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Tendencies of Travel Industry development in Kazakhstan

This scientific article is devoted to questions of development of the industry of tourism and hospitality in the Republic of Kazakhstan, their problems and development prospects are considered. Some regularities of development of the industry of hospitality from the tourism industry are shown. The picture of the Kazakhstan consumer and his feature is considered, preferences of the Kazakhstan consumers in rest in foreign countries are published. The medium-term prospect of development of tourist activity and its main component industry of hospitality, in the conditions of market economy is given. 

The rapid development of the Commonwealth of Independent States travel industry leads to coherent development of the hospitality industry. Nowadays, the hospitality industry has a significant value. In the context of increased globalization the main task of hotels is to satisfy all the needs of its customers, ranging from the provision of accommodation, and the last holding of business conferences.

Meanwhile, the concept of «corporate travel» was formulated in 1970–80's, but the root of this phenomenon goes deep into time. So, the migration related to business dealing reaches the impressive proportions. Therefore, the industry of corporate or business travel has been gaining momentum.

According to the World Business Council for Travel and Tourism (WTTC), in 2012 the range of business trips around the world amounted to $819 billion, by 2020 WTTC predicts a figure of $1.589 trillion, which means an annual increase on 4.3 %. The share of non-residents visited the republic with an aim of business and a professional purpose is 33 %, the share of Kazakhstani is higher and amounts to 50 % [5, pp. 55–56]. Predominance of this segment in the structure of demand for hotel accommodation is specific. So, business demand is stable and less subject of other differences even in times of crisis [1].

Business travel includes business trips, participation in conferences and seminars, training, incentive travel, holding of newsworthy events.

In Kazakhstan, business travel market began to grow from the beginning of the 2000s. The market growth of inbound business travel is mainly due to Almaty. Astana is the next challenger for the title of business center in the country. As so the Republic is located in the heart of Eurasia, it has common borders with five countries, such as: China, Kyrgyzstan, Turkmenistan, Uzbekistan, Russia. Most of the major cities of Kazakhstan are geographically close to large centers of neighboring countries than to each other. Also, travel to foreign border regions accessible enough. Evidence of business travel development in Kazakhstan can be presented not only by the conference «Abacus Corporate Travel ACTC 2013 «, which was hold in October 2013 in Almaty, which main idea was to introduce Kazakh market with international practice, the development and implementation of business trips policies; but International Youth exhibition of innovative projects «Expo CAMP – 2013 «; and upcoming exhibition «Astana Expo – 2017 «, which will be held in Astana, and for organizing the exhibition Kazakhstan offered the theme as «Energy for the future». Kazakh authorities expect that about five million people will visit exhibition in Astana. The president of the republic Nursultan Nazarbayev declared the year of the EXPO – 2017 as the year of China's tourism in Kazakhstan [2].

All this will give a powerful boost to further development of business tourism. Despite all the available prospects for the development of travel industry in the country, Kazakhstan ranks 81st place in the world in income from tourism, such data are published by World Tourist Board. Russia is on the 22th place in the ranking of countries by income from international tourism, Ukraine occupies 48th place, Belarus is on 104th, Armenia is on 121st, Azerbaidzan is on 97th, Kyrgyzstan is on 133rd, Moldova is on 140th place [3]. The main reason why our country is back from developing tourism in the whole world is the lack of long-term prospects of tourism development. Ministry of Industry and New Technologies (MINT) of the Republic of Kazakhstan has developed a long-term program «Tourism 2020» of tourism development, which will cover all related sectors of the tourism industry (hospitality industry, infrastructure and also development of ski cluster, business, medical tourism is planned etc.).

