). The government should also aim to support all private initiatives that stimulate tourism towards Armenia, like the “Visit Armenia, It is beautiful” initiative. This project was started by a tourist living in California who visited Armenia once and wants to promote Armenia abroad as a very nice place to spend your holidays (Visit Armenia, 2006). This is a classic example of a tourist sharing her experiences with others and so stimulating others to start dreaming about their next holiday destination.
Armenia has a lot to offer for tourists. The country is rich in cultural heritage with almost one historical monument in every square meter, many beautiful monasteries, multiple UNESCO sites, wonderful nature and landscapes, the lake Sevan which is the second highest lake in the world, etc. (Ministry of Economy of the Republic of Armenia, 2015) The best time to come and enjoy all this splendour is from April till June or from September till October when the weather conditions are best. During these months the temperatures are bearable, with a daily average between 12.9°C and 22.0°C for Yerevan, while July and August can be very hot and winters very cold. There is not much rainfall, only 277 mm a year and a lot of sunny days. This makes Armenia perfectly suitable as a tourist destination, not only in summer but also in winter. After all, Armenia has its own ski resorts, which house the longest cable car in the world "Wings of Tataev" (Ministry of Economy of the Republic of Armenia, 2015). The largest ski resort in Armenia is located in Tsakhadzor where six ski lifts give access to 27 km of slopes (Skiresort Service International GmbH, 2015). With still some space available for expansion, Tsakhadzor could possibly become a worthy competitor for the overcrowded European ski resorts in the near future. For now 27 km seems to be on the low side compared with most European resorts, certainly when we take travel time and travel cost into account. This example shows the need for investments in tourism infrastructure. The government has already set up several tourism development programs which turn out to be successful (Ministry of Economy of the Republic of Armenia, 2015). Good examples include the Tatev Tourism Centre Development Program (Tatev Gateway, 2015) and the Tsakhadzor City Development Strategy (Tsakhkadzor
Municipality, 2015). Such projects certainly offer further opportunities and should therefore be supported.
In the introduction of this paper, emphasis was put on the fact that tourism always includes an overnight stay. This means that the destination region needs proper tourist accommodation. This can vary from guesthouses to five star hotels. In 2014, the republic of Armenia counted 268 hotels offering 14,418 beds. In 2005 these numbers amounted only 76 hotels and 6,873 beds. This is an increase of 253% and 110% respectively. (National Statistical Service of the Republic of Armenia, 2015) These figures show that already a lot of investment in infrastructure for the tourism industry has been made in recent years. The number of hotels rises faster than the number of beds, which shows that the investments are not only done in big hotels, but also in small B&B’s which are more affordable in price and are also necessary because they attract a different kind of public. Differentiating into different forms of tourism is important. Most tourists come to Armenia for cultural-historical or recreational tourism, but other forms of tourism like winter sports, eco- and agro tourism exist as well (Ministry of Economy of the Republic of Armenia, 2015). The more Armenia has to offer, the higher the chance that a potential tourist will find his pleasure.
One of the problems European tourists will face in Armenia is the lack of English language skills of most hospitality industry employees. The big hotels and restaurants in more touristic areas of the country will probably be able to serve the tourist in English, but elsewhere there is most of the time maximum one employee that speaks English fluent enough to help out the tourist. As the second language in Armenia is Russian, Russian speaking tourists will not face any language barriers.
Europeans might face language difficulties, but they can enter the country easily as no visa is required for travellers living in the Schengen zone or an EU member state. The Armenian government has been working on different institutional measures to facilitate tourism. This doesn’t only include the unilateral agreement with the European Union, but also the broader process for obtaining visa. Travellers can obtain their visa via different channels: the diplomatic representation of Armenia in their home country, at the airport and even online. (Ministry of Economy of the Republic of Armenia, 2015)
Transit routes function as the gateways to the tourist destination region. Transit routes or regions are important because they contribute to the accessibility of the destination region, and therefore to its attractiveness. Airlines play a considerable role in this field and should be studied in debt.
The following table gives the reader an overview of all destinations served out of Armenia’s main airport, Yerevan Zvartnots International Airport (EVN). These cities should be seen as both originating and transit cities for Armenian tourism.
Abbildung in dieser Leseprobe nicht enthalten
(1) Service ended on September 1, 2015
(2) Operates only in high season (July/August)
(3) Does not include non-scheduled flights in high season.
(4) In winter PS operates 4x / week with Embraer 190/195, 3x / week with Boeing 737-800.
(5) Service ended on September 12, 2015.
