Responsible Winter Tourism in Kyrgyzstanpdf

MARKET SYSTEMS DEVELOPMENT FOR DECENT WORK MARKET SYSTEMS DEVELOPMENT FOR DECENT WORK

RESPONSIBLE WINTER TOURISM IN KYRGYZSTAN FEASIBILITY AND MARKET SYSTEM ANALYSIS

MARKET SYSTEMS DEVELOPMENT FOR DECENT WORK MARKET SYSTEMS DEVELOPMENT FOR DECENT WORK

First published 2017

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Printed in Switzerland CONTENTS

EXECUTIVE SUMMARY ...... V

1 INTRODUCTION ...... 1

2 METHODOLOGY ...... 3

2.1 A market systems approach to responsible winter tourism development ...... 3

2.2 Skill-will framework for stakeholder analysis ...... 6

2.3 Research process ...... 6

3 THE WINTER TOURISM MARKET ...... 7

3.1 An overview of the winter tourism market ...... 7

3.2 The current market segmentation: mass tourism vs. niche tourism ...... 8

3.3 Winter tourism supply ...... 10

3.4 Winter tourism demand ...... 16

3.5 Potential employment contribution of winter tourism . . . .17

4 STAKEHOLDER ANALYSIS ...... 21

4.1 Most relevant winter tourism market stakeholders . . . . .21

4.2 Skill-will assessment ...... 30

5 REVIEW OF RELEVANT WINTER TOURISM DEVELOPMENT PROJECTS IN KYRGYZSTAN ...... 31

6 MARKET SYSTEM ANALYSIS ...... 35

ANNEXES ...... 55

ANNEX 1: REVIEW OF SKI BASES AND FREERIDING DESTINATIONS ...... 55

ANNEX 2: SKI DESTINATIONS MAPS ...... 59 ACRONYMS

BFEA Bishkek Financial Economic Academy KCBTA Kyrgyz Community Based Tourism Association BfS Swiss Federation’s Bundesamt für Statistik KMGA Kyrgyz Mountain Guides Association CBT Community Based Tourism KGS Kyrgyz Som CIS Commonwealth of Independent States SECO Swiss Secretariat for Economic Affairs DFID United Kingdom’s Department for International TUK Trekking Union of Kyrgyzstan Development UNIDO United Nations Industrial Development DMO Destination Management Organization Organization DOT Department of Tourism UNWTO United Nations World Tourism Organization GDP Gross Domestic Product USAID BGI United States Agency for International IFMGA International Federation of Mountain Development’s Business Growth Initiative Guides Associations USD United States Dollar ILO International Labour Organization VSTM Verband Schweizer Tourismusmanager or Swiss IPA International Promotion Agency Association of Tourism Managers ISIA International Ski Instructor Association WTTC World Travel and Tourism Council KATO Kyrgyz Association of Tourist Operators Executive summary

The Swiss State Secretariat of Economic Affairs (SECO) commissioned the International Labour Organization (ILO) to conduct a feasibility study to assess the market potential of initiating a future Responsible Winter Tourism Development Project in Kyrgyzstan. With this project SECO aims at enhancing employment opportunities and reducing poverty along the tourism value chain, while increasing the competitiveness of this industry in Kyrgyzstan and abroad.

The tourism sector has increasingly become an important part of Kyrgyzstan’s economy and is expected to grow in size in the upcoming years. While the labour market has slightly benefited from this increasingly relevant sector the country has failed to capitalize on the potential benefits the sector could bring to create more and long-lasting jobs for its population. Kyrgyzstan faces an unemployment problem, which particularly impacts its youth. With an 8.6% general unemployment rate1, underutilization of the youth labour potential remains a concern at top. Youth unemployment rate stands at 15%2, which explains that large parts of the population resort to emigrating in search of job opportunities. As such, the issue of outward labour migration keeps impacting Kyrgyzstan, with approximately 12% of Kyrgyz working abroad, of which the majority are youth3.

In light of this problematic, a previously held report in 2016 deemed the winter tourism market as an opportunity to provide employment and growth opportunities for Kyrgyzstan. A research team, in charge of the feasibility study, conducted a desk review complemented by a field visit to probe this hypothesis and concluded that there is enormous market potential to develop the winter tourism in Kyrgyzstan in a sustainable way. This is based on the growing demand for specific winter tourism products and services, mainly classical skiing (ski bases) and freeriding and ski touring experiences, of which Kyrgyzstan offers a solid

1. Rate reported for the year 2014. UN Data Information. Please consult: http://data.un.org/CountryProfile. aspx?crName=Kyrgyzstan 2. ILO Stats for Kyrgyzstan, rate reported for the year 2016 3. IMF. (2014). Report for selected country groups and subjects, available on : goo.gl/ogEi23

v Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

experience. Complemented by an attractive mountainous geography and cultural experiences, the winter tourism market offers an attractive proposition to both international and national tourists.

Nevertheless, the study also found a series of systemic constraints that inhibit the sustainable development of this sector, while it also pointed out at a set of market opportunities and actors with whom the project could partner to achieve an impactful and beneficial change. The following are the key systemic constraints to the development of the winter tourism market:

■■ Shortage of qualified ski-instructors and guides with appropriate technical and methodological knowledge due to the absence of formal ski instructor certification and training opportunities;

■■ Lack of affordable access to winter sport and security equipment for instructors due to poor linkages between community-based ski instructors and ski equipment providers;

■■ Poor winter tourism product development and marketing skills due to the inadequacy of existing training and knowledge exchange offers;

■■ Conflicts between the ski business community and local populations and lack of tourism awareness of parts of the population due to the absence of effective resolution bodies and dialogue mechanisms;

■■ High number of accidents and risks at ski destinations due to the absence of safety standards and national safety information providers;

■■ Lack of effective coordination among tourism businesses and relevant stakeholders in destinations due to DMOs with unsustainable financial and business plans;

■■ Insufficient activities and prioritization of the tourism industry by the national government reflected by the lack of a national winter development strategy and of a national marketing strategy;

■■ A very weak tourism system all over the country and lack of a tourism network; ■■ Lack of winter tourism relevant data, figures and facts due to the absence of efficient registration processes and unskilled Ministry staff. The study concludes by outlining a set of potential market-driven solutions and project interventions which form the basis of a future project. This project is detailed in a further project document developed for SECO.

vi 1 INTRODUCTION

Kyrgyzstan is one of SECO’s partner countries for economic development and cooperation. As such, SECO is currently exploring its future trade promotion project portfolio in Kyrgyzstan. To support this process SECO has commissioned the International Labour Or- ganization (ILO), in collaboration with the Institute of Tourism of the Lucerne University of Applied Sciences (ITW), to assess the market potential to initiate a Responsible Winter Tour- ism Development project in Kyrgyzstan. If deemed feasible this project is planned to start in 2018 through approximately four years. With this project SECO aims at enhancing employment opportunities and reducing poverty along the tourism value chain, while increasing the competitiveness of this industry in Kyrgyzstan.

The tourism sector is recognized by the Kyrgyz Government as one of the key sectors for the economy. According to the World Travel and Tourism Council (WTTC) the share of tourism in the country’s GDP was about 3.9% in 2016. A total of 89,500 jobs are created by the tourism industry, which accounts for 3.7% of total employment in Kyrgyzstan. This puts the country on rank 166 out of the 185 countries investigated4. Considering the number of unique attractions and natural resources, the tourism sector has high economic potential. However, the magnitude of this potential is yet to be analysed not only in terms of competitiveness but also in terms of its sustainability.

The sector has increasingly become an important part of Kyrgyzstan’s economy and is expected to grow in size in the upcoming years. While the labour market has slightly benefited from this increasing relevant sector the country has failed to capitalize on the potential benefits the sector could bring to create more and long-lasting jobs for its population. Kyr- gyzstan faces an unemployment problem, which particularly impacts its youth. With an 8.6% general unemployment rate5, underutilization of the youth labour potential remains

4. Turner, R. & Freiermuth, E. (2017). Economic Impact 2017 Kyrgyzstan. United Kingdom: World Travel & Tourism Council (WTTC). 5. Rate reported for the year 2014. UN Data Information. Please consult: http://data.un.org/CountryProfile. aspx?crName=Kyrgyzstan

1 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

a concern at top. Youth unemployment rate Based on this assessment and the current stands at 15%6, which explains that large state of the tourism industry this feasibility parts of the population resort to emigrating report is set out to identify and assess key in search of job opportunities. As such, the market potential for a suitable responsible issue of outward labour migration keeps winter tourism project led by SECO8. The impacting Kyrgyzstan, with approximately present report is based on a desk research 12% of Kyrgyz working abroad, of which the and a field visit, where potential project sites majority are youth7. where also visited and approximately 30 stakeholders were interviewed. In light of the abovementioned problematic, the tourism sector, among others, has been The feasibility report is structured as fol- judged with potential to provide employment lows. Chapter 2 will give a short descrip- for the youth. An assessment carried out by tion of the methods and approaches ap- SECO in 2016 concluded that the tourism plied. Chapter 3 reviews the current state sector in Kyrgyzstan reached a significant size of the winter tourism market in Kyrgyzstan. and has a potential to provide employment op- Chapter 4 will present a comprehensive portunities. Furthermore, this concluded the description of relevant stakeholders and sector has potential to set up demand-driven their interrelationships in Kyrgyzstan, in- project interventions, involving the participa- cluding a skill-will assessment of the most tion of external actors in partnership with local relevant stakeholders. This is followed by a stakeholders on various levels. In particular, review on existing winter tourism develop- the assessment recommended supporting ment projects and initiatives in Kyrgyzstan selected value chains of the tourism sector, as described in Chapter 5. The report con- preferably in winter tourism, as it is regarded cludes by outlining the most relevant con- to have excellent market growth and job crea- straints to the sustainable development of tion opportunities and it provides a seasonal- winter tourism, their root causes and po- ity break, which makes it complementary to tential solutions and project interventions other income-generating activities. (Chapter 6).