International tourism in the world in 2012 is increased to 6.7 % compared to 2009 and amounted to 935 million people. In the period of crisis, in 2009 this figure decreased by 4 %. Such data were published by the World Tourism Organization (UNWTO). The flow of tourists in 2012 is increased to 58 million compared with 2009 and to 22 million compared with 2008. The uptrend in the flow of tourists has affected all regions of the world, but most of all developing countries. So, Asia (+13 %) was the first from recovered and most actively developing regions in 2012. It is necessary to point out that number of international arrivals reached to 204 million in comparison with 2009, when it was 181 million. But, Africa (+6 %, 49 million arrivals) was the only region with a positive result in 2009, and continued to grow in 2010. On the one hand, in the Middle East after the crisis in 2009, the results began seems to be expressed again at double-digit (+14 %, 60 million) and almost all the destinations grew to 10 % or more. On the other hand, in Europe (+3 %, 471 million) recovery has been slower than in other regions due to the spring intensity of the Icelandic volcano, as well as economic instability in the euro zone (Fig. 1).

 Quantitative and interest-bearing growth indexes of tourist arrivals in world countries after the crisis of 2009 (based on data provided by the World Tourism Organization (UNWTO))         

Figure1. Quantitative and interest-bearing growth indexes of tourist arrivals in world countries after the crisis of 2009 (based on data provided by the World Tourism Organization (UNWTO)) 

Although, the situation began to improve and indexes of individual countries were better than  average in the region, it was not enough to cover the losses of 2009. That is why growth of incomes in international tourism still less than arrivals indexes, and it is a common trend of a recovery period. According to terms of costs per tourist per day among the developing countries, the picture looks as follows: China (+17 %), Russia (+26 %), Saudi Arabia (+28 %) and Brazil (+52 %). Among the traditional markets, which best cope with the global financial crisis are: Australia (+9 %), Canada (8 %), Japan (+7 %) and France (4 %). (Fig. 2) Moreover, more modest charges are seen beside the tourists from the U.S., Germany and Italy (2 %) [4].

 

Leading countries in terms of costs per tourist per night (based on data provided by the World Tourism Organization (UNWTO))

Figure2. Leading countries in terms of costs per tourist per night (based on data provided by the World Tourism Organization (UNWTO)) 

The situation is very different today. UNWTO suggests that the flow of tourists will increase to 4–5 % and will reach 970–980 million. Also, UNWTO Press Service reports that the international tourism task is to secure positive results made in last two years. So, tourism developing brings the development of related industries, leads country to a new economic level, enhances the integration between the countries, and promotes the exchange of experience.

InterContinental Hotels Group held in September of 2013 global survey, which brought 7000 tourists from around the world, and identified key needs and preferences of modern tourist, which are presented in Table 1 [4]. 

Results of InterContinental Hotels Group research*

T a b l e  1

 Results of InterContinental Hotels Group research*

* Compiled by the author on the base of research by InterContinental Hotels Group  

Thus, we can generalize the results of the research. It is important to note, that travelers expect personal service, not only in the tourism industry, but also in all spheres of life. These results also show that travelers impose high requirements to hotel accommodation, prefer authentic local color, unforgettable atmosphere, and high level of comfort. The paradox is that tourists choose innovation too, and the immutability of the fundamental things.

Studying domestic tourist, you must look at the statistics of the tourism industry of the Republic of Kazakhstan. The dynamics of the tourism industry is represented in Figure 3 [5; 39].

 Dynamics of tourism industry (2008 to 2012, thousand people) (based on the data provided by the Agency for Statistics of the Republic of Kazakhstan)

Figure 3. Dynamics of tourism industry (2008 to 2012, thousand people) (based on the data provided by the Agency for Statistics of the Republic of Kazakhstan) 

It is important, that annual growth of each of tourism structures. So, the most share belongs to outbound tourism in 2012 (it's about 64 %), as for domestic tourism — 31 % and inbound tourism is 5 %. The total number of residents leaving country in 2012 is more than 9 million people, about 8 million people of them move to CIS countries and more than 1 million moves outside the CIS [5; 12].

This specificity of Kazakhstan tourists in 2012 we can observe with the help of following picture (Figure 4). Accordingly, we shall specify that the main purpose is entertainment, and also shopping, and third place is related to professional activities, as a rule, it is a business trip, in order to maintain and grow of your business.

