Analyse of the sector 30/11/2010
Turkmenistan feels secondary effects of the global financial crisis

As one of the most autonomous nations on earth, Turkmenistan does not have any significant financial interaction with the rest of the world, and consequently claims to have avoided the global financial crisis. This however cannot be said for the nation’s tourist source countries, which cut back on travel, particularly to expensive destinations such as Turkmenistan. Although growth in arrivals was evident in 2009, the rate of growth was significantly slower.

 

The Avaza Tourism Zone opens but sees few tourists

 

The Avaza Tourism Zone, an area specifically allocated for beach resorts, opened for business in 2009 with six completed hotels and a further 60 hotels to be constructed, including one on an artificial island. Although some of the country’s harsher visa restrictions have been relaxed for the Avaza Tourism Zone, tourists do not seem to be flocking to this “tourist paradise” and instead, Turkmen workers are being forced to have their holidays there. Equally concerning is that no international hotel chain has claimed to be interested in investing in the project.

 

Business tourism remains dominant

 

With leisure tourists discouraged from visiting Turkmenistan due to an unfavourable visa regime, business tourism continued to be the dominant reason for travel to Turkmenistan in 2009. Most business tourists visit the country with an interest in Turkmenistan’s natural gas reserves. Since all international business in Turkmenistan needs to go through the government’s ministries, such business travel is almost exclusively done in the capital city of Ashgabat.

 

Fuel price increases have little impact on domestic travel and tourism

 

Some of Turkmenistan’s natural gas resources were provided for free to the country’s citizens earlier in the review period, with the cost of domestic travel, whether by bus or plane, also very low. This situation weakened in 2009 when the subsidy was decreased, and both airline and bus transport prices increased. Turkmen citizens still enjoy cheap fuel compared to the rest of the world however, and with the country’s rising standards of living, the impact of the fuel price rise on the domestic travel and tourism industry was minimal.

 

Forecast growth is reliant on future freedom

 

Whether for business or leisure travel, the Turkmen travel and tourism industry is reliant on further opening up to the outside world. The industry’s success is dependent on simpler visa procedures and making it easier for domestic tour operators to start up businesses. Without such reforms, it is unlikely that tourism in Turkmenistan will reach its full potential in the forecast period.