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Mongolia News / Others / October 28, 2014

Bumpy Roads for Tourism

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Mongolia is seen by locals as a remote paradise full of splendors that only the motherland can provide. It’s a country rich with culture that its children are proud to share. Too bad that negligance from government keeps the industry a blip on the economic charts.
Sustainable tourism provides jobs in local communties and encourages more spending there. It’s also an economic incentive to help preserve cherished vanishing cultures, such as Mongolia’s nomadic tradtions. Conversely, mining tends tends to benefit only a small portion of a population. Too much reliance on resources typically results in appreciations of the local currency and deteriorating competitiveness in all other sectors – a phenomenon known as “Dutch” disease.

By most accounts, tourism in Mongolia has been a drag in 2014. Government figures have shown that the number of people entering on tourist visas was about 8.5 percent less in the first seven months of 2014 than last year. That total number of visitors during the 2014 period was 210,587.

However, because many people enter the country to look for work or other reasons unrelated to tourisms, that figure alone is unreliable. Finacial reports from the publically traded Genco Tour Bureau show earnings were down 22% for the first half of the year. Tsedevdamba Oyungerel, Mongolia’s Minister of Tourism, Sport and Culture, confirms that tourism is down from past years, saying “July was quite a successful month. But only July. June wasn’t successful and August was not good either.”

Roughin’ it

The services found in Mongolian tourism leave most travelers wanting more. A lack of roads makes travel overly long and sometimes perilous at night when there is little-to-no visibility. Although the government plans to have paved roads built between the capital and every province next year, there still won’t always be routes between provinces.
“The quality of roads is really bad—its bumpy with many potholes. Really government should do something about the roads,” said Unbrakh Tsetsenbileg, a sales manager who has also worked as a tour guide during her four years at Juulchin World Tours.
Air travel is also unreliable at best, she said. It is common to book flights weeks in advance, only to learn the day of your flight that it has been cancelled.

Oyungerel and Tsetsenbileg both think tourist companies must find ways to intrique more potential travellers through marketing and promotion. That’s why the Tourism Ministry has spent most of this year’s budget on its partnership with the ITB Berlin trade show to help build up a network with travel companies around the world.

But actions like last year’s attempt by the Ulaanbaatar Citizens’ Council to ban the use of foreign languages on signs outside buildings are hurting the industry. Oyungerel said she took a loud stand against the movement that arose because locals felt their capital looked too much like “a foreign country.” Her argument that the signs were helpful to foreign guests prevailed.

One of the country’s largest tourism draws, the Mongol Rally, fared less well amid similar hostility, however. The event’s organiser, The Adventurist, will for the first time since launching the driving marathon 10 years ago end it at a new location, according to event manager Katy Willings. 2015’s brave motorists will travel 10,000 miles from Britain across Europe and Eurasia to finish at the capital of another Mognol nation, Ulan Ude in Russia’s Buryatia Republic.
Once a signficant source of revenue for the government, this year will also be the first time rally cars will be shipped out of Mongolia back to Europe, rather than donated or sold. “New policy: no car left behind. We’re never going to import another car to Mongolia,” said Willings.

Local newspapers decried the Mongol Rally as a public nuisance and an excuse for super-charged young foreign travellers to leave junked cars in the developing country. To the contrary, Willings says the cars are all refurbished and must pass inspection before being sold or donated. Proceeds from sales that exceeded The Adventurist’s own expenses were donated to charity, said Willings.
Strained relations with the Mongolian government made organizing the event more trouble than it was worth, she said, so participants will not even have to drive through Mongolia anymore to finish. For Mongolia, that means no customs duty, VAT, excise tax, and sales tax on hundreds of cars. Worse still are the lost dollars that would have been spent by the rallyers in Mongolia during their travels.

Rolling the dice on casinos

Oyungerel at the Tourism Ministry is now hoping to legalise gambling to create new attractions for the country. She says she expects to see parliament vote on a law that would allow for a horse racing track. She is also preparing a second bill that would allow for a casino.
“The legalization of gambling, if done in a responsible way, would be a major positive for Mongolia’s economic growth and create an industry that is larger than the current mining based economy,” said Harris Kupperman, chairman of the real estate development firm Mongolia Growth Group. “With over one billion potential customers in China alone, the legalisation of gambling would allow Mongolia’s tourist sector to mirror Macao’s growth over the past decade.”

And The Adventurist, which encourages its clients to get “lost and in trouble,” hasn’t abandonned Mongolia either. It will continue to host the Mongol Derby in Mongolia – a 1,000 kilometer horse race that replicates the journey of the postal riders that delivered messages for the 13th Century Mongol Empire. The event employs herders to provide the horses for the race. Mongolia’s horse culture also lends more affection to the event for Mongolians, said Willings.

But the real challenge Oyungerel and tour groups will have to manage will be improving the industry without wiping away the rugged veneer that makes Mongolia such a special place to visit in the first place. “There is a beauty about that,” says Oyungerel, about the uncertainty in Mongolia that all at once is a cause for frustration and awe for visitors. “Those who travel to Mongolia should expect some spontaneity. If they live by a set schedule they should come to Mongolia and leave behind their schedule for some days.”

SOURCE: Mongolian Economy




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