6. ILOStats for Kyrgyzstan, rate reported for the year 2016 7. IMF. (2014). Report for selected country groups and subjects, available on: goo.gl/ogEi23 8. SECO (2017). Terms of Reference: Lead consultant to conduct feasibility study and write project proposal for a winter tourism program in Kyrgyzstan.

2 2 METHODOLOGY

2 .1 A market systems approach to responsible winter tourism development

The present feasibility study takes on a strong market systems approach to analyse the winter tourism market structure and the different stakeholders that influence this market by exercising various supporting functions and implementing rules and regulations. This approach, applied to the tourism sector, takes into account that tourism value chains look less like a linear chain of production and more like a web of interconnections where tourism supply is formed by a series of public and private businesses that offer products (e.g. souvenirs), services (e.g. accommodation) and activities (e.g. skiing, horse riding) to tourists (demand).

The tourism sector thus distinguishes itself from other markets where the product goes from one process to the next in the value chain, as in goods value chains. In the tourism sector, the demand (tourists) moves to the product (the tourist destination), wherein the tourism supply is defined by the interplay of tourist services and activities (e.g. businesses providing hospitality, food, and arranging activities such as skiing, snowboarding), and tourist attractions and resources (e.g. natural resources such as a mountain, and lakes; and tourist attractions such as ski stations) and tourism infrastructure (e.g. ski-lifts). It should be noted that the combination of a natural resource with the appropriate infrastructure creates a tourist attraction, which tourists eventually want to enjoy. Tourist enterprises are particularly relevant to the provision of services and activities, since this element of the supply is generally, though not exclusively, offered by private enterprises. The coordination and functioning of all actors contributing to enriching the tourism destination are crucial to enhance the competitiveness of the sector.

3 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

Tourist services and activities

TOURISM SUPPLY Tourist Tourism-related attractions infrastructure and resources

Figure 1: Components of tourism supply (tourist destination)

TOURIST TOURIST SERVICES TOURISM RELATED TOURIST RESOURCES AND ACTIVITIES INFRASTRUCTURE ATTRACTIONS

 Natural,  Usually carried out by  Physical  Since the tourist archeological, private enterprises, a infrastructure that is resource by itself cultural and historial tourist destination necessary to develop does not guarantee expressions (both offers a variety of tourist services and the possibilities of material or tourist activities and activities. This is tourist activities, only immaterial) that are services for visitors different from when this is part of a destination to enjoy general combined with infrastructure such available  E.g. mountains,  E.g. skiing, trekking, as water, electricity, infrastructure and lakes, waterfalls (tourist activities), and roads. the presence of (natural resources) and accomodation, tourist services and food, booking  E.g. ski-lifts, cabines activities, can this be companies (tourist labeled as a "tourist services) attraction" (e.g. mountain + infrastructure + company providing service/activity to go skiing = ski resort)

 E.g. ski resorts Figure 2: Basic definitions of tourism supply

4 Through a market systems approach the these supporting functions and rule and project will also look into the influence of regulations are limiting the market function- actors at the market system level that pro- ality in winter tourism. vide financial and business support services, and regulate the tourism industry. Key For instance, research has shown that underlying constraints should be identified Kyrgyzstan lacks skilled human resources via an assessment of the constraints that in the winter tourism sector (e.g. ski tour market system level actors themselves face guides and instructors) to face the increas- to support the industry. At the same time, ing tourist demand; from this constraint, the analysis will assess their incentives (will) the research then goes on to analyse why and capacities (skill) to improve their role or are there not enough available skilled staff to try innovative models. The following fig- and which actor should be responsible for ure provides a general overview of the winter providing quality training. In the analysis of tourism market system in Kyrgyzstan. ‘supporting functions’ the research will then analyse the constraints of this actor, namely The figure above identifies the main con- training institutes or associations that pro- straints that winter tourism businesses and vide training, to find out why (root cause) other core actors face (at the centre of the the training landscape is not providing this market value chain) to become more inclu- service to the winter tourism industry appro- sive and competitive. These constraints are priately. While it might be that there are no shown in the outer ring in the correspond- available training courses (absent supporting supporting functions or rules and regu- ing function), it may also result that availa- lations. The idea of such a market systems ble training courses are inadequate to meet analysis is to really drill down into these key the demand for specific skills (inadequate constraints to find the root causes of why supporting function).

Figure 3: Winter tourism market system

SUPPORTING Statistics and Skills/entrepreneurship market information training and FUNCTIONS (Statistics certiﬁcation Committee, (Universities, business Universities) associations) Business (Winter) Tourism associations marketing and (KATO, KCBTA, promotion (DOT) CBT Groups)

General infrastructure Public-private (Government) coordination (DMOs)

CORE WINTER TOURISM VALUE CHAIN

Winter tourism Winter tourism supply demand

Government Tourism regulations for Development ski base and marketing construction strategy (DoT) (several Ministries) Ski base safety Conﬂict standards (Ministry resolution of Emergency (Local Councils, Situations; resolution Meteorological bodies) Agency) RULES

5 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

2 .2 Skill-Will framework for stakeholder analysis

In order to assess the willingness and ca- enable them to adopt an innovative model pacity of stakeholders to drive change to- or change their business practices in the wards a more responsible variety of winter long-term. tourism in Kyrgyzstan, the research has assessed the relevant winter tourism actors. In chapter 4 the analysis of supporting func- The skill-will framework (see Figure 4) is a tions and rules and regulations provides a useful tool to help identify potential project first look at the different market actors and partners for the upcoming project and the their capacities and incentives, as well as type of support (intervention) that the pro- their constraints to partner in the adoption ject should provide to the partner in order to of innovative practices.

2 .3 Research process

For the purpose of realizing this feasibil- the study and gain their insight in regard ity study the research team used a mixed- to the objectives, as well as debrief them methods approach comprising the following on the preliminary findings of the mis- research tools: sion. The trip also included several field visits to witness and analyse the condi- 1. Initial desk review: which mainly con- tions of ski resorts. sisted in revising secondary data from academic sources, international organi- The research team was formed by Mr Urs zations, donor-funded projects and gov- Wagenseil (Luzern Business School), Ms ernment sources. Daniela Martinez (ILO), Mr Kuban Ashyrku- lov and Mr Marat Danilov (Trekking Union). It 2. Pre-mission interviews: Prior to the field may be concluded that the field visit provided research there were 3 in-depth interviews a strong basis for understanding the sector’s targeting Mr Heins Pleisch (Ski resort pri- key constraints as well as its potential for in- Figure 4: vate investor), Ms Edda Hergarten (Project clusive and sustainable development. Skill-Will Framework Manager of Winter Sports Project) and Ms (Springfield Dagmar Schreiber (private investor). Centre, 2015) HIGH 3. Field research: a 12-day mission (May 30 to June 10, 2017) to undertake in- PLAYER WITH CAPACITY PLAYER POSSESSES TO CHANGE, BUT BOTH THE INCENTIVE depth interviews with key stakeholders. LACKING MOTIVATION AND CAPACITY TO The research used a semi-structured TO DO SO: CHANGE: questionnaire with key standardized re- Focus on reducing Conduct further incremental risk analysis beyond search questions to be applied to all in- associated with partner to explore formants, while it also provided the flex- change external obstacles ibility to adapt research as new findings emerged about each of the stakeholders. PLAYER LACKS BOTH PLAYER WITH STRONG INCENTIVE AND INCENTIVES, BUT The team conducted a total of 28 inter- CAPACITY TO CHANGE: LACKING CAPACITY TO views, in addition to two meetings with Reconsider feasibility PURSUE A CHANGE: SECO at the beginning and end of the or accept high risk of Focus on building distorting the market ability to operate mission. The purpose of these meetings system outside current was to brief the office on the purpose of comfort zone SKILL

LOW WILL HIGH

6 3 THE WINTER TOURISM MARKET

3 .1 An overview of the winter tourism market

According to the National Sustainable Development Strategy 2013 – 2017 of the Kyrgyz Republic the tourism industry is considered a priority sector of the economy in Kyrgyzstan. However, the Government does not provide much support when taking into consideration the low profile of the Tourism Department and its resources dedicated to tourism development. Since the Kyrgyz Republic reached its independence the tourism industry is developing steadily. The total contribution of tourism to the overall GDP was about 0.3 billion USD (18.9 billion KGS) which accounts for 3.9% of participation, and it is forecasted to grow by 7.9% in 2027 to represent 5.0% of the overall GDP9. According to the National Statistical Committee, the number of legal entities related to the tourism industry also increased from 100,500 in 2015 to 104,100 in 2016. This number includes legal and physical entities (private entrepreneurs) involved in the production and sales of tourist products and services10 as well as transportation businesses. 88% of these legal entities are private entrepreneurs and are mainly located in Bishkek (4,500) and in the Issyk-Kul region (1,500).

According to the official statistics for 2015, 8,444 permanent employees were engaged in the tourism industry with an average monthly salary of 9,497 KGS, while the total number of people involved in tourism activities amounted to 73,500 (national statistics) or to 89,500 (1.3% of total employment), if considering the data provided by the WTTC. According to the latter, the tourism sector’s contribution to employment will gain further significance by 2017 when it is expected to contribute to 4% of total employment. The income from ser-

9. Turner, R. & Freiermuth, E. (2017). Economic Impact 2017 Kyrgyzstan. United Kingdom: World Travel & Tourism Council (WTTC). Please note that statistics in Kyrgyzstan may differ, as the official Statistics report that the overall GDP contribution as of 2016 was 4.7% with 21.458 billion KGS, an increase by 5% compared to 2015. 10. Including restaurants, all types of accommodation (hotels, guesthouses, etc.) and leisure services and activities (national reserves and parks, alpine camps, etc.).

