Kairat Sadvakassov, the deputy chairman of “Kazakh Tourism” – the tourism board of Kazakhstan, speaks with Travel Tomorrow about his view on upcoming opportunities for modern tourists in the post-pandemic period.
Kazakh Tourism is the national company engaged in the promotion of Kazakhstan as a tourist destination. Its main goal is to ensure and enhance the country’s tourism competitiveness in cooperation with all Kazakhstan tourism partners.
While the whole world struggles with a pandemic of the coronavirus, Kazakhstan’s low population density plays in its favour. The global challenges posed by the Covid-19 pandemic require tourists all over the world to adapt to the new circumstances. Kazakhstan with its vast territory and abundance of national parks is a unique destination where social distancing is something unforced and natural.
1. The UN World Tourism Organization’s Tourism Barometer estimates a USD 1.3 trillion loss due to the sharp drop in international travel. What have been the effects of the pandemic across the different sectors of the economy in Kazakhstan? What measures has the government taken to help alleviate the impact so far?
Kazakhstan has seen a 2.6% decline in GDP as a result of the turmoil of 2020. The country had to declare a state of emergency and a lockdown for 1 and 1.5 months respectively. Like everywhere else one of the biggest downturns is with the travel and tourism industry.
The government has taken proactive measures to support businesses and the population at large. Various reliefs such as payroll and property tax waivers as well as deferral on payments of loans and rents in government owned buildings were offered to both SMEs and large enterprises. Low-interest loans were also made available for businesses across priority sectors including tourism.
Around 90 thousand people were retrenched and about the same number were forced to take an unpaid leave. There were job losses too and the government paid out a minimum wage to such categories of citizens during the months of lockdown.
At the same time, there is an increase in production volumes in manufacturing, agriculture and construction for 3,3%, 5%, and 6,5% respectively.
Kazakhstan’s government adopted a Comprehensive Plan to restore economic growth which rests on 10 main pillars: attracting investment, real sector (agro-industrial complex, fuel and energy complex, manufacturing industry, construction), service industry (transport, trade, tourism), small and medium business, macroeconomic stability (fiscal, monetary policy and the financial sector), labour market, digitalization of economy, social sector (education and healthcare), regional development and strategic planning. Overall, these 10 chapters contain 172 systemic measures which are aimed at stimulating business activity, supporting employment and increasing household income.
2. In particular, what has been the impact on the travel and tourism sector? How have hotels, airlines, tour operators adapted their business models to compensate for the 1 billion fewer international arrivals in 2020, as estimated by UNWTO?
Travel and tourism sector of Kazakhstan has seen a dramatic decline on many levels last year as a result of Covid-19. According to the official statistic data for the 9 months of 2020, the number of hotel stays decreased by 47%. That is why the total volume of provided service decreased by 49%, from 221 million USD in 2019 to 118 million USD in 2020. The number of people employed in the T&T industry fell by 7%, from 487 thousand people in 2019 to 454 thousand in 2020.
Only 10% of hotels managed to continue limited operations during quarantine by turning into hospitals and/or offering laundry and delivery services.
The travel agents and operators business was hit the hardest. Both inbound and outbound travel companies turned their sights onto domestic travel albeit the opportunities were extremely limited. The number of domestic travel dropped by 50% mostly due to lockdown and restricted travel during several months afterwards which fell on summer season. Moreover, the biggest chunk of domestic travel up to 80% has always relied on business travel which also shrunk drastically.
Perhaps the boldest decision the government made in this uncertain time is gradually opening up domestic travel and hotels and restaurants with no large gatherings (banquets and mega events) in the middle of the tourist season. First few flights and couple of weeks of hotels resumed operations had no demand due to the manadatory requirements of a negative PCR tests from passengers/visitors but jointly with our trade associations we managed to convince the government to lift this restrictions. Likewise the national parks returned to business as usual among the first ones. These unprecedented for the region measures helped businesses remain afloat and catching some of the hot season. On top of this our first LCC Fly Arystan has been a tremendous boost in domestic travel.
We also laud the decision of the flagship carrier Air Astana to resume several of its international routes early in the summer season which helped attract some international business and leisure travelers.
On a positive note, the volume of investment into fixed capital in T&T industry increased by 31%, from 1,1 billion USD in 2019to around 1,5 billion USD in 2020.Overall private investment made up 4.5 billion USD (2019-2020) as we saw new hotels, an international airport and other commercial properties commissioning in summer of 2020, e.g. 5 star Rixos and Sheraton, Hampton by Hilton and Holiday Inn in Mangystau and Nur-Sultan as well as in one of the Silk Road destinations in the South Kazakhstan’s most ancient city Turkistan among others.
Likewise, the government initiated more infrastructural projects mostly in road and engineering constructions by investing over 300 million USD in 53 projects across the country.
3. Kazakhstan and Uzbekistan have agreed on a “travel corridor” to connect pilgrimage sites. Will 2021 bring more of these kinds of agreements to boost local and regional travel, and what synergies could be created? Could this be a possibility with neighbouring countries such as Russia and China?
In 2021, Kazakhstan plans to continue the development of tourist infrastructure along the route of the Great Silk Road with further connection to Uzbekistan’s historical sites. Development involves the restoration of architectural monuments as well as new facilities, including world-class accommodation and MICE venues.
The travel corridor is being still considered with our southern neighbor and provided the practice brings positive outcomes without jeopardizing epidemic situation in both countries, the experience will be expanded to other nations.
