Tourism

Diamond in the Rough

Tourism

The government is taking steps to entice more tourists to Kazakhstan by launching new incentives, exploring niche markets, and focusing its efforts on showcasing the country's appeal.

The aim of the new tourism program is to realize Kazakhstan’s full tourism potential with a realistic, pragmatic, and effective mindset, much in line with the country’s accelerated industrialization program. The implementation of the program is anticipated to trigger the development of the country’s regions, support and encourage SMEs, and create employment opportunities. Kazakhstan is looking to follow the examples of Malaysia and Turkey, countries that managed to develop their tourism offerings in a relatively short time. As an example, Turkey subsidizes up to 40% of capital costs for the construction of hotels. As for Malaysia, in 2011 the tourism industry employed 20% of the national workforce, catered to more than 26 million tourists, and generated $20 billion in revenue, making up 12.5% of the country’s GDP. In the same year, the domestic tourism industry in Kazakhstan provided services worth KZT74 billion ($308 million).

With a wealth of pristine natural sights, Kazakhstan has the potential to increase its tourism inflows. The country is located at the center of one of the fastest-growing tourism markets in the world. By 2020, it is projected that the country’s nearest neighbors—China, Russia, India, and the Middle East—will see an increase of annual outbound tourists, reaching 220 million people. The potential for Kazakhstan to benefit from this market will be dependent on implementing the right reforms, infrastructure development, and appropriate marketing.

Currently, 81% of foreigners entering the country are corporate travelers, while only 15.5% come for leisure. Of these leisure visitors, many are interested in Kazakhstan’s blossoming eco-tourism industry. The Kazakhstan Tourism Association has observed that although the share of eco-tourism is very small in the overall world market (10%), Kazakhstan has the potential to develop products suitable for a new and expanding consumer base.

Several key locations and services that rank high on Kazakhstan’s tourism development agenda include ski resorts near Almaty and leisure destinations in the Burabai and Shchuchinsk-Borovsky resort area. The development of seaside tourism in the Kenderli marine zone in the Mangistau region is drawing greater attention. Located on the Caspian coast, the project involves the construction of 23 hotels with a total bed capacity of 22,000. The project is set to create 15,000 jobs and host an estimated 500,000 visitors on an annual basis, mainly from Russia (50%), Kazakhstan (30%), and the Gulf, as well as from Europe.

Although the cost of transportation to the region remains a challenge for domestic tourists, the government has taken the initiative to make travel more accessible. Among the means to overcome this obstacle, which would increase the countries resorts’ competitive edge vis-í -vis Mediterranean and Asian destinations, grants and subsidies for domestic air transportation are on the table.

In order to increase the inflow of foreign tourists into the country, Kazakhstan is relaxing its visa regime for visitors. One of the main steps the authorities have taken in this direction is the implementation of a pilot visa-free regime for visits up to 15 days to the 34 member states of the Organization for Economic Cooperation and Development (OECD). The government’s other possible programs include the mutual recognition of visas between Kazakhstan, Russia, and Uzbekistan, as well as the development of the transport corridor connecting the key cities of the ancient Silk Road: Tashkent, Bukhara, Samarkand, Turkestan, Shymkent, and Almaty.

The country’s young capital, Astana, is becoming a more popular destination among foreigners. In 2011, more than 500,000 visitors were received in the city, registering a 20% increase compared to the 2010 figure. “Astana’s hospitality industry depends largely on international events and business travellers,” Cem Ciritçi, General Manager of the Ramada Plaza, told TBY. “MICE tourism is very important in Astana. We see low occupancy levels if there are no international events.”

The total value of the tourism market in the city has risen to $96 million. Meanwhile, outbound tourist traffic increased by 44% and reached 31,008 people in 2011. Kazakhstan’s largest city, Almaty, ranked as the largest source of outbound tourists, with close to 120,000 people from the city heading abroad for tourism purposes.

One niche Kazakhstan is exploring through the development of its strategy is medical tourism. The number of tourists travelling the globe in pursuit of medical treatment is more than 3 million annually, and the growth of this segment is well reflected in Kazakhstan as well. The number of Kazakhstanis travelling abroad for medical purposes is increasing, and the Czech Republic, Hungary, and Slovakia are positioned as destinations for spa tourism, in a segment that is increasingly popular among Kazakhstanis. In 2011, 300 patients from neighboring countries sought treatment at the facilities of National Medical Holding, which signed a memorandum on bilateral cooperation with Singapore’s The Group Health Parkway Hospitals in a wide range of fields including the development of medical tourism in Kazakhstan along the lines of Singapore’s experience. With a growing amount of increased coordination within the Kazakhstani government and increased cooperation between the country and its neighbors, the stream of outbound and inbound tourists may begin to surge.

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