Only 15% of tourists who visited Armenia in 2013 booked hotel rooms.

The rest either stayed with relatives or preferred to rent apartments. The reason for this is that most officially defined as “tourists” are actually former residents of Armenia who are now citizens of foreign countries.

Nevertheless, the hotel industry in Armenia has good prospects for growth.

It’s no accident that the number of hotels in Armenia has nearly doubled in the last seven years and that the number of hotels receiving international tourists has doubled in the past three years.

According to statistics of the RA Ministry of the Economy there are 175 hotels operating in Armenia today – 63 in Yerevan and 112 outside the capital providing 6,000 rooms and 11,000 beds.

Such numbers are inadequate in the peak tourist season, while the winter months bookings are only 20-25% of capacity. It’s this seasonal imbalance that primarily inhibits further sector growth.

80% of Armenia’s hotels are classified as small capacity economy lodgings. Many turn a profit merely by providing a room for romantic encounters. 77 of them (45%) also lodged international tourists in 2013, a marked increase over the 54 in the preceding year.

Competition in the hotel sector has slowly given way to improved quality – services have increased and so has the price to quality ratio. That’s to say higher prices mean better quality.

Top quality hotels are now being built in regional tourist hubs like Tzaghkadzorm Aghveran and Jermouk. Implementation of the tourism project in Tatev has led to growth and improvements in hotels in the adjacent town of Goris.

However, there’s still a lack of decent hotels in provincial capitals and many smaller towns in Armenia.

Several prominent international hotel chains are now building hotels in Armenia - Hyatt, Kempinski, Wyndham Hotel Group, InterContinental Hotels.

Besides hotels, Armenia also boasts some 150 resort homes, motels, hostels and spas, providing 3,000 rooms and 7,000 beds. There are also around 200 bed and breakfasts.

Only four of the country’s hotels are listed in the top 1,000 tax payers – Armenia Hotel Complex (1.4 billion AMD), Yerevan Hotel (521 million AMD), AviaTrans Hotel (120 million AMD), and Evropa Hotel (110 million AMD).

Hotel sector revenues amounted to US$44 million in 2013. While this is probably an artificially deflated figure, it’s a 10.7% increase over the preceding year.

Officially, the hotel industry comprises 1.8% of the services sector and 4% of Armenia’s GDP.