(6) Starting from summer 2016, Austrian will only fly 5 times a week.
(7) LOT will be serving Yerevan starting from January 2, 2016
(8) Frequency lowered to 2x a week in summer 2016.
(*) Transaero Airlines was declared bankrupt on October 1, 2015. Operations will be ceased on December 15. (Transaero Airlines, 2015a, 2015b)
Yerevan Zvartnots International Airport is served by 25 airlines, which directly connect Armenia with 34 cities. A look on the tables above immediately show the limited number of flights coming in from European origins in contrast with the strong representation of Russian and former USSR cities. This may explain why most tourists in Armenia come from Russia and neighbouring countries. A second important conclusion that can be drawn from the tables is the restricted competition on most routes. Most of the cities in the table are only connected with Yerevan by one airline. This with the exception of Moscow, Teheran and Rostov, which are served by at least two airlines. The strongest competition can be found on the route between Moscow Domodedovo and Yerevan where four airlines operate (including the now bankrupt Transaero Airlines). A route with this number of carriers could be considered as highly competitive in comparison with European routes. The question than is, why is there a low competition on all other routes? The answer can be found in a low demand for certain routes, but it is more straight forward to look at the absence of a local carrier. Armenia has its own flag carrier like most other countries, nevertheless this carrier is no longer operating. Operations of Air Armenia where ceased after the spreading of rumours that the airline would lose its rights to operate flights between Armenia and Russia. As a consequence of these rumours, customers and business partners started to lose their confidence in the company. Sales dropped and Air Armenia came into financial difficulties. In addition to this problems, Air Armenia had to place one of its two A320s under maintenance resulting in operational problems and again a significant drop in sales. Actions of financial reconstruction where taken, but the airline had to cease operations to gain more time to find additional financial resources. (Air Armenia, 2014) It is proven that having a national airline contributes to the national economy. Therefore the Armenian government should see it as a priority to assist in a relaunch of Air Armenia or in establishing a new national airline in corporation with the private sector. Possible partners could probably be found in one of the major European airline groups or in the gulf carriers (Qatar, Emirates, and Etihad).
It is important to see the network behind each of the cities served from Yerevan. However, the value of those networks defer. Some airports play a more important role than others. The main transit airports for Armenia as a tourist destination could be considered to be the following ones:
- Kiev (daily flights)
- Moscow, Domodedovo (up to 7 flights on a day)
- Moscow, Vnukovo (up to 2 flights on a day)
- Paris, Charles de Gaulle (4 times a week)
- Vienna (daily flights)
These airports give access to the network of Europe’s largest airlines (Aeroflot, Air France- KLM, Lufthansa Group) and their codeshare partners. Looking to the table with codeshare agreements, it becomes clear that most Europeans will have to travel via Moscow, Paris or Vienna as most agreements exist between European airlines. Paris, Vienna and Moscow also directly connect Yerevan with the United States. When the government wants to attract new airlines, it is important that they put emphasis on the value of Yerevan inside the potential entrant’s network. A route doesn’t need to be profitable on a stand-alone basis, as long as it puts value to the network it will be profitable for the airline to exploit it.
Having more airlines flying to Yerevan also contributes to the marketing function of transit routes. Airlines do marketing for their destinations. In fact the most effective way for airlines for doing marketing is by creating or stimulating general demand for air transport. In this sense it becomes clear why having a national airline is so important for stimulating tourism. A national carrier is the ideal channel for country/city marketing. The flag carrier represents the nation, it acts like an ambassador of its home country in the cities it is serving. A lot of flag carriers serve their customers national products on board their flights, for example Swiss and Brussels Airlines welcome their Business Class passengers with small chocolates. Brussels Airlines also serves quality dishes prepared by Belgian top-chefs with Belgian products to their Business customers. Airlines also have in-flight magazines which most of the time include tourist articles of the destinations they serve, with special attention to the tourist regions in their home country in every edition of the magazine. Next to the in-flight marketing, airlines also do marketing in the served destinations itself. They make commercials which are broadcasted on TV, their advertisements appear in newspapers, travel magazines and on the streets. This marketing is used to create demand for the airline, but also for its home country. This is exactly what Armenia needs.
Next to the analysis of the airline network access of Yerevan, it is worth looking at air taxes and compare Yerevan with other airports in the region. Such an analysis is shown in the table below.