7 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

vices for foreign tourists in 2016 was about that tourism has grown steadily during the 415.6 million USD, growing by 1.3% from last couple of years and will likely continue 2015 when this income amounted to 410.1 to increase. Furthermore, according to the million USD11. estimations of numerous experts and stakeholders the winter tourism industry is de- Based on the information provided, it is safe veloping not only to meet foreign demand to say that the tourism sector will represent but also the local demand. The following a relevant part of Kyrgyzstan’s economy in diagram provides an overview of the winter terms of economic growth and job creation. tourism market from a supply and demand Although the availability of reliable tourism perspective. statistics is limited, it is also safe to affirm Figure 5: Winter tourism value chain Kyrgyzstan

¾Tourist resources: ountains o territory al aboe m lakes nomad lie andistory silkroad brand

TRAVEL TRANSPORTATION ACCOMMODATION SERVICES TOURIST ACTIVITIES ARRANGEMENT & FOOD

¾Trael ¾uipment ¾ki bases mall and ¾ar rentals ¾otels agenies and sports edium nterprises ¾Transport ¾ostels ¾Tour operators loting ¾ki reeride and ski touring ompanies ¾T ¾riate stores rentals destinations T groups bussuttle and miroenterprises ¾irlines omestays ¾urt amps ¾esign ¾eliskiing mall and ¾Restaurants edium nterprises SUPPLY ¾oal guides: orseriding and eagle unting T groups and miroenterprises ¾Winter estials ompetitions ¾pas termal pools

¾Local tourists: lassial skiing beginnerintermediate small but inreasing interest in reeriding ¾International tourists: reeriding ski touring ross ountry eliskiing and lassial skiing Russia and Kazakstan ¾Origin: Russian Kazakstan kraine Taikistan zbekistan ina Turkey ermany and ndia DEMAND

alue ain setions it urrent or potential partiipation o omen Value chain sections with current or potential participation of youth

3 .2 The current market segmentation: mass tourism vs . niche tourism

Tourist destinations require a suitable num- Lower numbers of tourists can also mean ber and mix of products, so that they can less required infrastructure13. Currently, meet strategic objectives and the expecta- Kyrgyzstan’s tourism industry does not fol- tions of visitors. In this sense, destinations low a single product intensification strategy. have fundamental strategic options for their As shown in figure 6, Kyrgyzstan possesses tourism product intensification. That is a certain variety of tourist resources and whether they develop niche or mass tour- activities that would allow the tourism in- ism products. Mass tourism is often labelled dustry to develop products that serve either as a large-scale activity involving substan- the needs of mass tourism or niche tour- tial numbers of tourists12. Niche tourism, by ism. The winter tourism market has, for a contrast, is generally described as appealing longer timeframe, met the demands of in- to smaller and more specialised markets. ternational tourists arriving mainly from the

11. National Statistical Committee of the Kyrgyz Republic (2016). Tourism in Kyrgyzstan. Statistical Summary for 2011 – 2015. 12. Vainikka, V. (2013). Rethinking mass tourism. Tourist Studies, 13(3), pp. 268 – 286. 13. Mowforth, M. & Munt, L. (2009). Tourism and sustainability: New tourism in the Third World. London: Routledge.

8 Russian Federation and Kazakhstan in ment each other and develop side by side14. search of classical skiing experiences and Yet, more importantly one can argue that ei- all-inclusive products, with a slight increas- ther mass or niche tourism can be relatively ing demand coming from national tourists. sustainable depending on the specific local More recently, however, international tour- circumstances, such as whether there are ists arriving from Western countries have local quality control measures and whether taken an interest in Kyrgyzstan’s offer of fre- local actors are committed to implement- eriding activities, while also trying to experi- ing such controls. In many destinations ence the cultural experiences and services the product features are often determined provided by CBT groups. by uncoordinated individual market-based decisions rather than by coordinated des- Both mass and niche tourism might be tination-level policies and market interven- largely considered as simplifications to tions. Given the state of development of Kyr- aid understanding destination features. In gyzstan’s tourism industry, which is driven practice these extremes rarely fully char- by individual business efforts, it is yet to acterize tourism across a large destination. become apparent which market the winter Mass tourism, for example, can supply the tourism industry in Kyrgyzstan is primarily Figure 6: tourists that are required for niche tourism going to cater to. Also, given the country’s Winter tourism products, which means they may comple- diversity in terms of its resources it ought activities and the market segmentation

Winter Tourism tiities in Kyrgyzstan

STRATEGY MASS TOURISM NICHE TOURISM

Additional Ski-Bases service providers Snowy Unspoiled Resources Infrastructure (tourism service mountains country-side chain)

Snow- Snow- Cross- Free- Ski- Skiing Shoe- Activity products Boarding Country Riding Touring Touring

ZIL Suusamyr Chunkurchak Kashka-Suu Chong-Kemin Arslanbob Orlovka Destinations (selection) Norus Alai-Region Jyrgalan Karakol others others

National tourism Target markets International tourism International tourism (Russia and Kazakhstan) (Europe, USA, others)

14. Christou, L. (2012). Is it possible to combine mass tourism with alternative forms of tourism: the case of Spain, Greece, Slovenia and Croatia. Journal of Business Administration Online, 11(1), pp .1 – 8.

9 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

not to be prematurely determined what and disadvantages it is merely a matter of product development strategy the tourism what supporting functions are and can be industry is advised to follow. As both types established to facilitate one type of tourism of tourism come with certain advantages based on the available resources.

3 .3 Winter tourism supply

One of the key challenges of the tourism in- In addition, new winter tourism products dustry in Kyrgyzstan is to prolong the tourist were more recently developed such as fre- season and to develop winter tourism prod- eride, country ski touring and heli-skiing. All ucts to attract additional visitors during the of these products are designed to mainly winter. In this regard, the development of meet the needs and interests of foreign ski bases and ski touring or freeride desti- tourists. Country skiing services are mainly nations is essential. 90% of the Kyrgyz ter- provided by large tour operators as well as ritory is covered by mountains with an alti- small CBT groups in a few destinations, tude of more than 1,000 meters above sea such as Arslanbob, Karakol, and more re- level. Across the country, 3-4 winter months cently in Jyrgalan. During the last few years, have a significant potential for winter tour- with support of the USAID BGI project, the ism development (January – March), while Jyrgalan village was promoted as a new fre- in higher areas or geographically favoured eriding and country skiing destination. The areas with longer periods of snowfall (e.g. following map contains the most relevant ski Chon-Kemin or Jyrgalan) the winter season bases and freeride destinations. even is longer (4-6 months from October – April). Large part of the cultural experiences, ecotourism, as well as freeriding activities are Currently, there are 23 ski bases in Kyr- offered by CBT groups through its network gyzstan of which 17-19 are fully opera- of 15 groups spread around the country. tional during the winter season. Almost all At present, there are 5 permanently active ski bases are located in the Chui province CBT groups, although the rest offer services nearby Bishkek. One of the best ski bases and activities on demand. Starting in 2003, according to the ratings of the Ski Cluster CBT groups have taken the role of ‘travel Association is the Karakol ski base, which is agencies’ to connect local and community

located in the Issyk-Kul province. The aver- services providers to an increasing number Figure 7: age number of ski lifts in ski bases amounts of international tourists, interested in utiliz- Map of Kyrgyzstan with main ski to 2, which indicates the small size nature of ing local natural and recreational resources, bases and this type of business. and in experiencing Kyrgyzstan in a more ski touring destinations

KYRGYZ REPUBLIC Source: Goskartografiya (2003)

10 sustainable way. Nevertheless, CBT groups bases Chunkurchak, Orlovka and Zil (medi- are still in need of additional infrastructure um-sized enterprises) and smaller ski bases and capacity building in order to provide such as Kashka-Suu. The offer in this area quality services. pleases beginners and more advanced skiers, and is mainly concentrated on classi- Heli-skiing services are offered by expe- cal skiing and snowboarding. Lastly, the rienced tour operators, who have the nec- Southern region’s activities are primarily essary infrastructure, qualified guides and led by CBT groups which offer freeriding instructors. However, heli-skiing largely de- and ski touring activities, among others, to pends on the availability and technical con- international tourists, the most developed dition of these helicopters, which has dete- CBT group being Arslanbob. In overall, most riorated during the last few years. Currently, of the tourism enterprises are located in only the Ministry of Defence owns a few Bishkek and in the Issyk-Kul region. helicopters available for rent. Nevertheless, running this business is highly risky. The winter tourism offer is largely formed by ski bases (both medium-sized and small), Considering the geographic position of the followed by ski touring and freeride destina- winter tourism supply, it is possible to clus- tions. The following section provides a de- ter these destinations into three main geo- scription and analysis of the current offer, graphic areas: regardless of their geographic location.

Bishkek area: Chunkurchak, Zil, Kashka- Suu, Chon Kemin, Orlovka, Too Asha, Suusamyr a) Ski-Bases (larger) In the East: Karakol, Jyrgalan In the South: Arslanbob, Osh, Alai, The larger ski bases in terms of costumer Bokonbaevo capacity and number of ski lifts are Zil, Chunkurchak, Orlovka, and Karakol. The The most advanced area in terms of winter first three located in the Bishkek area, while tourism development lies in the East (Kara- Karakol is located in the Eastern region. All kol and Jyrgalan), with Karakol being the of the ski-bases have an interest in develop- most developed and popular ski base and ing winter tourism and winter activities for freeride destination, and Jyrgalan offering tourists and day-guests. These businesses a new experience for international tourists are all quite young (5-10 years) and started interested in freeriding and ski touring. The with 1-2 ski-lifts/chair-lifts. The success of second area, focused around Bishkek, of- the initial operating phase plus the power of fers mainly ski bases of different sizes and the investors allowed them to expand their Figure 8: stages of development including the ski business and offer over the years. CBT groups in Kyrgyzstan

Source: Google Maps

11 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

The services offered are mountain trans- are around 1,000-1,200 KGS and among portation (schlepplifte, ski-lifts, chair-lifts), domestic skiers these are evaluated as ex- parking, gastronomy, accommodation of up pensive. Additional revenue is made with to 300 beds in different types (hotels, apart- selling food and drinks in cafes and restau- ments, guest-houses) and tubing (summer rants, as well as accommodation services, and winter). They also offer ski-courses with ski-courses and parking slots. The potential instructors, and have some basic equip- to earn good revenues is high, although opment like Pisten-Bullies and medical assis- erational costs are high as well. tance. Compared to international standards The main concerns of ski-base businesses the overall evaluation of the offer needs to are: be classified as small, old and of low quality. ■■ the very high investment costs for the in- The following pictures provide some exam- frastructure; ples of the current state in infrastructure of ■■ the very poor road quality to reach the ski-bases: Zil, Kashka-Suu and Orlovka. ski-bases; ■■ the short winter season; On the following page one gets additional ■■ the need to produce artificial snow with impression from winter destinations such as expensive technical equipment; Chunkurchak, Zil, and Karakol about their ■■ the need for high volumes of electric equipment and ongoing work in infrastruc- power; ture. ■■ the difficult or lack of dialogue with the Nevertheless, the domestic population likes local municipalities and the local popula- to visit these ski-bases and so the demand tions; has grown permanently over the years. Ad- ■■ additionally, the ski-bases face legal is- ditionally, these resorts have a certain inter- sues when trying to expand their busi- national relevance in the markets of Russia ness with new lifts in additional areas of and Kazakhstan. The prices for day-passes the ski-resort.

