Kazakhstan 2017 | TOURISM & RETAIL | REVIEW

Though small, Kazakhstan's tourism sector is developing rapidly thanks to improved government policy and rapid development that has seen the nation's key cities become regional hubs.


The Kazakh tourism industry has no shortage of challenges. Often in the shadow of its neighbors, Kazakhstan is frequently overlooked by Western tourists looking for new destinations. Still, there are signs that this is changing; Kazakhstan is in the midst of an effort to boost tourism by increasing awareness of what the world's largest landlocked country has to offer the global community. The government has pledged to invest USD10 billion toward developing its tourism sector by 2020, increasing services offered and constructing a more robust tourist infrastructure in both urban and rural areas. Kazakhstan has a wealth of architecture and natural wonders to offer outsiders. The mission is to let the world see what Kazakhstan has to offer, thus bringing in new sources of foreign investment and elevating the nation's position in the world.


Tourism accounted for just 1.7% of Kazakhstan's GDP in 2014, one of the lowest rates in the world. However, the industry's long-term prospects are looking up after the government pledged to double this by 2020. After going into action that year, the industry already saw improved performance in 2014, the last year for which statistics are available. The country saw over 4.5 million foreign visitors arrive, a slight drop from 2013's 4.9 million, but still a marked an improvement over 2009's 2.7 million. However, the majority of these visitors arrived for business-related purposes, making this statistic slightly misleading when it comes to the size of the tourism industry. Kazakhstan's domestic tourism sector has been one of the industry's core markets in recent years; domestic travel has more than doubled since 2009.


The first step to increasing tourism numbers is ensuring that visitors can actually arrive, and Kazakhstan has taken steps in recent years to streamline what was a previously complicated visa process. In years past, foreign visitors needed to pay for a tourist visa, complete a visa application form, and send a letter to a Kazakhstani embassy that included hotel and flight booking confirmations. In 2014, the nation introduced temporary visa-free entry for citizens from 10 major countries, including the UK, the US, Germany, Korea, and Japan. Precipitated by international arrivals for Expo 2017, the move was a key first step in expanding Kazakhstan's tourism base beyond the traditional Central Asian market. In early 2017, the government extended the program, lifting visa requirements for citizens of EU and OECD countries, as well as Malaysia, Monaco, the UAE, and Singapore. Under the new policy, citizens of these nations can travel in Kazakhstan for up to 30 days without a visa, a move that should increase movement into and foreign interest in the country.


Kazakhstan has a wealth of natural tourism offerings thanks to its massive land area and rapidly urbanizing cities. The ninth-largest country in the world as measured by land area, it has 1 million sqm of lakes, deserts, and mountains. A rising player in the winter sports world, Kazakhstan hosted the Winter Asian Games in 2011 and the 2017 Winter Universiade and has been garnering increased attention for its mountain facilities; attractions like the Chimbulark ski resort and the Medeu sport complex have become increasingly popular destinations for travelers looking for quality winter sports spots. Over 1,600 students from 54 countries participated in the Winter Universaide, which saw Kazakhstan spend USD330 billion in infrastructure to build new state-of-the-art facilities for the games. Kazakhstan's hope is that these facilities become repurposed as new tourist permanent destinations for the nation's winter sports industry.

A new wave of tourism is rising around Kazakhstan's natural offerings, with tourism companies offering hiking and adventuring trips targeted toward western consumers looking for little-known habitats. The Tien Shan mountains, for example, are growing in profile as a destination for climbers and tourists interested in seeing some of Central Asia's natural beauty. The western extension of the Himalayan belt, the range begins near Kazakhstan's western border and runs through northwest China. Thanks to glacier runoff the Tien Shan Mountains shelter a number of forests and natural preserves, as well as Almaty, Kazakhstan's largest city. One such natural attraction is the Aksu Dzabagly Nature Reserve, which was established in 1927, and is the oldest of its kind in Central Asia. Located at the base of the Tien Shan Mountains, the reserve is home to over 1,000 species, many of which are unique to the region. Nature tour guide groups have taken advantage of the Reserve's proximity to Almaty and created tourism packages where visitors can travel to the reserve by train and stay in local guesthouses.

Other natural attractions in Kazakhstan include the Charyn Canyons to the east of Almaty. Located on the Sharyn River, the canyon is 80km in length and is recognized for its unique rock formations and nearby protected forests, which are home to remnants of prehistoric flora and fauna. The canyon also offers recreational activities on the site, with rafting and canoeing growing in popularity. Almaty Region is also home to Altyn-Emel National Park, a desert site 4,600sqm in size that is known for its “Singing Sands," royal burial grounds, and ancient rock carvings. Around 80km from Almaty, it has likewise used its proximity to Kazakhstan's largest city to create new tour opportunities for tourists.

