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Investing Into Tourism And Hospitality

The fact that Kyrgyzstan has practically inexhaustible recreational resources becomes apparent to anyone who attempts even a very short trip around this country.

The author of this post has fallen forever in love with Kyrgyzstan when going on his first trip outside of its capital. It is absolutely evident that the beauty of Kyrgyzstan has a strong attractive force.

If we dwell upon a more material matter, and that is whether it makes sense investing into the tourism industry here, my remarks below may be of value.

«Five star tourism»

Kyrgyzstan as a tourist destination is in some way caught in a vicious circle.

On the one hand, its tourism infrastructure is not developed to high international standards and that is the reason why the main mass of travelers who come here are low income tourists. There are many Europeans focused on ‘eco-tourism’, alpine climbing enthusiasts and downshifter-style pensioners traveling along the trail of «The Great Silk Road». When I go around the country I often meet travelers of European looks storming 3000 meter high mountain passes on their bikes… They clearly travel on a shoestring and do not contribute much to the local service sector.

On the other hand, the popularity of the country only among the lowest income class travelers determines the local travel industry’s lack of investment: there is simply not enough money to develop it to the highest standard. Investors are careful: what if the hotel or recreational camp does not pay off?

In my opinion, this situation is a classic business opportunity for an investor willing to risk, but risk sensibly.

A good demand exists internationally for high class travel experiences among the wild and beautiful nature. A wealthy traveler wishing to enjoy natural beauty, needs comfortable accomodation, security and entertainment.

Of course, this depends not on one single recreational unit, but also on the infrastructure surrounding it.

But nevertheless. The one who will manage to «package» the Kyrgyz natural beauty into a five star wrapper, has a chance of reaping a good business reward.

Creative ideas

Another possible way to make money in the tourism industry in Kyrgyzstan is to develop a creative idea — something previously unexplored in the travel industry, but very finely built into the strong feature of Kyrgyzstan, and that is its natural beauty.

It is hard for me to offer here anything specific, because I have not attempted to brainstorm this matter too extensively. It is just a feeling that in such an incredibly beautiful country there should be a tourist product available which transcends the bounds of the classis formula: beach-hotel-shopping-entertainment.

There are absolutely no theme hotels which would combine high quality B&B with a single entertainment theme (paintball in the wild mountain canyon? water sports? anything else?)

There is an abundance of springs with healing properties (radon, natural salts, hot springs etc.) which are visited by health-seekers from around the world, but so far no-one has attempted to build normal infrastructure there and charge serious money from the VIP patients. And invest into making these medicinary opportunities known internationally.

Ski tourism

There are a couple of dozen ski bases in Kyrgyzstan, most located not far from Bishkek. There is only one base which could qualify as a ski ‘resort’ — the Karakol base (400 km from Bishkek).

The problem of all these bases is their obsolete equipment and low quality service (with regards to service I will make an exception for Karakol and a small base not far from Bishkek called ZIL).

To an investor interested in developing a good ski base in Kyrgyzstan there is an easy way to minimize the risk. You can first agree with the owners of any one ski base to rent it to you for a couple of seasons (most will agree) and then experiment there (without investing much) with different service packages. You can use this time to think of a resort concept and test various pricing models. Then you can decide if this business merits a bigger investment.

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