Kazakhstan
In 2017, tourism in Kazakhstan contributed 1.4% of GVA. The industry is made up of 118 800 registered businesses employing 463 700 people across the country, and accounting for 5.3% of total employment in 2018. The number of people employed in the tourism industry has been increasing steadily over the last decade. Inbound tourism contributed 4.4% of total export income, representing 36% of all service exports. At the end of 2017, consumer spending on inbound tourism amounted to KZT 768.8 billion, and KZT 1424.3 billion for domestic tourism.
The number of inbound arrivals in 2018 reached 8.8 million, an increase of 14.1% from 2017, and 28.5% over five years. The main source of visitors is traditionally the ex-soviet countries, accounting for 91.7% of arrivals and 70.6% of spending. Visitors from other countries made up 8.3% of the total visitors but 29.4% of the spending. Domestic tourism is also on the rise, with 4.7 million trips in 2018, up 7.0% over 2017. Overnight trips accounted for 94.0% of domestic arrivals in 2018.
The Committee of the Tourism Industry is part of the Ministry of Culture and Sport. The main task of the Committee is making and implementing tourism policy. The Committee is supported by Kazakh Tourism JSC, the national tourist organisation responsible for the international promotion of tourism in Kazakhstan. Kazakh Tourism JCS is also responsible for identifying and conducting negotiations with potential investors in order to attract them to participate in investment projects, co-operating with international and foreign organisations and promoting the country's tourism brand and products in international and domestic markets. Additional responsibilities include skills enhancement of specialists in tourism activities, and participation in the management of priority tourist areas.
At a local level, executive bodies have a range of powers in relation to tourism, which include development planning, co-ordination, market research, business support, tourism information and licencing. Regional authorities and larger cities provide similar services but also have a more strategic role, including master planning and co-ordinating development of financing and protecting regional resources.
The total budget for tourism in 2017 was KZT 4.6 billion, rising to KZT 6.5 billion in 2018. The increased funding is intended to improve the infrastructure of tourist destinations, investment attractiveness, and holding international and domestic events to attract tourists.
Source: OECD, adapted from Ministry of Culture and Sports, 2020
In May 2019, the Government approved The Programme for the Development of the Tourism Industry for 2019-25. The Programme is designed to improve the availability and quality of tourist services and products, as well as the quality of life of the population of the country by developing places of tourist interest and upskilling human resources for the sector. It also focuses on the growth of external and internal tourist flows, increasing investment in the tourism industry by creating a favourable tourist climate, and promotion of the tourist potential of Kazakhstan in both domestic and international markets. Kazakh Tourism JCS used the Programme to guide its marketing and promotion and to attract investment in tourism.
Although Kazakhstan has a favourable geopolitical position, with significant natural and recreational resources and world cultural and historical heritage sites, the country is an emerging tourism destination and is not yet competitive against popular countries for tourism and travel. The government recognises that the quality of tourist infrastructure, openness of bilateral service agreements, complexity of the visa regime, and low quality of roads are areas for further improvement.
The 2019-25 Programme is focusing on resolving these issues and aligning performance with international standards. This work is developed in the context of wider legislation designed to transform the economy of Kazakhstan and includes significant institutional and economic reforms as well as sector development and specialisation. To achieve these targets, the institutional framework has been strengthened, national and local executive bodies formed, working alongside the National Tourism Organisation, Kazakh Tourism JSC, and additional co-ordination measures developed to deal with the cross-cutting nature of tourism, which is estimated to link 30 different sectors in Kazakhstan.
Low levels of investment inhibit the industry’s development and restrict potential growth. In 2017, the country attracted KZT 295.7 billion in fixed capital investment in tourism, 36.6% more than in 2016. In 2018, total investment increased by 65% compared to 2017 and amounted to KZT 447.3. However, many major investment projects are still not able to be implemented due to a lack of state support mechanisms and a lack of long-term and affordable finance for the industry.
In order to attract investors to the tourism industry, the government is carrying out the following work:
Ensuring the necessary engineering and transport infrastructure are brought to investment projects.
Creating a preferential regime for investors, including the provision of in-kind grants and exemptions from corporate income tax, land and property tax. The minimum threshold has been reduced from KZT 4.7 billion to KZT 4.7 million for tourism projects.
A programme has been launched to provide SMEs with financial resources for investment projects in the tourism industry at a preferential rate of 6%.
The core priority of the Ministry of Culture and Sport and the government is to increase tourist flows and attract a larger share of the international market. The number of tourism related businesses has been increasing by 10% to 15% each year, but regional tourism development is unco-ordinated. For example, formal regional strategies are not in place to enable the development of the most promising destinations and products.
The Programme for the Development of the Tourism Industry for 2019-25, aims to position Kazakhstan as one of the 50 most attractive countries for travel in the world by 2025. This will be achieved by reference to the following indicators:
Increase the contribution of tourism to the country's GDP from 5.7% to 8%,
Increase the number of people employed in the tourism industry from 440 000 to 650 000,
Increase the number of overseas tourists from the 830 000 to 3 million,
Increase the number of domestic tourists from 5 million to 8 million,
Increase the volume of tourism services rendered from EUR 256 million to EUR 630 million,
Increase tourism investment from EUR 700 million to EUR 1.4 billion.
The implementation cost of the Programme is KZT 2.2 trillion, more than half of which is financed by the Government, while the remainder comes from the private sector.
Kazakhstan is an emerging tourist destination with limited tourism infrastructure, weak product and services offers, and does not have a high image in global tourism markets. Priority measures, such as visa reforms, air access and high quality accommodation, are a critical part of the current tourism plan. Research has indicated that Kazakhstan has over 100 potential ‘tourism magnets’ and ‘points of tourism growth’. Due to limited resources, and the need for significant investment in each, these have been prioritised at both national and regional levels. This has resulted in the development of a comprehensive map of potential sites and opportunities by the Committee of the Tourism Industry. Various selection criteria underpinned the selection process for these sites, including uniqueness, historical and cultural significance, and availability of accommodation.
The development of the accommodation and hospitality sector is a significant challenge given a lack of skills, the remoteness of many providers and the difficulty in tracking the quantity of stock at national or regional levels using official statistics. A framework for the operation of the sector is currently being developed including a National Hostels Standard, which is being implemented on a voluntary basis.
In 2019, the government created a specialised educational institution - The International University of Tourism and Hospitality – as a model of international and national best practice in the training of tourism personnel. The University aims to improve the training system and increase the competence of personnel in the tourism industry to meet international standards.