Tourism Clusters, Domestic Tourism, and RVs

By Julian Dierkes

When I actually visit Mongolia (not often enough, but 1-4 times/year over past dozen years or so), I have many conversations where I learn more and more about Mongolia, but that also raise other questions. If I lived here, I might have to turn the blog into a daily thing!

In August, I had such a conversation with Marc Tassé, longtime resident director for the American Center for Mongolian Studies and now, country director for Czech People in Need. This conversation was followed by a meeting with a long-time Twitter connection, Jochen_mn, who works in the Mongolian tourism industry.

Diversification

Mongolia is part of a “generation” of emerging resource economies that are acutely aware of the risks of growth built on natural resources. Diversification of the economy has thus been a topic of conversations for some years.

There are many different proposals, some focused on manufacturing with or without links to natural resources, some on transport and infrastructure, or alternative energies, but among the possible avenues of diversification that seem to come to everyone’s mind are cashmere and tourism.

Tourism is seen as a potential area for comparative advantage for Mongolia. Beautiful nature, including fresh air (well, outside of cities and towns in the winter), close proximity to huge Asian markets, reachability for European markets, unique nomadic history, strong brand suggesting pristine nature but also “exoticness”… that sounds like a winning formula.

Challenges

But there are some clear challenges to the development of the tourist industry: short tourist seasons and – linked to that – lack of infrastructure.

With May bringing unsteady weather, June often bringing rain, it is primarily July-August that tourism is most attractive in Mongolia. That is, of course, also the time that Mongolians travel themselves. Even counting shoulder seasons, the summer tourist season is thus no longer than three months.

While some winter tourism is imaginable (there are already winter horseback treks on offer, one could imagine cross-country treks for snowy areas…), ultimately, -30º puts a real damper on travel plans.

Given the lack of accessible “destinations” (so often, the journey is the destination in travelling in Mongolia), mass tourism is hard to imagine, even if some would find it desirable for economic reason.

If it is niche, luxury travel where the opportunities lie, this may generate some revenue, but it will not really generate many steady, high-paying, professional jobs for which there are many young educated Mongolian candidates.

Growth of Domestic Tourism

When I was travelling in Arkhangai in June 2017 I noticed for the first time that domestic tourism was picking up significantly. I had begun hearing about countryside travel not for visiting relatives from Mongolians over the past several years, but in Arkhangai last year, it was noticeable that some infrastructure was beginning to spring up specifically targeting domestic tourists. Prices at ger camps have long differentiated between foreign and Mongolian visitors, but that distinction is now reinforcing the sense that the number of domestic visitors may be increasing. While international visitors are increasingly being served some variant of “international” food (it seems like it is hard to find ger camps now that will serve mutton noodle soup, though many visitors will not mourn that fact), camps are clearly catering more to domestic visitors by allowing options for “self-catered” visits.

One factor in the expansion of domestic tourism obviously is the expanding network of paved roads. A tourist destination like Khuvsgul Lake (Khuvsgul is one of four aimags that I have not visited) can actually be reached in a day’s drive now, meaning that domestic tourists can consider a four-day trip to Khuvsgul, for example. By all reports, visits to Khuvsgul and construction of touristic infrastructure there are booming.

Another, more nebulous factor in the growth of domestic tourism may be Mongolians’ changing relationship with nature. For Ulaanbaatarites/Red Heroes their appreciation for the countryside as a leisure destination rather than an economic basis may thus be growing, fuelling some domestic travel habits.

Opportunity: Tourism clusters

One way to enable growth of tourist infrastructure would be to focus on regional concentrations, or tourist clusters. In many ways, such clusters are already emerging around the most well-known destinations in the Gobi like the “flaming cliffs”, etc.

But other clusters are imaginable. For example, when the new Ulaanbaatar airport begins operation in 2019 (presumably, and I rue the day), the 400km drive from there to Kharkhorin and the Orkhon Valley, will avoid Ulaanbaatar and its traffic. The relative lushness and beauty of summertime Arkhangai will be under 500km away on paved roads, again avoiding Ulaanbaatar, so a Kharkhorin-Orkhon-Tsetserleg cluster might become that much more viable.

Mendee and I have begun talking and writing about a Nalaikh Interactive Mining Museum. That could be at the centre of a tourism cluster formed with the Chinggis statue and Terelj. Nalaikh would also benefit from the new airport which would be an hour’s drive, again avoiding Ulaanbaatar by coming via Zuunmod.

Opportunity: RVs

Another opportunity that would be interesting to consider would be RVs. This idea is inspired by my regular drives through BC, the Yukon and Alaska. In the Canadian North, the tourism industry includes RV rentals as a very strong element, seemingly attracting tourists from Europe in particular. Many campgrounds in the Yukon, for example, routinely fly the German and Swiss flags next to the Canadian flag, pointing to the origins of many of their visitors. RV travellers are somewhat more self-sufficient than other visitors, of course, thus requiring significantly less infrastructure. Gas stations are common across the Mongolian countryside, so RVs would only require additional infrastructure in the form of electricity and septic hook-ups in some reasonable intervals, and perhaps larger supermarkets with a greater variety of goods than is on offer in most soums to allow RV travellers to supply themselves with foodstuffs.

However, RVs do not really extend the season for tourism to Mongolia much, so they would be subject to a similar restriction in terms of the timing of visits. That suggests that the significant investment into RVs to rent would have to be recouped in a short season.

The alternative would be mimicking a North American pattern where RVs that are rented in Alaska, for example, during a season that is no longer than Mongolia’s, are moved to California for the Fall, Winter, and Spring months to maximize their utilization.

Are there regions of Southern China where RV-use could grow? Are they touristically attractive enough for 8 months of the year or so?

Conclusion

While tourism to Mongolia likely will grow, this growth does seem quite limited, so I do not really think of the tourism industry as a sector that will massively contribute to a diversification away from the mining industry.

Nevertheless, tourism should certainly be part of the mix in considering Mongolia’s abundant resources (for example, fresh air, sunshine, cold, open landscape) strategically.

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