Zeroing in: The state is planning to invest in a handful of niche segments

In a speech delivered at the most recent Mongolian Economic Forum, held in Ulaanbaatar in March 2013, Ts. Oyungerel, the minister of culture, sports and tourism, announced that the government was in the early stages of a plan to develop “special interest tourism” in a handful of key areas, with the long-term goal of boosting the sector’s overall contribution to GDP. Oyungerel identified a number of niche tourism segments that would likely benefit from government support in the coming years, including historical and cultural, religious, nature and wildlife, sports and adventure, and dinosaur-related. While many local private companies already offer tours and other activities in these areas, the minister’s announcement that public sector financing would be put towards tourism signals a major policy shift. Until the mid-2000s the development of the tourism industry in Mongolia was primarily driven by the private sector. “The government has only been focusing on tourism for the past four to five years,” B. Indraa, the director of the governing board of the Mongolia National Tourism Organisation (MNTO), an industry association, told OBG. “This is a sign of the rapidly changing tourism paradigm in Mongolia – people are realising that it has the potential to be a major economic contributor.”

Shifting Policies

Until the fall of the Soviet Union, state-controlled firm Juulchin had a monopoly on tourism in Mongolia, primarily handling visitors from other Soviet-bloc countries. From 1991 to the mid-2000s the government worked to privatise the economy, with a focus on mining, agriculture, industry and a handful of other sectors. During this period the state published various tourism-related regulations, including a 1998 law that relaxed visa restrictions considerably, setting the stage for the rapid growth of the industry. Since 2000 the government has overseen the development of various plans to support the expansion of tourism, but a lack of continuity between successive administrations has prevented any one strategy from being carried out in full. Since the establishment of the state’s first tourism department in 2004, governments have shifted responsibility for tourism between various other ministries, including those dedicated to roads and transport, and nature and environment. Since the current government took power in 2012, the tourism industry has fallen under the purview of the newly established Ministry of Culture, Sports and Tourism (MCST).

Rising Interest

Until 2008 tourism was not a major growth driver. However, rising visitor numbers and, consequently, tourism-related revenues have since resulted in the establishment of a number of large-scale government-led projects to develop the industry. Broadly, these initiatives have been aimed at marketing Mongolia at international conferences, and improving data collection and reporting, in an effort to ascertain the industry’s economic impact.

While these objectives are considered to be a necessary component of building Mongolia’s reputation as a major tourism brand and destination, many local players have argued that the government should do more to support the sector.

“The government needs to work to facilitate investment in the industry,” G. Damba, chairman of the Sustainable Tourism Development Centre, a local organisation, told OBG. “Additionally, they should work to develop – and, importantly, implement – a national tourism development plan.”

Historical & Cultural

Mongolia’s cultural heritage is one of its most important tourism assets. The country has a rich and varied history. Indeed, visitors travel to the nation to experience a wide range of traditions, including Buddhist ceremonies; Soviet-era customs; nomadic rituals; and others that can be traced back to the time of Chinggis Khan and the Mongol empire, which stretched across much of the known world in the 13th and 14th centuries. Much of this culture goes on display during the National Naadam Festival, which takes place every July in Ulaanbaatar, and benefits from considerable financial support from the government. The festival, which showcases traditional Mongolian wrestling, horsemanship, archery and other activities, attracts a considerable number of tourists to the capital.

Festivals

In an effort to bring in more visitors, particularly during the winter low season, a number of private local tourist organisations have organised other festivals in recent years. In March 2013 Oyungerel announced that the government planned to oversee the development of a set calendar of annual cultural events and festivals, which was expected to include the existing Ice Festival, the Golden Eagle Festival and the Mongolian Camel Festival, among others. According to the MCST, the creation of the calendar would likely result in a jump in state financing for these other festivals (see analysis).

Since it joined the UN Educational, Scientific and Cultural Organisation (UNESCO) in 1992, the Mongolian government has worked to register key historical destinations as World Heritage Sites. The 121,967-ha Orkhon Valley Cultural Landscape, located 360 km south-west of the capital, was added to the list in 2004. Archaeological work has dated human activity in the area to more than 60,000 years ago, and has traced the rise of a wide variety of nomadic and semi-nomadic cultures, including the Huns, a number of Turkic civilisations, the Uighurs and, eventually, the Mongols. The Orkhon Valley is also home to the remains of the city of Karakorum, the capital of Chinggis Khan’s Mongol Empire; and Erdene Zuu, the earliest surviving Buddhist monastery in the country. In 2011 the Petroglyphic Complexes of the Mongolian Altai – which includes rock carvings and funerary monuments that date back to 11,000 BCE – became the second heritage site in Mongolia.

In addition to these two World Heritage Sites, the country boasts nine entries on UNESCO’s intangible cultural heritage list, including the Naadam Festival itself; traditional hunting practices, which make use of golden eagles; a variety of traditional musical techniques, including circular breathing and overtone singing; and traditional forms of dance.

Religious

Though the state was officially atheist during the Soviet period, Mongolia has a lengthy religious history. While Buddhism dominates the country today, during the Mongol Empire a wide variety of religions were practised among various communities, including Buddhism, Christianity, Islam and traditional local shamanism. Shamans continue to play an important role in the lives of many Mongolians today. The nation’s rich religious heritage is widely expected to play a key part in the tourism industry in the coming years.

Great Outdoors

Both cultural and religious tourism go hand in hand with development of the nature and wildlife segment. With only around 3m inhabitants as of the end of 2012 – some 30% of whom are nomadic – the great majority of Mongolia’s 1.57m sq km is largely empty. The country’s wildlife and vast remote areas – many of which cannot be accessed by car – are major tourism assets.

With this in mind, hikers, photographers, birdwatchers and other nature buffs could jointly make up a major market for the country. Similarly, Mongolia’s natural resources mean it is well positioned to become a major destination for trekking, backpacking, camping, climbing, horseback riding and other outdoor adventure sports. “The soft adventure market is key,” D. Altanbagana, the executive director of local operator Active Adventure Tours Mongolia, told OBG. “Hiking in remote areas is very popular among visitors from the West, for example.”

Ancient Beasts 

One niche area of focus for tourism development in Mongolia at the moment is in the dinosaur-related segment. “Since the discovery of dinosaur eggs in the Gobi Desert by Roy Chapman Andrews 90 years ago, the Gobi has been known to possess one of the largest collections of dinosaur fossils worldwide,” Oyungerel told local press in mid-2013. “International expeditions take place annually to search for dinosaur fossils among the desert’s sandstone buttes and dunes.” Currently only a handful of companies offer tours specifically geared to visitors interested in dinosaurs. The segment is widely expected to grow in the coming years, however.

In May 2013 Mongolia made international news when the US government returned a 70m-year-old Tyrannosaurus skeleton that had been smuggled out of the country and sold at auction in New York the previous year. The skeleton – known as Tyrannosaurus Baatar – is expected to eventually go on show at a new museum dedicated to displaying Mongolia’s fossil collection. The facility, which will be called the Central Dinosaur Museum of Mongolia, was announced by the government in 2013 and will house most of the country’s 500-odd dinosaur skeletons. At present many of these fossils are in storage or on display at the Natural History Museum or the Paleontological Centre at the Academy of Sciences.