Imagine an opportunity to turn the clock back and invest in the developing tourism sector in Switzerland 60 years ago. A time when investments were reasonable, and investors were afforded significant returns on investment. Now fast forward to the Kyrgyz Republic. Kyrgyzstan has on numerous occasions been referred to as the Switzerland of Central Asia and this comparison is not with good reason. The countries share similar topography, both being landlocked countries at the heart of their respective regions, with a majority of mountainous terrain. Kyrgyzstan also shares much of the natural beauty of Switzerland.
Kyrgyzstan is a new country. About to celebrate its 25th Anniversary of Independence, tourism is just beginning to grow. Statistically, Kyrgyzstan lags behind global norms. As a member State of the United Nations World Tourism Organization, it experiences 4.1% economic contribution from the tourism sector versus a global average of 9.5% of contribution to Gross Domestic Product. Similarly, if one compares another country with similar topography, New Zealand, the economic contribution of tourism jumps to 17.4%. Thus the Kyrgyz tourism industry has strong potential for growth. And with what is termed “feeder markets” or sources of tourist growth from India and China, the two largest markets in the world, the industry in its current form has a long term shortage of necessary infrastructure. With warming political and economic ties as well as direct air links with its two large neighbors, there is now the ability to tap into markets that are three billion people strong.
Issyk-Kul Lake is the tenth largest body of water by volume and the second largest Alpine lake in the world. With the surrounding mountains, this makes for an alpine wonderland and the area has been designated as a UNESCO Biosphere for its diversity. At present, the lack of infrastructure provides a limited season for the tourism sector, but this is changing rapidly with projects aimed at prolonging the season in a sustainable fashion.
One priority at present is to develop the Issyk-Kul Region. With Tamchy Airport recently commencing operations and Karakol Airport under re-development, the area now can accommodate air links with regional markets. With international funding, facilities continue to evolve, increasing the connectivity of people and businesses to local and global services, markets and opportunities across borders. First and foremost is the development of the facilities for the World Nomad Games. These facilities comprise of an internationally rated Hippodrome, with a track designed and constructed by French experts; and the Gazprom Sports and Convention Centre, which incorporates Kyrgyzstan’s largest pillar-less ballroom, capable of facilitating functions of up to 700 guests. Privately funded, these facilities are a start to developing the Region to its fullest potential. The sporting facilities are the first phase of world class venues for year round training for international sports teams.
The focus of the Complex will be the Convention Centre. With MICE business (Meetings, Incentive, Conference and Exhibition) growing and ever-seeking new and exotic locations, Issyk-Kul fits this requisite perfectly. Already bookedprior to opening is a Global Economic Forum for May 2017 with an attendance of 350 global Chief Executive Officers planned, including multiple billionaires and Senior Heads of State, organised through the world-renowned, Horasis – The Global Visions Community, an economic think tank based out of Switzerland whose Forums have been called a mini-World Economic Forum by the New York Times. This conference will present the opportunities of Kyrgyzstan as a gateway to the Eurasian Economic Union and Russia, and will place the area on the map for foreign direct investment.
One of the largest infrastructural projects in the region is the Issyk-Kul Water Park and Hotel Complex. Being developed by BHI Hotels in conjunction with Russian based Kvarsis Group and Kyrgyz property developer, Premium Developments, the Complex will provide Cholpan-Ata, the main town on the North Shore of Lake Issyk-Kul with year round tourism facilities. The centerpiece of the development will be a 22,000 square metre enclosed water park with adjacent 100 room three star international branded hotel, thermal centre and spa with a total built up area of 35,000 square metres. Located in the vicinity of the Hippodrome, the development will provide synergy to the operations of the conferencing facilities of the Sports and Convention Centre. Further east, near the provincial capital of Karakol, is the planned Karakol Ski Cluster consisting of five international standard ski resorts. As skiing and snowboarding become more popular in the Region, the Ski Cluster will afford extensive pistes over several mountains in scenery that rivals the best of Europe. Utilising the latest European technology, and with the re-development of the Karakol Airport, the area will be a new destination for the winter sports markets of both Europe and South East Asia.
With an aggressive long term strategy from the Department of Tourism under the Ministry of Culture, Information and Tourism, there is a positive dynamic between the public and private sector emerging. Tourism development-friendly policies are making this the opportune time to invest in not only the Issyk-Kul Region, but Kyrgyzstan as a whole. The government has set the sector as an economic priority and understands that sustainable economic development will be strongly enhanced through growth of Tourism and preservation of environmental resources. Investors have strong support through the Investment Promotion Agency under the Ministry of Economy as well as a number of international consultancy and law firms which guide the investor through the processes. Thus Kyrgyzstan is ripe for investment.
About the Author:
Stiphan Beher heads the Hotel and Lodging Association of
the Kyrgyz Republic and serves as Chairman of the Tourism
Committee under the International Business Council as well as
Advisor on Foreign Direct Investment to the Presidential Affairs
Office of the Kyrgyz Republic