12 13 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

The importance of the ski-bases in remote ■■ a small offer (mostly 1-2 small lifts only), mountainous areas is high as this kind of no additional services beside the trans- business generates significant additional portations function; jobs with different profiles for men and ■■ shorter seasons (no artificial snow mak- women15. The larger ski-bases offer around ing infrastructure); 50 – 150 jobs (in winter periods the number increases is twice or four times higher ■■ low management skills; than in summer). This job volume cannot ■■ no long-term strategies and; be reached by other businesses in the respective areas, which means ski bases still ■■ less economic and tourism relevance represent the largest job providers in their (low number of jobs). destinations, including isolated villages. The ski bases’ offer also attracts additional Despite their limitations, they all face a businesses, investors and services provid- growing demand and act as good as pos- ers, including accommodation, ski-instruc- sible to earn money and to compete against tors, rental-shops, gastronomy partners, bigger areas (e.g. in the South of Bishkek horse-riding tour operators, yurt-camps where many small ski-bases compete with and mountain-guides. Zil, Chunkurchak or Orlovka).

The incentives to develop winter tourism is The development of these bases is very lim- very high among the larger business. Winter ited as they do not have plans, and mostly is their clear priority season when they earn belong to a private person. Nevertheless, approximately 90% of their total annual rev- their offer in winter sports has a domestic enue. However, the power of the existing relevance as they mainly attract domestic ski-bases to expand rapidly is limited (see customers at the beginner’s level. Their ski- above “concerns”). The lack of capital often ing offer is a great alternative for the local does not allow them to invest in a way and people in winter times and often acts as within the time they hope. multiplier and feeder for the bigger (more difficult) ski-bases. During the last few years many additional projects to build new and modern ski-resorts were communicated16. So far, the majority c) Ski rental shops did not implement their plans due to various reasons (legal aspects, investment volume, Every year an increasing number of small and missing investors). Nevertheless, it is and large ski rental shops are opening up in necessary to follow the further development Kyrgyzstan. Within the last three to five years of these projects, as they would be crucial the number of ski rental shops has increased for the winter tourism in Kyrgyzstan. If such in Bishkek and in Karakol by two or three projects are implemented, it will impact the times. Furthermore, in every ski resort there local economy, ecology, society and the gen- are 1-3 shops renting ski equipment on the eral local tourism industry enormously (both spot during the ski season (mostly out of old in positive and negative ways that need to shipping containers). The prices range from be managed). 400 -1,200 GKS per day and per set.

The situation about the sport rental shops b) Ski-Bases (small) in the most relevant cities of Bishkek and Karakol looks like this: The most notorious smaller ski bases are Kashka-Suu, Norus, Kok, Jangak, with 15 Bishkek more to be included in the list. The charac- In Bishkek, there are 10 professional ski/ teristics of the small ski-bases are: snowboard shops that are working well. ■■ a small investment volume / power; The best ski shops are Gergert Sport and

15. To mention a few examples: technicians, constructors, mechanics and service personnel for ticket sales, food/drinks and all different service jobs in the hotels and guest houses. 16. The most important project was published a few days ago prior to the field visit in Karakol, offering 4 ski-lifts with a total of 7km length, parking area for 4,000 cars and 1,500 new beds in apartments and a large hotel complex.

14 Montera Ski Rental shop. The rest of the ski are exposed to rocks and gravel. In addi- shops are small and have a limited num- tion, people that rent skis abuse damaged ber of skis for rent only. Gergert Sport had skis. It is common to see people skiing on about 1,000 skis for rent during the last gravel and skiing off the ski base where winter season 2016/17 (this is a growth by there are exposed rocks. The staff at the 100% over the last 4 years). The costs are ski-rental shops do not always control or 700-1,000 KGS for a day rent. Additionally, have set standards to check the skis’ con- Gergert Sport is one of the few that waxes dition. There needs to be a greater level of skis professionally. Montera offers approxi- accountability and ownership to make these mately 300-400 pair of skis plus 200 snow- ski rental shops sustainable. boards for rent (day rent is about 800-1,200 KGS). The rest of the ski shops in Bishkek An additional income generation activity for are quite small and have about 40-60 pairs the rental shops could be creating a system of skis/snowboards only. The average rental to share transportation from the cities to the price is between 500-1,000 KGS. ski bases. Most people do not own a car and the roads going to any ski base in Kyrgyzstan are of low quality. If it is possible to increase Karakol the amount of shared taxis /minibuses going to the skis bases the number of people ski- In Karakol there are approximately 20 ski ing would also increase. In addition, there rental shops in the city. These shops are are no central (“bus- or taxi-terminals”) in made from shipping containers or the back Bishkek or Karakol where transport compa- door of someone’s house. Each shop has nies can easily pick up clients. 15-30 sets of skis and some snowboards. The average price is 400-600 KGS per day. In the long term, it would be helpful to de- At the Karakol ski base there are 2 places velop winter tourism if the local ski rental where people can rent skis and snowboards; businesses would also be able to support here the prices are between 500–1,200 ski schools and offer ski races across Kyr- KGS per day. In Karakol there are 3 places gyzstan. Such activities would improve ac- with the facility to wax skis. cess for interested (young) skiers to this type of winter sports. One of the main obstacles for ski rental shops is maintaining their equipment prop- In conclusion, one may note that the rental erly. Currently many ski rental shops only business is growing and becomes more pro- wax their skis once a year or once every two fessional year by year. They are very inter- years. It is very common for the smaller ski ested in promoting winter tourism sports. rental shops to rent the equipment until it is The most relevant businesses (e.g. Gergert no longer usable. Most of the rental equip- Sport) also signal support for developing ment is 2nd hand donated equipment. An projects where they could contribute with additional obstacle for ski rental shops is their specific skills and network of interna- the conditions of the ski bases where they tional sports brands.

Photo: Sport Rental station out of shipping containers as in most of the ski bases and a very modern one (as an exception) in Chunkurchak.

15 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

d) Other winter-tourism Key problems they face are their partially related services non-existing winter readiness, the insufficient financial power to invest in improv- (accommodation, tours ing their infrastructure and offer, and the and guides) lack of knowledge on what they could additionally offer to make their traditional ser- All the additional services, apart from the vices more attractive in the winter season. above-mentioned winter relevant businesses Some types of services also lack skills and from the complete tourism service chain, equipment to expand into winter tourism have their roots in the traditional summer (guides, tour operators). Solving all above- tourism. As this tourism season is enormous- mentioned problems is difficult, because ly short (often it is limited to the 8-9 weeks these businesses are all small and medium in July and August) they are absolutely open sized enterprises (SMEs), which are isolat- to expand their business into the winter sea- ed and without a competent network (e.g. sons. The goal is to get more revenue and memberships in strong associations). They income to be able to support the existing lack connections to supporting organiza- business and to cover fixed-costs, as well as tions to develop their business as market to offer longer-term jobs to their employees. opportunities emerge.

3 .4 Winter tourism demand

According to the State Border Service there overall, most international tourists come were 3.1 million people who entered Kyr- from CIS countries, accounting for more gyzstan in 2016, although the number de- than 95%. However, more detailed informa- pends on the source, and accounts for all tion and figures on the share of tourists by arrivals in Kyrgyzstan making it difficult to country are not available. The average dura- differentiate tourists from non-tourist arriv- tion of stay can range from 6 to 12 days, als. The main flow of visitors is from Ka- with an increasing trend to stay longer. 50% zakhstan, Russian Federation, Ukraine, Ta- out of these are repeat-tourists. Interna- jikistan, Uzbekistan, China, Turkey, United tional tourists coming from CIS countries Figure 9 Overview of the States of America, Germany and India. In prefer leisure and passive type of vacation, market demand for ski bases18

55’000 200’000 national skiers skier visits

Participation rate nationals Proportion foreign skier 1%

20%

2.9 skier visits per national skier 0.0 skier visits per inhabitant 8’333 skier visits per lift 0.0 skier visits per foreign visitor

16 whereas non-CIS tourists prefer more active moted in both countries and ranked in Top- mountain-type of vacation combined with 10 ski bases of the CIS countries. Karakol cultural experiences and history17.18 attracts Kazakh skiers with professionally maintained slopes, inexpensive costs (about 46 USD per day per person), as well as easy The number of classic skiers among the lo- access (just 400 km from Almaty). cal population is growing rapidly. Skiing is not a cheap leisure activity. However, more Freeriding and country skiing services is and more locals are involved in skiing at ski mainly demanded by international skiers bases. The majority of local skiers are begin- arriving from the USA and European coun- ners. This is why ski bases with slopes that tries. However, local skiers also started to suit beginners such as Chunkurchak and Zil book freeriding tours. The majority of tour- are popular. The growing demand for clas- ists that visit Kyrgyzstan for freeriding and sic skiing is indirectly supported by the fact country skiing are attracted by CBT groups that the number of ski equipment rent and or larger tour operators. Thus, CBT Arslan- sales shops in Bishkek and Karakol is in- bob hosted more than 70 tourists visiting creasing. for country ski touring. There is significant interest from other CBT groups and remote The demand can be broadly classified into destinations to develop winter tourism. In two different types of tourists according to this sense, there are some sites that show their preference. The first group is formed potential for development of winter tourism by tourists visiting ski bases to practice such as Chon-Kemin, At-Bashy, Jyrgalan, classical skiing and snowboarding, while Suusamyr, Jumgal, Naryn, and Alai. the second group is more interested in freeriding and ski touring activities. The Kara- In Kyrgyzstan, the overall demand for classi- kol ski base, the main base in the country, cal ski tourism is formed mainly by national experiences high demand from skiers from tourists and less by international tourists. Kazakhstan and Russia. This is highly pro- Annual sales of ski passes is about 19, 000.

