Saturday, May 31, 2014

Mongolia carves tourism niche

By Paulius Kuncinas
Regional Editor, Oxford Business Group

Efforts to highlight Mongolia’s broad range of attractions are paying off, with the tourism industry on course to notch up a decade of sustained growth, a recently published report has concluded.

In its overview of the Mongolian tourism industry for 2014, the World Travel and Tourism Council (WTTC) said arrivals, earnings and employment were all on track to rise over the next 10 years, on the back of significant investment. However, officials are aware that improved coordination between the public and private sectors in key areas, such as infrastructural development and marketing, will also play a part in supporting the industry’s development.

Arrivals on the up

Mongolia’s tourism sector generated 238 million USD in 2013, according to the WTTC’s report, directly contributing 2.5 percent of GDP to the country’s economy. The council expects overseas arrivals to be a key driver of growth, with numbers forecast to edge towards 700,000 by 2024, up 50 percent from an anticipated 456,000 this year.

Tourism’s overall input into Mongolia’s economy is forecast to ease over the coming decade on the back of high growth levels anticipated in other sectors. However, direct revenue should increase by 6.3 percent annually over the next 10 years to reach 462 million USD, while the number of jobs available in the industry looks set to rise from 26,500 in 2013 to 31,000 by 2024.

Figures are expected to show that Mongolia’s tourism sector attracted 59.6 million USD in capital investment last year, which is forecast to rise by 7.3 percent annually over the next 10 years. The industry’s overall share of national investment should remain steady at 10.5 percent, the WTTC concluded.

Heads together

While forecasts for the industry look promising, the government is keen to forge closer links with the private sector in its bid to better market Mongolia on a global platform.

The authorities have traditionally concentrated on highlighting Mongolia’s cultural attractions, such as its museums and craft activities, while private travel companies are, instead, targeting a new wave of tourists looking for an “off the beaten track” destination. Hiking, horse-riding, camping and off-road vehicle safari tours are among the broader range of activities that operators are publicizing.

Representatives across the industry are keen to bridge current gaps by working to promote Mongolia in its entirety. Coordinating efforts will include broader consultation on infrastructure needs, transport and advertising.

Going global

Mongolia’s International Travel Mart 2014, which took place at the end of March, generated noticeably higher levels of interest among tour operators. Organized by the Mongolian Tourism Association, the event also brought increased regional representation, with 16 of the country’s 21 provinces, opting to participate.
The decision to sign up as the official partner country for the major annual travel trade show, ITB Berlin 2015, next March, should also support the government’s marketing efforts.

“We regard tourism as a long-term opportunity that diversifies our economy,” P.Altangerel, State Secretary at the Ministry of Culture, Sports and Tourism said, commenting on the partnership in early March. “Mongolian companies are also very keen to actively cooperate with the international tourism industry.”
Tourism Minister Ts.Oyungerel told OBG that new legislation, which is currently being drafted, would help protect sites of interest, while also setting the scene for the government to invest in the sector.

Winter dilemma

She also acknowledged that other challenges which mark the industry, such as seasonality, will need addressing. Mongolia’s long and extreme winter has traditionally restricted the tourism season, making it difficult for operators to retain a qualified workforce.

“Workers need to know that their job is reliable year-around and not seasonal,” she told OBG. “This is why investment in winter tourism is essential to help us build capacity and develop attractive employment options for future leaders in the sector.”

New attractions, such as a dinosaur museum set to open in the summer, and improved travel infrastructure, led by a new international airport which should be operating by 2016, are signs of Mongolia’s commitment to tourism expansion. A focus on extending the season will support efforts to drive further growth, enabling Mongolia to make full use of its abundant resources and develop the niche markets that are already generating significant interest.

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