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As can be seen from the table the airport taxes for Yerevan are the highest among the neighbouring countries. (Only the capitals are compared to have a meaningful comparison.) Air travellers have to pay a total of €40.84 when travelling via Yerevan. This high amount of taxes makes Yerevan less attractive for airlines to fly to. When airlines communicate prices with customers, they are obliged to use net prices, including all charges and taxes to be paid. This means that the price appears to be much higher to the customer than the actual fare the airline is charging for the flight. Which results in a higher price for the customer, and lower revenues for the airline. Spanish research demonstrates that higher airport charges have a significant impact on net airfares and demand (Sainz-González, Núnez-Sánchez, & Coto-Millán, 2011). The Armenian government could possibly stimulate air traffic by lowering the charges.
- Rich cultural heritage
- Presence of multiple UNESCO sites
- High monument density
- Beautiful nature and mountain landscapes
- Warm and dry climate, good weather conditions
- No overcrowded touristic areas
- Ski resorts with modern infrastructure
- Differentiated offer for tourists
- No visa required for EU citizens and strong facilitation for visa processing for other nationalities
- Modern airport facilities Weaknesses
- Infrastructure for tourism not yet to the level of competing tourist destination regions
- Below average English language skills in the hospitality industry
- No active Armenian air carrier
- Highest airport taxes in the region
- Armenian people living in diaspora as a potential market for tourism
- Growing European market for tourism
- Saturated traditional European tourist destination regions
- Overcrowded European ski resorts resulting in a high willingness to travel further for a new kind of winter sports experience
- Armenia still not very known as a tourist destination region in the European market
- Proximity to conflict zones Syria and Iraq
- Dominance of air routes by Aeroflot
- Limited competition on most air routes
- Limited air connections with Europe, none with other regions
To conclude this paper, some policy advice for the Armenian government can be given:
- Setting up a city/country marketing strategy focussing on creating desire as well as accessibility in terms of fitting in the constraints of the target consumers.
- Supporting private initiatives that stimulate tourism.
- Additional investment in tourist infrastructure in corporation with the private sector.
- Further exploitation of the state tourism development programs.
- Setting up training programs for employees of the tourism and hospitality sector with the aim to achieve a service level comparable to western standards and to improve language skills.
- Reestablishment of a full Armenian air carrier to increase competition on air routes to/from Armenia and to use it as a city/country marketing channel.
- Attracting new air routes to/from Europe, doing so by focusing on the network value of Yerevan for possible market entrants.
- Lowering total charges to be paid by air passengers.
Air Armenia. (2014). Message from "Air Armenia". Retrieved October 4, 2015, from http://www.air.am/en/news/news/message-from-air-armenia/46/
De Brabander, G. L., & Gijsbrechts, E. (1990). City marketing, van promotie tot plan? Een verkennend overzicht van een nieuw gebied: Antwerpen, SESO.
Decrop, A. (2010). DESTINATION CHOICE SETS: An Inductive Longitudinal Approach. Annals of Tourism Research, 37(1), 93-115. doi: http://dx.doi.org/10.1016/i.annals.2009.08.002
Leiper, N. (1979). The framework of tourism. Towards a definition of tourism, tourist, and the tourist industry. Annals of Tourism Research, 6, 390-407. doi: 10.1016/0160- 7383(79)90003-3
Ministry of Economy of the Republic of Armenia. (2015). Tourism in Armenia. Paper presented at the Summer School Emerging Market Economies, Yerevan State University.
National Statistical Service of the Republic of Armenia. (2015). ArmStatBank. Retrieved October 6, 2015 http://armstatbank.am/
Sainz-González, R., Núnez-Sánchez, R., & Coto-Millán, P. (2011). The impact of airport fees on fares for the leisure air travel market: The case of Spain. Journal of Air Transport Management, 17(3), 158-162. doi:
Skiresort Service International GmbH. (2015). Ski resorts Armenia. Retrieved October 21, 2015, from http://www.skiresort.info/ski-resorts/asia/armenia/
Tatev Gateway. (2015). TaTever - Wings of Tatev. Retrieved October 21, 2015, from https://www.tatever.am/en
Transaero Airlines. (2015a). Information for passengers-holders of Transaero Airlines' tickets. Retrieved October 4, 2015, from http://transaero.ru/en/2015-10-02/
Transaero Airlines. (2015b). Statement of Transaero Airlines. Retrieved October 4, 2015, from http://transaero.ru/en/2015-10-01/
Tsakhkadzor Municipality. (2015). Your peaceful and memorable vacation in Tsakhkadzor. Retrieved October 21, 2015, from http://tsakhkadzor.am/en/
Visit Armenia. (2006). Visit Armenia, It is beautiful. Retrieved October 21, 2015, from http://visitarmenia.org/
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