 Number of people who went abroad, thousand people (based on the data provided by the Agency for Statistics of the Republic of Kazakhstan)

Figure 4. Number of people who went abroad, thousand people (based on the data provided by the Agency for Statistics of the Republic of Kazakhstan) 

If we consider the duration of tourists' stay abroad, the trend toward a long vacation every 5th person is ready for a long vocation. Compared to the Europeans, for whom long vacation is 6 months, for Kazakhs enough 1.5–2 months. This time is enough to spend with family, visit historical sightseeing, hiking, visiting cultural events. There is a tendency among Kazakh's who spend their vacations abroad. It's according to Head Hunter Research Service survey conducted in July 2013 among 2790 Kazakhs and revealed that 46 % spent their holidays abroad, as well as 42 % of citizens who their upcoming holidays going to spend abroad [6]. From the survey is also known hat 45 % of citizens in Kazakhstan, who had been abroad, spent 1–2 thousand dollars, in average, per one family member. As for hotels preferences of Kazakhstan tourists varied, ranging from 3 star hotels and ending 5 stars with «luxury» class rooms. Just again according to the CTA survey, we note that traditionally popular countries among Kazakhs such as: Turkey, China, and the United Arab Emirates.

If we consider the structure of residents traveling outside the CIS in 2012, we can distinguish five countries most frequently visiting by our tourists. China is on the first place, followed by Turkey, UAE, Germany and Thailand [5; 10]. The dynamics of visits these countries by Kazakhstan tourists is represented on Figure 5 (Fig. 5).

 Dynamics of tourist flows in 2008–2012 to leading countries, by the number of trips for travel purposes (based on the data provided by the Agency for Statistics of the Republic of Kazakhstan)

Figure 5. Dynamics of tourist flows in 2008–2012 to leading countries, by the number of trips for travel purposes (based on the data provided by the Agency for Statistics of the Republic of Kazakhstan) 

Actually we shall see that five of these countries attract our tourists. That's why it is necessary to consider the conditions in each of these countries, and highlight some of the criteria that guide Kazakhstan tourists. The main criteria of choice for visiting China are:

  1. Visa-free travel;
  2. An opportunity to make a bargain;
  3. Variety of

China has always attracted a lot of tourists from all over the world, Kazakhstan tourists are not exception. First and most important thing is the island of Hainan, as well as Hong Kong, because of visa-free travel up to 14 days, which is very beneficial for tourists. There are direct flights from Kazakhstan to Hong Kong and Urumchi, where most of the shopping is done. Many Kazakh businessmen visit China for purchasing of various wholesale products, such as clothing or digital appliances, in order to implement it in our country.

There are some hotels of different class and rank, from 5-star hotels to simple hostels. There is a  street in China, it calls Dazhalan, where a lot of different hostels of various price categories are situated, which is really convenient for the budget traveler. But besides the luxury class hotels are these hotels: Aegean Conifer Suites Resort Sanya, Banyan Tree Sanya, Cactus Resort Sanya, etc. This confirms the possibility of accommodation in every price category.

China is a huge mysterious country with an ancient history and of a great potential for tourism and entertainment. Everyone can find a way to spend the time with pleasure. The main purpose of Kazakhstan tourists is shopping, for which over the 18,888 people in 2012 arrived to China. And entertainment takes the 2nd place, that is 4 260 people. Also, one of the popular reasons to visit China is visits to relatives and friends, for this purpose over 1337 people quit the country. Medical tourism in China has attracted 481 people, 3419 people quit for other purposes, which also include leisure, learning martial arts and traditional medicine and so on (Fig. 6). According to VISA, the share of payment transactions with plastic cards of our citizens is 5 % that rises in average on 3 % per year, and takes the 8th place in the list of foreign payments [7].

 Reasons of Kazakhstan tourists visiting China (thousand people)  (based on the data provided by the Agency for Statistics of the Republic of Kazakhstan)

Figure 6. Reasons of Kazakhstan tourists visiting China (thousand people)  (based on the data provided by the Agency for Statistics of the Republic of Kazakhstan) 

It is evident from the Figure 5, the annual increase of tourist flow to Turkey, while this figure is growing steadily, and the number of Kazakhstan tourists visited Turkey in 2012 is more than 400,000 people. According to antalyatoday.ru income in 2012 from the travel industry has exceeded to $9 million. By increasing the number of foreign tourists, travel industry in Turkey has about 78 % of total revenue, and only 22 % from domestic tourism. A significant share of income of the tourism industry has been received by individual tourism and the sale of travel packages [8]. Among the main purposes of Kazakhstan tourists visiting Turkey is staying at the resort, it was chosen by 202000 people and on the second place is shopping, it was chosen by 23603 interviewed people (Fig. 7).