3 .5 Potential employment contribution of winter tourism

It is estimated that the tourism sector in tributions of tourism to employment have overall has contributed to the creation of fluctuated, which suggests the country’s more than 32,000 direct jobs (1.3% of total hard task to manage a tourism economy. employment), which is expected to remain unchanged through 2017 but rise by 1.4% Furthermore, if compared to the global and to 37,000 jobs in 2027. The tourism sec- Central Asian rates the Kyrgyz figures fare tor has a significant multiplier effect on em- lower and suggest the country has not been ployment contributing in total to the crea- successful in reaping the financial benefits tion of 89,500 jobs, including indirect and of the tourism sector potential. In mountain- induced jobs created in related sectors19. ous regions, tourism represents one of the This, however, is expected to fall by 2.2% in only employment opportunities for isolated 2017 to 88,000 jobs and rise again by 2% populations. to 107,000 jobs in 2027 (contributing thus to 4% of total employment). In the previous It is important to add that while only 13% years to 2016 figures representing the con- of the population lives in mountainous ar-

17. See Akbasheva, A. et al. (2016). Assessment on the Potential of Sustainable Tourism in Kyrgyzstan Opportunities and Chal- lenges, commissioned paper by SECO. 18. Vanat, L. (2017). 2017 International Report on Snow & Mountain Tourism - Overview of the key industry figures for ski resorts. 19. Figures were reported for the year 2016. Please see World Travel & Tourism Council. (2017). Kyrgyzstan country report, available on: https://www.wttc.org/research/economic-research/economic-impact-analysis/country-reports/

17 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

eas, more than half of these live in poverty. involving local communities in the creation of The World Bank has noted that there is a business models is key to bring employment close correlation in which poverty increases opportunities in areas that were typically left with geographical remoteness20. As such, out of the labour market. In a recent research the development of winter tourism in remote conducted about CBT providers and circular mountainous areas represents a unique op- labour migration26 CBT members reported portunity to create sources of employment that in general less people would migrate if full in regions that have been impacted by ex- time employment with the CBT groups would clusion and poverty. be offered during the winter season as well, representing a good case for the development Labour migration is a key issue in Kyr- of innovative models in this season. gyzstan. An estimated number of 30,000 to 50,00021 workers emigrate annually which Some types of jobs have emerged with the has resulted in almost 12% of all Kyrgyz advent of tourism in the country. Women and population living abroad, totalling an out- youth have started working as guides (trekking ward migration of around 761,000 people, or horse riding) or exhibitors in workshops that with 75% of them leaving to live and work in show the cultural and historical richness of Russia22. This population is predominantly nomads27. Other jobs include demonstrators formed by youth23. A slowdown in outward in cooking workshops and folklore shows. As migration is nevertheless occurring, as mi- new types of tourist products emerge, there gratory outflows in 2012 were recorded as five is opportunity to create jobs for women and times less than in 200824. youth in skiing, including cross-country skiing and management of thermal spring areas. It Recently, CBT initiatives have contributed is known that women and youth have taken to addressing this issue by bringing in jobs up jobs as interior designers who provide this in areas that were typically isolated from the service to new hotels and guesthouses. labour market. For instance, as of 2015 the

CBT sector employed over 1,400 people and In Kyrgyzstan, there is an overall negative so- Figure 10: involved 350 households across Kyrgyzstan25. cioeconomic trend that includes a skills mis- Contribution of the tourism sector Innovative models like this have proved that match in the labour market. This has resulted to employment in Kyrgyzstan

‘000 jobs % of whole economy employment

2016 2017 2027 2016 2017 2027

iret ndiret ndued 20. World Bank. (2011). The Kyrgyz Republic: Poverty Profile and Overview of Living Conditions, available on: http://siteresources.worldbank.org/INTKYRGYZ/Resources/KG_Poverty_Profile_062811a.pdf 21. IMF. (2014). Report for selected country groups and subjects, available on: goo.gl/ogEi23 22. Figures given for the year 2015. Please consult IOM. (2017). Kyrgyzstan country profile, available on: https://www.iom.int/countries/kyrgyzstan 23. IMF. (2014). Report for selected country groups and subjects, available on: goo.gl/ogEi23 24. Ibid 25. Tõnisson, E. & Yassin, Y. (2015). Community Based Tourism in Arslanbob and Sary-Moghul, Kyrgyzstan: An Alternative to Labour-Migration? Lund University. 26. Defined as the temporary and usually repetitive movement of a migrant worker between home and host areas. 27. Akbasheva, A. et al. (2016). Assessment on the Potential of Sustainable Tourism in Kyrgyzstan Opportunities and Challenges, commissioned paper by SECO.

18 in the presence of unemployment, temporary in this area of winter tourism. Currently peo- incomes, part-time employment, and low ple who are interested in becoming guides skilled jobs28. The tourism industry in overall are acquiring 2nd or 3rd hand equipment and needs managers at various levels as well as teaching themselves, or through informal guides. Despite this demand, young gradu- networks using the assistance of friends or ates struggle to find a job given the low levels acquaintances. There is also an evidenced of practical education they receive. There is need for package/tour sellers and more ap- also a tendency to hire young graduates for a propriately trained service personal in terms of short term with some levels of practical experi- tourist safety. Since winter tourism falls under ence as opposed to young graduates without adventure and extreme tourism, accidents experience. With the training and education have happened. From 1995 to 2003, over 50 system failing to provide graduates, private tourists reportedly died or have been injured in businesses often prefer to train their workforce the mountains31. Although there is a contrast themselves. between these and other figures reported, as the Mountain Guides Association assures that At present, there are 15 universities offering an average of 50 serious accidents take place several degrees on tourism29; however, there ever year only on ski resorts. is a need to reform the tourism education system to address the demands of businesses. Lastly, the establishment of ski resorts has This is also indicative of the lack of coordina- brought not only the creation of new jobs but tion between education and training services also few difficulties with local populations. and the State (through the Ministry of Educa- There have been cases of discontent between tion). An example of an existing training insti- business owners and local residents in which, tution is the Tourism Academy, dedicated to according to private businesses, local popula- provide higher education in various tourism tions violate their private property or demand disciplines; this, however, has been deemed several benefits from the business owners in to be too theoretical and still lacks practi- order to be allowed to continue operating32. cal modules that enable graduates to face In one particular case, the tension escalated the increasing demand for practical skills in to a point where the ski resort was forced to the industry. Important to mention is that the close operations leaving 26 employees from KCBTA has also contributed to skills training, nearby villages unemployed. Similar conflicts in special regard to the formation of CBT busi- have emerged in other touristic regions of the nesses for new services providers. However, country which reflects the industry’s need to KCBTA’s programming falls short of winter- bring an inclusive approach to winter tourism focused activities to continue drawing tourists development. While foreign investment and year-round30. business growth are necessary to create jobs, understanding and integrating the needs and Throughout the research it has been empha- interests of local populations is crucial to cre- sized that there is a need for more and better ate sustainable winter tourism businesses in trained guides (ski instructors and guides), the region. This issue is further explored in this and for more available training opportunities feasibility study.

28. Building Migration Partnerships (2011) in Tõnisson, E. & Yassin, Y. (2015). Community Based Tourism in Arslanbob and Sary-Moghul, Kyrgyzstan: An Alternative to Labour-Migration? Lund University. 29. These vary and may include: international tourism, management and business in tourism, management of hotels, restaurant management, leisure activities, and the study of landscape, excursion activities, and business books. 30. 40 Tribes Backcountry Adventures. (2017). Kyrgyzstan, central Asia. Internet article, available on: http://40tribesbackcountry.com/kyrgyzstan-yurt-based-ski-and-splitboard-tours/ 31. Amrakulova, J. (2015). Tourism analysis in the Kyrgyz context, academic paper available on: https://www.academia.edu/26000453/Tourism_analysis_in_the_Kyrgyz_context_EN_revised?auto=download 32. Reports of local populations demanding benefits from ski businesses such as free passes, use of food and installations. Viola- tions to private property by local residents were also common. It should be noted that similar conflicts took place on the shores of Issyk-Kul Lake too, during summer touristic season. Please see the following source for more information: http://iset-pi.ge/ index.php/en/iset-economist-blog-2/entry/is-winter-tourism-in-kyrgyz-republic-able-to-reach-international-level

4 STAKEHOLDER ANALYSIS

The present section provides an overview of the most relevant stakeholders at the level of the winter tourism market system, namely, actors providing supporting functions and shaping the rules and regulations that influence the functionality of the winter tourism market. This section also aims at assessing the willingness and capacity of these actors to contribute to or develop an inclusive and sustainable winter tourism industry. Towards the end of this section, a summary of the analysis is presented using a Skill-Will diagram, in which each player is placed to help visualize their current performance and provide an idea of their possible participation in a SECO-led winter tourism development project. This analysis is further complemented by an assessment of the interrelationships between stakeholders.

4 .1 Most relevant winter tourism market stakeholders

4 .1 .1 Department of Tourism

The Department of Tourism is only a part of the Ministry of Culture, Information and Tourism and not a stand-alone ministry. This is a crucial aspect regarding the department’s strength, power and influence. The department has 11 employees, a budget of 7.8 million KGS per annum, of which 4 million are spent on salaries, and 3.8 million for tourism projects, mainly to participate in 3 international fairs in Berlin, Novosibirsk and Moscow.

