Tourism and air transportation were among the hot topics discussed at the latest series of the Mongolian Economic Forum-2018 held on May 21-22 in the Government House.
Prime Minister U.Khurelsukh informed participants that the government will implement a number of activities to support investments in non-mining sectors such as agriculture, tourism and industry. The Prime Minister also pledged that the government will develop the infrastructure for transportation and logistics and implement a package of projects related to the new international airport of Ulaanbaatar in Khushig Valley within the multi-pillar economic policy.
“We have a bright future and potential to boost the tourism industry. Mongolia’s beautiful landscapes are the main attraction for both domestic and foreign tourists. The severe climate, nomadic culture and the history of Chinggis Khaan always attract people across the globe. Unfortunately, we lack the skills to popularise these features, and the number of potential tourists tends to decline year by year” the Prime Minister said. He then talked about his views on some possible reasons related to the quality of infrastructure in Mongolia.
“According to a report by the World Tourism Organization (UNWTO), Mongolia has been classified as one of the valuable and safest nations for tourism, which means that Mongolia is able to compete in the global tourism market. Now we just need to realise these actions, to ensure sustainable socio-economic development and make the tourism industry a pathway for national development.
Air transportation will definitely be the first choice of foreigners to travel to Mongolia. So, I would like to underline the air transportation sector. The Mongolian Airlines (MIAT), the national flag carrier, is no longer making up 54 percent of the air transportation market of Mongolia. Now it has reduced to 47 percent, which means the private sector is coming into the air transportation sector in the country. Several actions should be taken to promote open competition among companies, to make ticket prices cheaper and to widen market choice. We must exploit our geographical location as a shorter line between Asia and Europe.
Apart from MIAT, Mongolia has very few airlines such as Aero Mongolia and Hunnu Air. Furthermore, the ticket price is still too expensive, affecting the development of the tourism sector in Mongolia,” the Prime Minister said.
A suggestion was proposed by N.Enkhbaatar, a Deputy Director of MIAT on getting the Mongolian air transport potential and tariffs normed with international standards. He said, “MIAT has not changed its fares since 2011, and we even reduced the fares by six percent. Due to the rate of inflation, the price soared by about 70 percent because the ticket price is based on the US dollar exchange rate. Over 30 percent of the cost belongs to fuel, thus if we can find the possibility to reduce the fuel costs, the ticket price could be reduced.”
The number of passengers travelling by MIAT was over 790 thousand in 2016, and it increased by 22 percent in 2017, whilst freight transport increased by five percent. N.Enkhbaatar said. “The company plans to expand its fleet with four new Boeing 737 MAXs by 2020. When the new international airport opens in Khushig Valley, the number of flights and frequency will increase further” he added. It has been calculated that when the air transport sector is liberalized, the ticket price will decline by 20 percent, while the international freight will increase by 62 percent and local flights—by 43 to 87 percent.
Railway transportation could be crucial to the flow of tourists travelling to Mongolia from western European countries and neighbor countries such as Russia and China, said Kh.Amgalan, a Deputy Head of the Ulaanbaatar Railways joint stock venture. He said, “Although up to 15 thousand passengers can travel by the Ulaanbaatar railways a day, the capability is not fully loaded. Only 6-7 thousand people travel by train a day. So, we have lots of plans to increase the number of railway passengers and to purchase new trains.”
Like many other countries, buses and rented cars are the main vehicles in Mongolia for domestic travel and tours to beautiful landscapes. A group of tourists mostly choose buses, while renting a car is commonplace for one or a couple of tourists. As for Mongolia, roads and their quality are important to develop domestic tourism.
According to statistics, 137 enterprises were engaged in tourism transportation in 2016, but this number was almost the same in 2017. Moreover, the number of foreign tourists to Mongolia was more than 470 thousand in 2012, 386 thousand in 2015, and over 400 thousand in 2017. A decline happened between 2012 and 2015 and this was caused not only by weak development of the infrastructure, but also by poor services for tourists. Thus, it is important to improve the connectivity and cooperation within the sector.
Some participants pointed out that Mongolian natural landscapes such as high mountains and rocks could be the best environment for adventurers and backpackers. Risky and challenging roads in the countryside can be a fun and memorable experience. As the number of backpackers tends to increase, new routes for backpackers will be created in localities. But some people claimed that backpackers are not beneficial to the national economy.
Source: Invest Pro Mongolia #2 (2018)