 Reasons of Kazakhstan tourists visiting Turkey (thousand people) (based on the data provided by the Agency for Statistics of the Republic of Kazakhstan)

Figure 7. Reasons of Kazakhstan tourists visiting Turkey (thousand people) (based on the data provided by the Agency for Statistics of the Republic of Kazakhstan) 

It is obvious, that the main reasons for visiting Turkey, among our tourists are:

  1. Developed hotel facilities and resort entertainment system. It's naturally, because to receive and organize the flow of tourists Turkey needs a huge and well-developed hotel Today, country has a fairly large number of hospitality institutions. Turkish hotel projects work in different price categories. Often, hospitality institutions offer their guests to stay in the territory of luxury residences with very comfortable rooms and good infrastructure. So, a significant share of income of the travel industry has been received by individual tourism and the sale of travel packages. In average, foreign tourists spend about $620 during the holidays in Turkey [8].
  2. Turkish lira rate. Kazakh travelers still retain a strong interest to Turkey and represent a significant flow of tourists into the Significant cause of Turkey attractiveness is Turkish Lira exchange rate.

Lira is weaker than U.S. dollar and the euro in relation to purchasing power. This creates an advantage for the tourist, who does payment in dollars and euro’s. According to the data of VISA company, the share of Turkey is over 7 % of transactions on plastic cards issued in Kazakhstan. Thus, Turkey is ranked 4th place in the list of transactions [9].

  1. Visa-free travel. The attractiveness of Turkey for Kazakhstan tourists is also in visa-free travel up to 30 days. When buying a tourist package, the price includes encounter of passengers at the airport and arriving by bus to the hotel complex. This not only simplifies the steps in the movement of tourists, but also acts as a plus when choosing Turkey as a holiday
  2. System «all inclusive» is a huge advantage, as it eliminates the problem of food and entertainment for children. Such support of state travel industry annually attracts large number of tourists, which significantly increases the income from this It is important to note that Turkey does not have a strictly established rule of «all inclusive» and every tourist can pick up an appropriate stay on his budget. We can confidently say that our tourists prefer to travel backpack system «all inclusive», as well as willing to pay for a stay in comfortable surroundings. Because of this, travel package with already pre-booked hotel room is more popular than the organization of independent travel, taking into account the fact that for the finished and formed travel package is paid a higher price. Domestic tourists prefer a comfortable stay in a good private room and all other services for relatively expensive price. So, tourist resorts are popular among Kazakhstan travelers.

Back to 2008, the flow of Kazakhstan tourists to Egypt was over 8865 people, ant the peak is 2010, the quality of tourists was reached to10, 498 people. In 2012 the tourist flow has decreased to 2678 people [5; 20]. First of all, this is due to an acute political situation in the country. Despite the fact that the last period the internal situation in Egypt is stable. The emergency state and curfew are cancelled. In the resort areas and on the coast of Red Sea, Egyptian authorities provide the necessary level of safety and security. However, in some major cities, including Cairo, the situation remains complicated. Based on the above it is logically explained the decrease of tourists flow to Egypt, as well as the increase of tourist flow of Kazakhstan tourists in countries such as Turkey, UAE, Thailand.

The main reason of tourists flow in the UAE is the tourist season, which remains open during the winter months. Most hotels in the country are more expensive than in Turkey, but the deficit of economic hotels in the UAE is slowly leveling. Among the tourists from Kazakhstan possessing VISA plastic cards, the UAE is on the 2nd highest place on the quantity of operations. Share of these operations is 10 %, but is showing signs of rapid decline. This indicates a gradual loss of interest in shopping in this country. This trend is confirmed by MasterCard company. Country's share in 2012 was 8.58 %, which is 13 % less than in 2011 [10].