According to Mr Azamat Zhamankulov, Deputy Minister, the Department of Tourism is not able to provide competent country marketing services and definitively needs more capaci-

21 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

ties and professional support. One idea is instruct winter guides (not the classical ski that this function could be done by the IPA instructors, but for trekking and ski-touring). (International Promotional Agency). One may evaluate KATO as a well-organized The skills of the Department of Tourism are association that belongs to the strongest the proven competence of its Deputy Min- players in the tourism market. The number ister Azamat Zhamankulov and their broad of members represents a good part of this acceptance within the tourism industry, that part of the industry and its network works the Department tries its best. Nevertheless, well. KATO has also a strong network to one definitively has to state clearly, that the other important stakeholder groups and influence of the Department, especially in to political institutions. On the other side, comparison with the increasing importance KATO and its members are focused on the of the tourism industry for the country (as it classical tour operator business in summer contributes at least 4.7% of the GDP, and and the experience with the winter busi- its part is growing) is enormously weak. The ness is still quite poor. KATO, as many other Department lacks relevant financial volume organizations, has to learn about this new but also capacities and skills for positioning business aspect and build up new business the tourism industry as a high ranked and models to become a strong partner for win- important topic within the national parlia- ter tourism development. ment. Additionally, the Department is not linked to other political authorities in the country, as it lacks office representation in 4 .1 .3 KCBTA & CBT Groups local municipalities of important tourism destinations such as Osh and Karakol. The Kyrgyz Community Based Tourism As- sociation “Hospitality Kyrgyzstan” (KCBTA) is the country’s driving force behind CBT 4 .1 .2 Kyrgyz Association of best practices and innovation. The as- Tour Operators (KATO) sociation’s objective is to improve living conditions in remote mountain regions by developing a sustainable and wholesome The Kyrgyz Association of Tour Operators ecotourism model that utilizes local natu- (KATO) is the largest organization represent- ral and recreational resources. KCBTA is ing Tour Operators in Kyrgyzstan, bringing an umbrella association actually uniting together 40 organizations: 34 tour opera- 15 diverse destination communities (“CBT tors, 3 associations and 3 universities. KATO groups”). The CBT association was regis- is a non-profit organization, which stands for tered on January 3, 2003 with support from protecting the interest of its members and Helvetas Kyrgyzstan Program’s “Community the rights of their clients it serves. The most Based Tourism” Support Project (CBT SP) important task of the association is the crea- with operations throughout all the country. tion of a civilized tourist market and promo- Their members are very satisfied with the tion of the tourism industry at national and central office located in Bishkek. This is not global level. only the central marketing unit for the CBT groups but also the technical heart of the Kyrgyz tour operators so far are experts for organization, initiating new ideas and forc- the summer business and have good part- ing the network. ners across the country and abroad; winter tourism so far is touched very poorly. Nev- KCBTA with its members, the CBT groups, ertheless, KATO and its members are will- may be called a “best case”. Within a ing to enlarge their business case. So far, good decade they not only reached their they were not greatly aware of the potential own goals but also established a sustain- of winter tourism, and are not experienced able business model, financing included. in this type of tourism. KATO, in collabora- In addition, there are prospects of new CBT tion with the Trekking Union, has conduct- groups being funded in other regions to en- ed several trainings for summer tourism large the CBT net and its recognition and guides. Although currently they seem to be relevance in the Kyrgyz tourism industry. interested in providing similar courses to The organization is known all over and re-

22 spected. The CBT groups are in the most ■■ “A destination is a relatively closed entity places where they are deemed the “driving and offers a wide variety of facilities and force” for tourism and often the only real services particularly for recovery and re- tourism organization in different destina- laxation, learning and health.”33 tions (e.g. Arslanbob). The CBT offices act ■■ “A destination is a geographic area (con- in most cases as travel agencies, but also as tinent, country, region, place, resort) agents of product development and market- that a guest (or a segment of guests) ing innovation. chooses. It consists of all infrastructure for accommodation, food, entertain- The success story of CBT in Kyrgyzstan can ment. A destination is therefore a stra- be proved by several facts: financial reve- tegic entity that has to be marketed and nue handled in the Group offices, the mar- managed.”34 keting relevance in and outside the country, the number of guests hosted or informed ■■ “Destinations are amalgams of tourism as well as the number of jobs created (re- products, offering an integrated experi- spectively the number of involved local peo- ence to consumers.”35 ple). Additionally, they have some marketing skills, but so far not enough means to pen- Most relevant is the aspect, that a destina- etrate the target markets, especially if winter tion needs to have “… a wide variety of fa- should be promoted additionally. cilities and services…”, “… consists of all infrastructure …” and offers “… amalgams The will to enforce a winter business is very of tourism products”. When referring to the high, as KCBTA as well as the CBT Groups Kyrgyz destinations not all winter ski resorts realize the high potential of the tourism sea- fulfil this requirement. Ski-bases like Norus son for their activities and business goals. and places with a single and isolated ski-lift They are very motivated to strengthen this do not count as a “destination” (according season of the year to bring more benefits to to the above listed definitions). Neverthe- their members (additional and new kind of less, we have to take such places into our winter jobs (e.g. ski-guides), income, activi- further considerations, as developing ski- ties in the villages). Nevertheless, they still bases is a crucial part of winter tourism as lack knowledge on how to develop new and well. Naturally the relevance for the tourism innovative winter products and have deficits activity of such small ski bases is very low in in infrastructure readiness for the winter pe- the beginning, but leisure activities of local riod (e.g. Arslanbob: out of 18 home-stays people often are the first step of day trips only 4 may host guests in winter; the major- and in a later stage the initial reason for fur- ity does not have houses with isolation and ther development (products or infrastruc- heating). These groups also lack the neces- ture, for instance). After these first stages sary skills to work as guides or instructors of such tourist places may have a wider impact skiing and back-country skiing. on job creation.

The following paragraphs are summarized 4 .1 .4 Destination descriptions of relevant DMOs with a com- Management Organizations of parable broad variety of services and offers. Additionally, one may assert that these des- most relevant winter tourism tinations have a stronger organizational tour- destinations ism structure already, mainly with a central DMO (primarily called “Destination X”): When talking about developing winter tourism in a certain area one first has to define the destination. The literature offers the following, broadly accepted definitions:

33. UNWTO (1993) 34. Bieger (2004) 35. Buhalis (2000)

23 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

DMO Karakol tourism service in the area. In addition, they are creating new and interesting tour pack- Destination Karakol was created with the ages to promote the area. DMO Jyrgalan support of USAID Business Growth Initia- has been strongly supported financially and tive to promote tour services in Karakol and technically by the USAID BGI. to increase the number of festivals in this locality. Karakol is the meeting place for DMO Naryn winter sports in the Issyk-Kul region. An additional goal of the DMO is to increase the Destination Naryn is new and still develop- number of guests in Karakol. ing their organization. Their main goals are to promote the tour services in the Naryn In Karakol city so far there is no important region and to provide trainings to the guest- summer or winter festival with the potential houses and tour providers. Currently the to attract foreign tourists. The DMO is cur- DMO is promoting the upcoming Shyrdak rently working on changing this by initiating Festival in the village of At-Bashy. The DMO new events and has plans to become more is working to promote the Naryn region and sustainable as an organization. The DMO is to attract additional tourists to come to the also working to hold trainings for owners of Naryn Region. The Naryn DMO does not guesthouses and tour companies to improve have any plans to promote winter tourism their services and offers to tourists. services. There is no real ski base in the area and ski touring destinations are still to Another goal of the DMO is to create a river be discovered. park where they will be able to host festivals during the summer and winter. During the winter months, they wish to have a new DMO Osh ice skating festival in the centre of Karakol. They would also like to provide activities for Destination Osh is also a new destination families to enjoy after skiing at the Karakol and their goals are to promote the city of ski base (“après-ski activities”). Finally, the Osh and to give trainings to the local tour Destination Karakol intends to host a ski fes- providers. The DMO was created to promote tival at the Karakol Ski base and to promote the city and the surrounding area. They are winter tourism. The DMO Karakol is one of planning to create a summer festival to pro- the strongest DMOs in the country. With the mote Osh City. As of now the DMO Osh does possible upcoming finalization of the USAID not have plans to promote winter sport pro- BGI project, hence its support, the DMO is jects in Osh but they are open for new ideas. currently planning to develop income-generating activities to support the organiza- DMO Bokonbaevo tion, and has considered becoming a travel agency to be able to sustain. Destination Bokonbaevo is also very new and was created to promote the south DMO Jyrgalan shore of Lake Issyk-Kul and to increase the amount of tourists coming to this area. They Destination Jyrgalan was created to promote are receiving several trainings and develop- ecotourism during summer and winter in ing their tour services in the area. The DMO the village of Jyrgalan, 90km from Karakol. does not have plans to develop winter sports The DMO has received countless trainings in their area because they have no snow. and support to promote the surrounding They are very interested in offering tourism area. During the summer months, the DMO services during the winter months but they is offering trekking tours and horseback rid- are not sure what new tours or activities they ing tours. During the winter months, the can offer. DMO offers ski touring and cat skiing. The mountains near Jyrgalan are well designed Summarizing the activities of these few or- for ski touring and summer trekking. The ganizations it is safe to state that the label of main goals of the DMO are to promote the “DMO” (Destination Management Organiza- Jyrgalan area and to increase the level of tion) as known in leading tourism countries

24 Roles o te s

2. Planning IMAGE and research ACCESSIBILITY 1. Leadership & 3. Product Coordination development

8. Delivery on DMO 4. Marketing & PRICE the ground Promotion AMENITIES

7. Creating 5. Community a suitable relations ATTRACTIONS environment 6. Partnership & HUMAN Team Building Figure 11: Roles of DMO

cannot be granted. Here the tasks and du- (e.g. Chunkurchak and Karakol) in the “De- ties (according to the local (legal) situations) velopment” stage. cover a much broader activity field36. These facts mean that destinations in the Nevertheless, destinations like the above “involvement” and especially in the “devel- mentioned not only have a broader offer opment” phase could have a fast and rele- of tourism products (also see Annex 2- Ski vant economic impact, inclusive of job crea- destination maps), but enjoy tourism as a tion, if winter tourism development becomes relevant industry in the local economy. Fac- an additional focus of their development ing the normal “Tourism Area / Destination strategy. Additionally, the organizations that Life Cycle” one may state that the develop- are self-labelled as DMOs in these destina- ment of winter tourism in Kyrgyzstan is at tions could be potential partners for further the very beginning stage. Depending on the initiatives. The visited DMO representatives local situation we have destinations where confirmed unanimously that they are very tourism is in the “Exploration” phase (e.g. willing to contribute to possible projects. It Jalalabad area, Chon-Kemin), in the second is important to mention that these DMOs phase “Involvement” (e.g. Zil, Arslanbob, also have a good network of tourism busi- Figure 12: Destination Life Jyrgalan, Orlovka) or in exceptional cases nesses and some access to local authorities Cycle

