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Kazakhstan 2015 | TOURISM & RETAIL | REVIEW: TOURISM

The Kazakhstani tourism sector holds much promise, and with the prospect of the Astana 2017 Expo on the horizon, will soon receive the attention it deserves.

With a range of possibilities open to the industry, the Kazakhstani tourism sector has the potential to grow considerably in the coming years. Though for centuries playing host to the countless caravans of Silk Road traders traversing its lands, recent decades have seen considerably less traffic. However, in recent years visitors have begun to arrive in higher numbers than before, with Kazakhstan's role as a regional trading hub being asserted once again. The government has enacted several plans with a view to maximizing the contribution of the sector to the national economy, and is hoping that major events such as the 2017 World Expo will go some way to drawing in tourists for both business and pleasure.

VITAL STATISTICS

Overall, the travel and tourism sector contributed 5.3% to total GDP in 2013, with KZT1,748 billion generated by the industry over the course of the year. This figure was estimated to rise by just under 4% in 2014, with annual increments of around 4.8% expected over the coming decade. The administration's goal is for the sector to contribute KZT2,914.5 billion to GDP by 2024. Travel and tourism services provided 137,500 jobs in 2013, with this number set to grow by 2.2% in 2014. Jobs indirectly supported by the industry represent 5% of total employment in the country, with around 420,000 citizens holding such positions in 2014. The number of travel and tourism jobs is planned to expand to over 470,000 by 2024.

THE PITCH

Such a large country naturally contains a wealth of diversity across its expansive terrain. To the north lies Astana, the country's capital, which is situated among the frozen steppes of the area. The central highlands comprise a significant portion of the state, while to the south stretch vast deserts along the border with Uzbekistan. The country is home to several UNESCO sites, such as the Mausoleum of Khoja Ahmed Yasawi in the southern city of Turkestan, or the Chang'an-Tianshan Corridor which served as a key section of the storied Silk Road. Elsewhere, the Saryarka Steppe and adjoining lake system and wetlands offer visitors glimpses of numerous migrating bird species, but also provide refuge to critically endangered creatures such as the saiga, a type of antelope now unique to Central Asia and one region in Russia. Another World Heritage Site identified by the international agency is at Temgaly, a location just over 100km from Almaty. The petroglyphs scattered around the ruins there belie the ultramodern appearance of Kazakhstan's largest city, proving that the surrounding area has been settled since the Bronze Age.

Almaty remains the commercial focus of the country, and is accordingly listed in the Global Financial Centres Index (GFCI). It ranked 58th out of 83 international finance hubs as of early 2014. The country's stock exchange and the largest banks in the region are based here, explaining much of the business tourism in the city. With a population of around 1.5 million, Almaty also stands out as Kazakhstan's cultural capital, boasting the Abay National Theatre and Opera House and the National Museum. Although it lost diplomatic and administrative primacy to Astana in the late 1990s, the city is crucially important to the national identity and economy, and contributes approximately one fifth of the country's GDP. Almaty is presently bidding to host the 2022 Winter Olympics. The city's airport serves the entire region, with a full 4 million passengers passing through its terminals annually, and 50,000 flights serviced each year.

Astana has been designated as a World City by UNESCO, and serves as the capital and venue for diplomatic and international events. In this capacity, it will play host to the 2017 World Expo, an event which could transform the country's tourism sector. Major changes are underway, with new structures planned for completion by June 2017, the beginning of the event. The Abu Dhabi Plaza will become the tallest skyscraper in the region, overtaking the Emerald Towers 1 building, which is also located in Astana. Facilities for the Expo itself began in mid-2014, and the event will play host to displays from 20 domestic companies and dozens of international firms. Approximately 5 million visitors are expected to attend over the course of the three-month event. Astana received approximately 650,000 tourists in 2014, managed by the almost 300 tour operators in the city.


PRETTY VACANT

In anticipation of 2017, the number of hotel rooms and available beds has been consistently increasing. Despite having a population of less than one million, considerably smaller than Almaty, Astana had a hotel bed capacity of 10,176 in 3Q2014, having risen from 9,045 at the beginning of the same year, and just over 7,611 in early 2012. Occupancy rates remain low at 24.3%, lower than the national average of 27.8%. Almaty has exhibited a different trend, with its 11,599 beds in the latter half of 2014 dropping from a peak of 13,224 in 2012. Occupancy rates have also fluctuated there, standing at 26.1% in late 2014. The volume of international arrivals to Kazakhstan continues to rise, with 4.98 million air passengers recorded over the course of 2013.

It is hoped that the Expo, despite its “Future Energy" theme, will have a strong effect on the sector. Kazakhstan requires a comprehensive improvement of its international image in order to compete effectively with its neighbors. Both Kyrgyzstan and Uzbekistan have comparatively profitable tourism sectors, with the accessibility of spectacular mountain ranges in the former and the rich history of the latter attracting relatively high numbers of visitors. The vast majority of visitors to Kazakhstan are citizens of CIS states, specifically Russia, Kyrgyzstan, and Uzbekistan, with far lower numbers of tourists and other travelers arriving from China, Germany, the UK, and Turkey. A branding project would go some way to rectifying this problem, but the underlying issue of a traditional lack of investment in tourism infrastructure is only beginning to be reversed. Investment in 2013 stood at KZT370.8 billion or 5.2% of total investment. This figure rose by 2.8% in 2014, and per annum growth of 5.7% over the coming decade to reach a goal of KZT661 billion in 2024, or 5.2% of total GDP in that year, is predicted.

Fortunately, the administration is acutely aware of such challenges, and has set out a wide-ranging solution set to deal with them, as presented at the 2013 Astana Economic Forum. The diversity of the country's touristic offering can also be seen as an obstacle to effective branding. As a result, one of the first pillars of the government's plan is to focus on selected niche areas and to create more robust attractions. The Caspian region has been chosen for a major overhaul, and the remnants of the Silk Road are to be developed into a cultural tourism route in the south of the country. This strategy fits in with another key element of the plan, which is to use marketing and advertising funding efficiently. Additional key areas of focus include training up to 100 executives for jobs in the sector each year, in order to guarantee preparedness for the expected expansion of the sector, and the signing of new agreements and partnerships with public and private entities abroad. With the boost offered by the 2017 Expo, the Kazakhstani tourism sector is on course to play a substantial role in the country's future economy.

Oksana Serebrennikova
OKSANA SEREBRENNIKOVA
General Director, BCD Travel/International Travel Plus
An important business line is MICE. We have several events here in Kazakhstan, and also have demand for events abroad. The MICE segment in Kazakhstan has remarkable growth potential: people are always looking for new destinations, and frankly speaking, the business community is tired of visiting the same countries, such as Egypt or Italy. They want to travel to new destinations; they want new experiences, which is why I am pleased that the tourism infrastructure is developing in Kazakhstan.