Thailand is a competitor of the UAE, as well as tourist season begins in November and lasts until February. The main advantages of Thailand to the UAE are lower prices for hotels and entertainment and the opportunity to obtain short-term visas at Thai airports. According to MasterCard, in 2012 this proportion was %, which is 26 % more than in 2011 [11].

After spending some observations and analyzing the statistic data, the motivation for the trips, the number of sold packages with all of the services, media news and available official sources of information, as well as various literature, the portrait of Kazakh consumers was drawn (Fig.10).

As it was mentioned before, Kazakhstan tourists prefer staying abroad than staying in the country. There is a tendency of integration between nations. Planning the vacation every citizen of Kazakhstan take into account variety of factors, ranging from the budget, accommodation, conditions finishing more specific requirements. There is the specific feature of Kazakhstan tourist staying abroad, such as broaden the mind, good and proper rest, study the motives in choosing a specific package of services, geographic features, social, demographic and economic characteristics of the economy of the country (region) will reveal all the details in preparation of tourist package, develop more suitable travel packages for Kazakhstan consumers, because every citizen of Kazakhstan wants to visit not only countries that are available to him on the budget, but also the whole world. Interaction of Kazakhstan tourist agencies with foreign partners (hotels, organization of entertainment and leisure activities, etc.), allow to send Kazakhstan tourists in any corner of the world to extend knowledge, allows to raise the country's travel industry to a higher level, improve country's economy in whole, as well as to attract tourists from other countries.

  Portrait of Kazakhstan consumers (compiled by the author)

Figure 10. Portrait of Kazakhstan consumers (compiled by the author) 

Kazakhstan in 2010–2012, according to the World Tourism rankings improved their indexes on five points and took 88th place [12]. Some of the experts from the World Economic Fund, who conducted the study, evaluate countries due to 14 criteria: national, human and cultural resources, the development of communications, pricing, infrastructure of land and air transport, tourist infrastructure, security, health and the environment, and tourism priority.

The first place among the most attractive countries for tourists the third year is Switzerland. Worst place for tourists among 140 countries recognized Burundi, Chad and Haiti. Followed by Switzerland in the list of the most attractive countries for tourists experts put Germany, Austria, France, USA, Sweden, UK, Canada, Singapore and Spain. Russia in the ranking of the most attractive countries stands at the 59th place. To achieve the same performance, Kazakhstan will have to put a lot of effort.

We plan to develop tourism in Kazakhstan by the experience of countries such as Turkey and Malaysia. Close relationships with these countries help to recognize their experiences. As well as taking into account the peculiarities of the economy of Kazakhstan, it is not easy to adopt the skills. As reported by the press industry and innovative technologies (MINT) tourism in Turkey and Malaysia increased in the short term and provides a steady GDP growth, and stimulates the development of many related industries.

The developed program «Tourism 2020 « provides travel products such as «Cultural tourism and touring « and «Short stay — Weekend tours «, proposes the creation of five travel clusters. According to preliminary results of the program in 2020, it is projected that only the nearest neighbors as China and Russia, as well as India and the Middle East will increase the flow of tourists more than 200 million annually. It is predicted that the development of tourism in 2020 will bring an income of at least $9.9 billion, including the profit from the activity of catering, transport, retail and not only, whereas the contribution to GDP in 2020 from tourism should be equal to $6.9 billion [13].

At the Vith Astana Economic Forum, held in May 22d, in 2013, and it was decided to create a  project, in order to attract tourists to the «Baikonur», the city will provide the opportunity for comfortable stay. For these purposes it is planned to allocate 600 apartments, to continue the development of roads and the airport, it also planned to build a planetarium, entertainment centers, and viewing platform for observing starts. It also was mentioned that more than 15 thousand unique exhibits keep the museum complex of Baikonur. And at the launch site located 12 launch pads from which the Gypsies legendary «East», «Union», «Buran». So, Baikonur is the future center of attraction for tourists from all around the world, which should become a brand of tourism in Kazakhstan.

