Better connections: Improvements to infrastructure allow for greater accessibility

Infrastructure is one of the hot topics in Mongolia and with good reason – noticeable improvements have been made in recent years, and considerable investments are ongoing. The tourism industry is no exception, intricately linked as it is to the transport sector.

ROADS: For its size, Mongolia has a relatively small network of paved roads – around 1500 km according to the World Bank – reflecting demography and the priority that was given to transnational transportation and the mining industries during the Communist era.

While the road network is still under development, tourism operators are relatively happy with the progress made. According to J. Batbold, the owner and president of Selena Travel Group, “The road-building campaign of the past 10 years has been a big success, and we are satisfied with the results. There are now roads to most major tourist sites and a lot more is being done.”

While guidebooks can emphasise the difficulties of getting around by road, Helge Reitz, the managing director of Ulaanbaatar-based Nomads Tours, points out that the importance of ground transportation to tourism should not be over-emphasised, as tourists tend to fly longer distances, such as the 1700 km between Ulaanbaatar and Olgii, which takes at least two days by road.

CONNECTIVITY: One of the biggest challenges is the paucity of connectivity to other countries. As of late-2011, there were direct flights to Ulaanbaatar from fewer than 10 foreign cities. Most visitors arrive through Moscow, Beijing or Seoul, often with long layovers. According to T. Chuluunkhuu, the director of Air Trans, a Mongolian airline ticketing agency, “The sector is limited as we have little room to increase sales because of low airline capacity and few international connections. MIAT (the national carrier) must increase capacity for the sector to grow. The good news is that it has risen by almost 30% for the past nine months.”

MIAT’s launch of direct flights from Hong Kong in June 2011 is widely considered to be an important step for both business and leisure tourism. Hong Kong is a base for many potential Chinese and international investors, and its affluent population is an ideal market for high-value tourism offerings. Aero Mongolia and Eznis Airways also offer international flights, while the Bodi Group’s Mongolian Airlines currently offers domestic flights and is expected to launch international service during the summer of 2012.

The development of a new airport at Ulaanbaatar is expected to provide a welcome fillip to tourism. In May 2011 the local press reported that Mongolia had arranged a $270m soft loan from Japan for the construction of the new airport, which should be completed by 2015. B. Indraa, the director of the governing board of the Mongolia National Tourism Organisation, told OBG that flight capacity will rise rapidly, thus increasing competition and bringing down costs. “Over the next two years we believe that airlift capacity will rise by 40% and price per ticket will fall by 20%,” Indraa said.

Meanwhile, a 2010 study by the Economic Policy and Competitiveness Research Centre suggests that greater air transport liberalisation would bring big rewards for tourism, reaching 117,000 extra visitors per year and MNT123.1bn ($96.02m) in extra revenue.

REGIONAL CENTRES: In such a vast country, regional airports play a vital role in transport and tourism. While Chinggis (Genghis) Khaan is by far the most important international airport, Olgii Airport in the western aimag, or province, of Bayan-Olgii has connections to Almaty, Kazakhstan. Choibalsan, located in Dornod aimag in the east, has flights to the Chinese city of Hailar. Khovd Airport in the western aimag of Khovd has occasional flights to Urumqi in China. These regional airports play an increasingly important role in tourism development. Capacity of these regional chartered flights remains limited, however, with higher investment required to expand airstrips and purchase larger aircraft for these routes.

“The growth of regional airports, particularly those with international connections, is a big advance,” Batbold told OBG. Double-tracking the Trans-Mongolian Railway would also increase visitor volumes, given the number of tourists who also arrive by rail, he added.