Stagnation Discovery Local control Institutionalism Rejuvenation or decline

Rejuvenation Status of winter Stagnation tourism in Kyrgyzstan

Consolidation Number of visitors Development Decline

Involvement

Exploration

Time

36. Own elaboration based on UNWTO, 2007, p.4 & DCG, 2012 in Morrison, 2013, p.7

25 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

and bodies. This is crucial for winter tourism As a follow up, the KMGA could be involved development initiatives to target sustainable in the development and implementation of goals and broad community impacts. short-term, basic ski guides training courses as part of the future winter tourism develop- Lastly, the very young and still small tourism ment project. destinations like Kok-Jangak in the Jalal- abad area (in the “exploration” phase) have an opportunity to benefit from several types 4 .1 .6 Universities/Education of tourism initiatives to help them advance Institutions to the next phase. Since independence the number of high education institutions has raised from 12 4 .1 .5 Kyrgyz Mountain in 1991 to 50 in 2017. There are 31 state Guides Association (KMGA) universities, 23 private universities and 5 branches of international universities in The KMGA was established in 2007 with Kyrgyzstan. In 2015 there were 223,400 support of the Mammut Company, Inter- students studying in high education institu- national Federation of Mountain Guides tions. Only few institutions provide educa- Associations (IFMGA), the Swiss Mountain tion for the tourism industry: Guides Association and the Association of British Mountain Guides. KMGA started Kyrgyz Turkish Manas University with the implementation of the Mountain Guide education project. The trainings are provided on the base of the IFMGA stand- The University was founded in 1995 ac- ards. Currently there are 35 accredited cording to the agreement between govern- professional guides. The KMGA is running ments of the Turkish Republic and Kyrgyz a guides school, which is accredited by the Republic. The education process at the uni- State Agency for Vocational Education of the versity started in 1997. By the end of the Kyrgyz Republic. first semester of the 2011-2012 academic year there were 3,809 undergraduate stu- The KMGA is also providing special train- dents studying at 9 faculties, 4 high schools ings for winter tourism guides and ski tour- and 1 vocational school. ing instructors as part of the mountain guide certification. The trainings are organized Tourism and Hospitality Management High and conducted by professional trainers ed- School was launched in 2007 as 4 years ucated in European schools. Trainings are high school. There are three departments provided at the bases of mountain training within the school: Tourism and Hotel Man- camps and alpine sites. The full cycle of a agement, Food and Beverage Management, mountain guide training takes 100 full days Travel Management and Tourism Guidance. of theoretical education and practical skills. The training course is covering all aspects ■■ The Tourism and Hotel Management of guide service, including safety issues, Department has started to accept stu- guiding, camping, communication, and dents and gave 87 qualified graduates as mountaineering, among others. The KMGA a 2 years Tourism and Hotel Vocational charges for certified mountain guide training School in 2002. Along with the structural about 3000-4000 USD per person, which is changes in 2007, a 4-year college started not affordable for the majority of population to accept students for the Department involved in winter tourism especially in re- of Tourism and Hotel Management, and mote areas where CBT groups or DMOs are gave its first graduates as middle and located. However, simplified basic courses high-level manager candidates in 2011. for mountain guides and ski instructors for Graduates from this department work in ski touring are possible to arrange with in- accommodation centres, visitor houses volvement of the KMGA trainers. The basic nd holiday villages. Graduates educated guide trainings were conducted by KMGA on hotel management have job opportu- staff for beginner guides from remote villag- nities in the front office, housekeeping, es, with support of the USAID BGI project. kitchen, service, bar, purchasing, mar-

26 keting and sales, as well as in human re- ■■ Faculty of tourism: this faculty provides courses departments. education for bachelor on: “Tourism”, “Management” and “International eco- ■■ The Food and Beverage Management nomic relations”, as well as for college Department (of Gastronomy and Culi- students on “Tourism” and “Manage- nary Arts) started to accept students and ment”. Additionally, it provides education gave 139 qualified graduates as a 2 years for masters on “Tourism” and “Manage- Tourism and Hotel Vocational School in ment”. 2002. Along with the structural changes in 2007, 4-year college has started to accept students for the Department of Food Bishkek Financial Economic Academy (BFEA) and Beverage Management and gave its first graduates as middle and high-level The BFEA was established in 1994 as a manager candidates in the academic private education institution providing edu- year 2011. cation on economics and business. Nowa- days, there are 1,500 students studying in ■■ The Travel Management and Tourism BFEA for bachelor and master programs on Guidance Department in 2002 started to the following directions: Economics, Man- accept students for a two-year associate agement and Tourism (Ecotourism). degree program in the structure of Tour- ism and Hotel Management Vocational One may summarize that especially the State School. Due to structural changes in the Universities are not very flexible in chang- university and by establishment of 4-year ing their education system and their course School of Tourism and Hotel Manage- offer; for such process they need to follow ment, the Department of Travel Manage- very long and administrative procedures. ment and Tourism Guidance started to These do not allow flexible partnerships for accept students in 2007, and they have new projects. The private Universities and graduated in 2010-2011 the first genera- the branches of the International Universi- tion. ties seem to be ready and interested to add In addition, the Tourism and Hotel Manage- new modules and specific trainings courses ment School provides short term education / seminars for winter tourism topics. The courses through the Continuing Education training skills are given, as well as the aca- Centre for tourism sector. The following demic skills for specific new research topics courses certificated by the Ministry of Edu- and projects. But the financial resources for cation are provided: new projects are limited.

■■ Food and Beverage Service ■■ Front office 4 .1 .7 Ski-Cluster ■■ Barmen and Barista ■■ Kitchen The Ski-Cluster is one out of seven clusters ■■ Housekeeping within the so called “Mountain Cluster”. The ■■ Hotel Management latter was conceived by a group of enthu- siasts. Mountain Cluster is an out-of-area Academy of Tourism project. The goal is to develop the mountain areas (for summer and winter tourism) The Academy of tourism was established in everywhere across the country by attracting 1995 with three faculties: international investors and support them.

■■ Faculty of service: this unit provides edu- The Ski-Cluster itself primarily intends to cation for bachelors and masters on the change the laws for a more attractive inves- “Hotel business”, as well as for college tor’s climate. The goal is to get back parts students on the “Hotel services” spe- of the business taxes of tourism projects/ cialty. businesses directly in the destinations to ■■ Faculty of international relations: it pro- build more and better infrastructure and ac- vides education for bachelors on “Inter- cessibilities to the ski-bases (e.g. roads and national relations”. electricity). The focus of the Ski-Cluster lies

27 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

on the Karakol – Issyk-Kul Lake area where trips or multi day trips. The target market five pilot ski-bases are planned to be built. for TUK is mostly local people in Kyrgyzstan and some expats that live in Bishkek. The Ski-Cluster Association per now consists of 14 institutional members of all types re- Within the domestic tourism market, winter lated to mountain tourism (ski-bases, cable- tourism is growing fast and the members car builders like Leitner, and ski-area plan- of TUK are demanding new services. The ners), but only 4 of these pay the monthly members of TUK are interested in taking ski fee of 5,000 KGS to support the activities of lessons and improving their skills for down- the institution. Only these 4 members have hill skiing, cross country skiing, and snow- voting rights. It is a cluster so all types of shoeing. Every year TUK is offering more businesses may be involved. and more day tours to the nearby ski bases and renting out more of their equipment. The strength of the cluster is the good net- The members of TUK are very new to winter work in the industry on a governmental level sports and they are very curious and inter- (the Mountain Cluster is on State Papers ested in learning new sports and spending competitive legislation); additionally, there time in the mountains. are contacts to important winter destination countries like Austria, Switzerland and The strengths of TUK are the members and France. The tight scope of the work of the volunteers that guide tours and keep the or- Ski-Cluster is strength and weakness at the ganization going. The number of members same time: the resources are focused to is growing every year and the demand for change the law, but this objective fails to at- winter sports is also growing. During the tract new members. The geographic focus last winter, TUK had twice as many people to the Eastern ski areas is also unattractive cross country skiing compared to the last for the ski-bases located in the South-West few years, hence TUK wants to focus on ex- or in the Bishkek-area (e.g. Zil). panding winter tours to their members.

4 .1 .8 Trekking Union of 4 .1 .9 Medical Centres Kyrgyzstan In Kyrgyzstan, quality-standard medical centres are based in Bishkek. In Osh, Kara- The Trekking Union of Kyrgyzstan was started kol and Naryn there are also medical cen- by the Norwegian Trekking Association (DNT) tres, but it is often advised to foreigners to in 2002 with the goal to develop ecotourism get treated in Bishkek or in the country of in Kyrgyzstan. The original goal was to create origin. In Bishkek, there are approximately centres in Bishkek and in Karakol to offer ec- 5-10 medical centres that can provide qual- otours to local and international tourists. DNT ity treatments and that are able to assist supported the Trekking Union of Kyrgyzstan someone that needs medical care in more with countless training, creation of multiple severe cases. maps, equipment for rent, and two guesthouses that the members could use. An additional challenge for medical centres Currently, TUK is focused on domestic tour- is the new type of injuries that are happen- ism all year round. Most of TUK’s members ing because of the increase of winter sports are from Bishkek, but TUK is developing a in Kyrgyzstan. Every year there are more second branch in Osh called the Trekking skiers and new injuries happening due to Union of OSH. The main objectives of TUK tighter space proportions on the ski slopes, is to serve the needs of their members by of- and the poor safety standards in several ski fering them interesting and one of a kind day destinations.