Though known for its mountains, central and northern Kazakhstan have their share of natural attractions. Kazakhstan's northwest border lies on the Caspian Sea, the world's largest enclosed body of water. Kazakhstan also has a growing volume of tourism leveraging the nation's traditional villages in central Kazakhstan. Sabanbai-Bi Village, for example, has encouraged tourists to stay with local residents and try traditional Kazakh cuisine, horseback sports, and fabrics. Linking tourism with previously little-known villages like these has multiple benefits: It creates a unique tourism experience that other countries cannot offer and contributes to the economic development of previously isolated regions.


Kazakhstan's urban centers have been transformed in the nation's brief modern history, as the country has used its oil wealth to quickly urbanize by attracting world-class firms and architects. As a result, cities like Almaty and the capital Astana have grown in global prominence and become new destinations for international tourists. Almaty, the Kazakh capital until 1997, is the country's commercial and cultural home. By now a regular host of major events such as the Asian Winter games, Almaty is home to Kazakhstan's national theater and opera house, as well as several cultural museums and monuments. The home of Kazakhstan's stock exchange and financial center, its MICE tourism sector has been growing rapidly in recent years as it has solidified its position as a key central point for both Europe and Asian commerce.

While Almaty's rise has been impressive, Astana's has been nothing short of spectacular. Within a few short years, it has gone from a little-known industrial town in northern Kazakhstan to a landmark metropolis. President Nursultan Nazarbayev led an ambitious initiative to transform the capital's skyline by joining with the some of the world's most well-known architects, giving Astana a unique and world-class feel. Buildings like the 62m-tall Palace of Peace of Harmony, a glass-sided pyramid home to Kazakhstan's Institute of Cultures and Religion, the 97m Baiterek Tower, the 3,500-seater Kazakstan Concert Hall, the Han Shatyr Entertainment Center, and the Ak Orda presidential palace were all constructed in the past 15 years and have turned Astana into a premiere architectural destination. With this development has come a new cosmopolitan feel that has drawn international hotels and restaurateurs and a more international population eager to be a part of Central Asia's most vibrant city. Kazakhstan views Expo 2017 as a key international showcase and opportunity to increase tourism; the three-month event will bring an estimated 3-5 million visitors from 100 countries during Astana's 20th anniversary as the nation's capital, putting Kazakhstan on the world stage like never before. The first such international exhibition to be held in Central Asia, Expo 2017 is an example of the kind of global gathering Kazakhstan's government anticipates Astana hosting regularly.


The future of Kazakhstan's tourism industry looks bright, but government and industry officials recognize that there is still a long way to go. Transportation infrastructure is still lacking in some areas, especially outside the major cities. Similarly, despite the recent influx of foreign hotels, high-end tourism services are not up to international standards in many places. English language services are rare in many places, making access difficult and closing off potential avenues for development. Moreover, Kazakhstan has to take care not to price out the domestic tourism that has thus far been a cornerstone of the industry. Balancing regional and global needs will be a challenge, but the Kazakhstani tourism industry looks well equipped to grow in the near future.

Rustam Ageev
Founder, Agat Group
The idea to open an indoor entertainment center for children came to me after a visit to Dubai with my children and seeing their enthusiasm and joy. At the time I was a distributor of many products around the world for the entertainment industry.
Osaki Koichi
Director, SONY
There are still many challenges here because the market is growing but still small. However, because of the mindset here with customers seeking premium quality products this creates a great market for us. In fact, we have used Kazakhstan as a test market for some new products. We have started a few projects in Kazakhstan and then expanded them into the US and Europe.
Konstantin Kulinich
General Director, Mary Kay Kazakhstan
The trends in the cosmetic market in Kazakhstan are quite understandable for this period; the good news is that the market continues to grow YoY, though it is growing at a slower pace than before.
Alexander Orlov
President, Bulldozer Group
We introduced China Gold, a Chinese restaurant with a large selection of dim sum, and it is the only one in Almaty with such an offering of Chinese food. It is a complex with three concepts: there is a Chinese restaurant, a karaoke bar, and a nightclub. Before, there was no VIP nightclub in Almaty; there was a complicated situation with nightclubs and if some wealthy people wanted to go out they could not find a suitable nightclub because many of them target young people, have cheap interiors, and no crowd control.