4. In these times of restricted mobility, some countries have reshaped their strategy to include “workation” packages in their tourism offer. Visitors can continue to work remotely while experiencing a different setting and culture. Is this something that could be implemented in the near future? How relevant could this option be for tourism in Kazakhstan?
Kazakhstan has been welcoming “digital nomads” from around the region for many years. With our extended list of visa-free countriesand impressive investor preferences as well state of the art hard and soft infrastructure (a heritage of EXPO 2017 event) for start-ups creates auspices for workation travelers. We look forward for the government’s decision to restore the visa waiver program (currently suspended due to pandemic) after May 1st of this year.
Some of the areas of Kazakhstan owing to remote yet picturesque location offer natural social distancing which many modern travelers will appreciate. The country is placing high on its agenda the efforts to improve internet penetration to such areas now including national parks and CBT villages.
5. How is the vaccination rollout coming along? Any rough estimates regarding timelines? What are the main challenges ahead?
Vaccination is carried out in stages, taking into account the epidemiological significance of the various population groups and the availability of the vaccine.
On 1 February 2021, Kazakhstan started vaccination with Sputnik V vaccine. The vaccine produced in Kazakhstan, which is currently in the 3rd phase of clinical trials, will be added to the vaccination process in the 2nd quarter of 2021.
At present, vaccines against Covid-19 from other manufacturers, such as Pfizer (USA), are not available in Kazakhstan until the second half of the current year.
In the first stages (from 1 February to June 2021), vaccination is provided to health workers, teachers, law enforcement personnel and persons with chronic diseases.
Since July of this year – the remaining population will start receiving vaccination as well. So by the end of 2021, we expect the population to have collective immunity to the coronavirus.
The main challenges ahead are to look out for new potential strings of the virus and be ready to stay in the “shifting mode” for prolonged period whereby regions of Kazakhstan keep switching between Red, Orange and Green zones thus adjusting public movements (shops, restaurants, schools, public transportation, theaters) depending on the level of overnight new cases. So far this approach has proved effective helping reduce new cases and keep hospitals at the comfortable level of occupancy.
6. What will happen to the Travel & Tourism sector in the short to mid term? Will businesses survive until a significant number of people can get vaccinated and travel without concerns of infection and/ or quarantine periods? How?
There is no way the business will get back to usual globally in 2021 or the 1 half of 2022. We see what’s happening in popular destinations in Europe and Americas and that doesn’t give any hope the industry will recover and return to pre-covid times soon. The vaccination although started and being rolled out rapidly doesn’t guarantee quick recovery. Public fear coupled with purchasing power decline will remain there until at least next summer season.
“Vaccine passports” will definitely pave the way to a more expedited revival provided countries agree upon mutual recognition of such. The exchange of databases of vaccinated travellers has to be the first priority of countries relying on tourism.
The silver lining though is a domestic travel. It is especially valuable for destinations like Kazakhstan with a negative balance of outbound and inbound/domestic travel.
7. How will the world look when the pandemic is finally under control? How can we resurface from this pandemic with a more sustainable model of living?
Curbing the current pandemic this time doesn’t obliterate the odds of a new epidemy. Looking backwards we note different contingencies happening every 2 to 5 years that affected travel such as 9/11, SARS, the global financial crisis, swine flu, and Ebola. The world has to keep on with travel and tourism as if the pandemic will never go away. Travel/vaccine passports, plexiglass, social distancing, and wearing masks will stay there for a while. Having said that, we also witnessed the courage and zeal the modern-day traveller showed by visiting war/unrest zones, and exploring unknown frontiers and dangerous sites. I do see the return of travel mostly due to the rise of adventure travel…what’s happening now in the world is a sort of adventure tourism of its own.
Based on a survey of one of the niche OTAs serving our region indyguide.com there is clearly an interest to return to travel. The difference is only how soon and with what type of travel people will prefer after the pandemic. I personally feel that the advantage of our region in post-pandemic will be in offering more secluded, unorganized travel mostly in natural settings. Between the vast scarcely populated territories and natural parks here in Kazakhstan we will try to stand out.
Now since the pandemic led to an economic downturn which also coincided with global trade wars (US-China) and nationalization as opposed to globalization (e.g. Brexit) as well as geopolitical tensions the governments will have to invest in inducement of travel.
In our case in order to stimulate domestic and inbound tourism we are close to adopting a new legislation. A stimulus package is being offered by us to help boost revivification of travel which consists of several measures catered to 3 stakeholders: travelers, travel operators and investors. First mechanism called «Kids go free» – free air travel for children from 2 to 14 years old to top-10 travel destinations of Kazakhstan. Second, a compensation mechanism for tour operators (around 50 USD) per foreign tourist served. Third, subsidizing up to 25% of the cost of tourist vehicles including tourist coaches and minibuses. Lastly, various reimbursements of capital expenditures for tourism related projects such as hotels, ski lifts and roadside services.
8. What destinations are on your radar for 2021 and 2022? What places would you recommend to Travel Tomorrow’s readers?
Basically anything in natural settings such as protected areas and remote travel involving long-distance driving including caravaning. I still have to discover my own country with all of its 13 natural parks and versatile landscapes that the 9th largest country in the world can offer. Outside of Kazakhstan I personally enjoy traveling in Canada. This destination is very similar to Kazakhstan both in terms of climate and nature and I learn a lot from them.