Press-service of KazRDICE («Kazakh Research and Design Institute of Civil Engineering and Architecture») branch announces the establishment of tourist-recreational and food side as 3T «Taraz-TurkestanTashkent» with its heart in the city of Shymkent, which will revive cultural tourism on great Silk Road [14].

For the development of modern, competitive tourism industry in Kazakhstan an important role is in efforts of management and tourism business cooperation, in improvement of legal framework for its development that enables us to determine the economic and social outcomes and to ensure their effective cooperation in application process [15].

All of the mentioned above, this gives the evidence of strong prospects for the development of tourism activities in the Republic of Kazakhstan. With timely support of all sides of the travel industry in the country, will bring this industry to a higher position, which contribute to the development of economy as a whole, an increase in the rating on the global market, as well as commensurate growth of related industries such as hospitality and leisure industry, transport, safety, environment, and also to attract tourists from other countries.

 

References 

  1. Tourism in the world to 2020 // ForbesKazakhstan. URL: http://forbes.kz//process/businessmen/1589_trln_sostavit_obyem_biznes-turizma_v_mire_k_2020/? mark=%D1 %82 %D1 %83 %D1 %80 %D0 %B8 %D0 %B7 %D0 %BC%20 %D0 %B2 %20 %D0 %BA%D0 %B0 %D0 %B7 %D 0 %B0 %D1 %85 %D1 %81 %D1 %82 %D0 %B0 %D0 %BD%D0 %B5).
  2. The Abacus business conference Corporate Travel, ACTC 2013// Vlast-Internet the magazine with the name,
  3. Profits from tourism in the world  //    URL:  http://forbes.kz/news/2013/02/27/newsid_20476? mark=%D1 %82 %D1 %83 %D1 %80 %D0 %B8 %D0 %B7 %D0 %BC%20 %D0 %B2 %20 %D0 %BA%D0 %B0 %D0 %B7 %D 0 %B0 %D1 %85 %D1 %81 %D1 %82 %D0 %B0 %D0 %BD%D0 %B5
  4. Tourist preferences in 2013: Analysis and Forecast // PROHOTEL portal about the hotel business. URL: http://prohotel.ru/news-216142/0/
  5. Statistical Compendium «Tourism in Kazakhstan 2008–2012» , 39, 12, 10, 20, 55–56 // Agency of the Republic of Kazakhstan on Statistics. URL: stat.gov.kz
  6. Tourism in Kazakhstan // BNews.KZ», News of Kazakhstan. URL: http://www.bnews.kz/ru/news/post/148136/
  7. China ratings in Forbes // ForbesKazakhstan URL: http://forbes.kz/ranking/object/608
  8. Turkey tourist flow // PROHOTEL portal about the hotel business. URL: China ratings in Forbes // ForbesKazakhstan URL: http://forbes.kz/ranking/object/608
  9. Turkey ratings in Forbes // ForbesKazakhstan URL: http://forbes.kz/ranking/object/60
  10. UAE ratings in Forbes // ForbesKazakhstan URL: http://forbes.kz/ranking/object/609
  11. Thailand ratings in Forbes // ForbesKazakhstan URL: http://forbes.kz/ranking/object/611
  12. World Tourism Rating // news service Zakon.kz URL: http://www.zakon.kz/kazakhstan/4551649-kazakhstan-v-2010–2012godakh-vo.html
  13. Revenue from tourism will bring Kazakhstan $9 billion// CAPITAL — business information centre. URL: http://kapital.kz/economic/13607/dohod-ot-turizma-prineset-kazahstanu-9-mlrd.html
  14. Draft tourist site 3T is presented in Taraz // ForbesKazakhstan URL: http://forbes.kz/news/2013/06/11/newsid_30779? mark=%D1 %82 %D1 %83 %D1 %80 %D0 %B8 %D0 %B7 %D0 %BC%20 %D0 %B2 %20 %D0 %BA%D0 %B0 %D0 %B7 %D 0 %B0 %D1 %85 %D1 %81 %D1 %82 %D0 %B0 %D0 %BD%D0 %B5
  15. Duseyn G.M. Formation and development of the tourism industry through the use of natural and recreational potential of Kazakhstan // avtoref.dis, Almaty, 2003, p.

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