28 It is in everyone’s interest (skiers, ski-base FIS itself is the world’s highest governing businesses, destinations, hospitals) that the body for international winter sports. It was medical aid in ski-bases and in backcoun- founded back in 1924, and is responsible try-skiing areas improves. People with acci- for the Olympic disciplines of Alpine skiing, dents need to have efficient and qualified aid cross-country skiing, ski jumping, Nordic to prevent more severe injuries and speedy combined, freestyle skiing and snowboard- help. The actual situation in the ski-areas is ing. The FIS (based in Switzerland) is also not yet developed to guarantee professional responsible for setting the international aid. In some places, the ski-bases have a competition rules. The organization, as of doctor to assist, but further transportation 2017, has 118 national ski associations as opportunities to hospitals are very poor. Nor- their members. The Kyrgyz Ski Federation mally the guests need to help themselves to is organized by four local clubs with a total transport a patient to the next medical clinic of 577 individual members (facts as of June with their own private car. Additionally, there 2017). With such figures, the organization are no emergency plans and no information belongs to the very small organizations within the ski-bases to inform on which medical in FIS. To compare with Switzerland: 758 centre would be the most qualified in terms Clubs and 103,122 members. of different injuries. So far the Kyrgyz Ski Federation did not yet The field visit did not allow to meet relevant organize events on FIS-level and participat- experts from hospitals to talk about these is- ed only a few times in international events sues due to absences or because they could like World Championships in 2 disciplines not be reached. Nevertheless, based on sev- (Nordic and Alpine Skiing). As a benchmark eral discussions with people from ski-areas, the Swiss Federation is participating in dis- one may suppose that hospitals and specific ciplines like: Alpine Skiing, Cross-Country, clinics (e.g. Trauma Clinic in Bishkek) would Ski-Jumping, Nordic Combined, Freestyle be very interested in supporting the medical Skiing, Snowboard, Speed Skiing, Grass- help system of ski resorts. Skiing, Telemark and Masters. The Kyrgyz Federation is not a powerful organization so far at the international level, although it 4 .1 .10 Ski Federation of could be a partner for further interventions Kyrgyzstan on the national level to promote and develop winter sports and winter tourism. The national Ski Federation of Kyrgyzstan is a member of the FIS (International Ski Fed- eration; “Fédération Internationale de Ski”) since 1996.

29 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

4 .2 Skill-will assessment

Based on the analysis of the primary core value chain actors and the actors performing the necessary supporting functions and regulations that impact the winter tourism industry, the present section aims at categorizing each of these relevant actors according to their skill (human resources, Figure 13: financial and organizational capacities) and will (monetary or non-monetary incentives) to lead, Skill-Will assessment chart of relevant support or change their own practices to the benefit of the market. stakeholders

High SKILL Capacities

KMGA Large bases Ski Cluster Sport Rentals KATO

Medical Trekking Centers Union Low High WILL WILL CBT Groups Universities KCBTA

Kyrgyz Ski Federation DMOs DOT

Local Services Small councils bases Local population Low SKILL Capacities

Such assessment could not be completed without looking at the interrelationships between these actors, which might influence the project’s decisions to partner with one or, preferably, a group of actors whose interests are aligned. In this sense, the following diagram provides a first look into the types of relationships among market actors. This has also included external actors, such as development or donor organizations, whose role is temporary and more of a Figure 14: types facilitator, rather than a core market actor. of relationships among market and external actors

High SKILL Capacities

KMGA Large bases Ski Cluster Sport Rentals KATO Winter Sports Medical Trekking Project Centers Union Low High WILL WILL CBT Groups Universities KCBTA

Kyrgyz Ski Federation USAID DMOs BGI DOT

Local Services Small councils bases Strong collaborative relationship Local One-off or sporadic collaboration population Collaboration based on consultations Low SKILL Capacities Con icting relationship

Market actors Donor/external agencies

30 5 REVIEW OF RELEVANT WINTER TOURISM DEVELOPMENT PROJECTS IN KYRGYZSTAN

The Government of the Kyrgyz Republic has declared the tourism industry as a priority sector for economic development. However, there are currently just a few international organizations that support tourism development in Kyrgyzstan, namely, Helvetas Swiss Intercoop- eration, which is supporting tourism development in the Southern regions of Kyrgyzstan as part of the value-added chain promotion initiative; the USAID Business Growth Initiative, which provides support to the development of tourism destinations; and since 2017 the United Kingdom’s Department for International Development (DFID) supports tourism development through the Governance in Action Program. DFID’s main objective is to support the parliament’s initiative for a more inclusive and sustainable economic growth. The United Nations Industrial Development Organization (UNIDO) focuses its support on the Issyk-Kul region and provides support in developing agriculture and agro processing industries, as well as tourism development. Furthermore, there is a regional EU project in the framework of the Central Asia Invest IV initiative. Its main objective is to support the growth of Com- munity Based Tourism (CBT) and sustainable tourism development with priority countries as Kazakhstan and Uzbekistan. The successful Kyrgyz CBT development model will be replicated and introduced in Kazakhstan and Uzbekistan. There are no other projects and initiatives in Kyrgyzstan directed towards support of Tourism Board, Destination Marketing Organizations or niche tourism such as winter tourism development. Some minor private initiatives in winter tourism development were implemented in the last few years. The following are the most relevant:

Helvetas’ Community Based Tourism (CBT) initiative

Helvetas’ Community based tourism (CBT) was initiated in May 2000, with support of Helve- tas Swiss Intercooperation, which has committed to a long-term alliance. Community Based Tourism is a form of tourism where the local community has a substantial control over and involvement in its development and management; and a major proportion of the benefits remain within the community. Currently, sustainable networks of CBT groups were established covering all regions of Kyrgyzstan. The main objective is to provide institutional support and

31 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

implement a common marketing strategy, as mediary organizations in five destinations: well as to coordinate interaction and coop- Karakol, Jyrgalan, Bokonbaevo, Naryn, and eration within the CBT network. Osh. At least two destinations are actively involved in the development and promotion At the moment, there are some CBT groups of winter tourism, these are Jyrgalan and actively involved in winter tourism, such as Karakol. The Karakol area is well known for CBT Karakol, CBT Kochkor and CBT Arslan- downhill skiing. The building of the Kara- bob. Some of the CBT locations benefit from kol ski base was supported in terms of the pre-existing winter tourism infrastructure promotion and marketing. Because Jyrga- (mountain ski bases and paved roads with lan was developed for freeride and back available transport connections), while other country skiing it could potentially attract CBT groups make use of natural resources international tourists. In order to develop (snow covered mountains and slopes avail- and promote Jyrgalan, BGI supported the able for longer periods). A lack of winter development of local infrastructure by pur- tourism specific infrastructure (e.g. ski lifts) chasing a snow-cat, development of new stimulated the development of alternative guesthouses and obtaining ski equipment. ski tourism in those regions. Freeride skiing In addition, the local community in Jyrgalan (backcountry-skiing), cross-country skiing, participated in the experience exchange horse-back ride skiing or other types of win- study tours led by Arslanbob CBT and in ter activities (snow-how trekking, tubing) are visits to the Naryn Oblast. Furthermore, becoming more popular both among foreign BGI supported capacity building of local and local tourists. guides by arranging professional trainings for mountain guides and ski instructors.

USAID Business Growth The USAID BGI project will be seized in Initiative June 2018. Currently, there is no clear information about the follow up of the project. USAID’s Business Growth Initiative (BGI) In this regard, newly established Destina- project is aiming at strengthening the com- tion Management Organizations in Jyrgalan, petitiveness of Kyrgyz businesses by pro- Karakol and Bokonbaevo could be consid- viding firm sector-level sales and technical ered as potential partners for a future project assistance. The project works with stake- on winter tourism development. holders in the apparel, tourism and construction materials sectors to improve access to markets and increase sales, expand Winter Sport Project product offerings, and improve productivity, quality controls and financial management, The Winter Sport Project is a private initia- as well as to build other critical capacities to tive of Ms Edda Hergarten from Switzerland. make them competitive. Since 2014 Edda regularly visits Kyrgyzstan and has since provided trainings to local As for the tourism industry BGI has provided guides and ski instructors from all over Kyr- a number of local service providers’ train- gyzstan. The beneficiaries of Edda’s project ings and capacity building, and supported are guides from CBT groups, ski instructors marketing activities in order to promote Kyr- from remote villages. The last training took gyzstan on the world tourism market. It also place in November 2016. Professional ski provided additional efforts to promote World instructors from Graubünden Ski School Nomad Games II, as well as small tourist in- also participated. In 2017 Edda brought to frastructure and improvement activities. Kyrgyzstan three tons of ski equipment and As for winter tourism development activi- distributed it among CBT groups as well as ties BGI is supporting local business inter- small ski bases.

32 Many stakeholders who were interviewed basis TUK is organizing one day or weekend during the field mission stressed out the im- tours for the citizens and visitors of Bishkek. portance and positive impact of Edda’s project. However, it is important to note that in During the winter TUK organizes classi- the future Kyrgyz organizations should take cal mountain skiing activities to the near- the ownership of this ski instructors training est ski bases around Bishkek, as well as project. One of the follow ups of the project two-day programs of skiing in Karakol. could be the development and implementa- Since 2010 TUK, in cooperation with JICA tion of ski instructor standards. alumni, Bishkek Business Club, Business Development and Investments Council and The main contribution of the Winter Sport the Department of Tourism, is regularly or- Project is the creation of additional jobs in ganizing and conducting a charity festival remote regions, especially during the winter called “Kyrgyzstan is mountain ski country”. season. Therefore, cooperation and joint ef- In the last years TUK has trained over forts with the private initiative of Edda would 150 local people on snowshoeing and increase efficiency of a future winter tourism 200 local people on cross country ski- development project and could help secure ing. According to the information of TUK, its sustainability. the interest of local people in winter sport activities including snowshoeing, ski-touring and cross-country skiing is Trekking Union of Kyrgyzstan increasing from every year. It is also important to note that popularization of win- The Trekking Union of Kyrgyzstan (TUK) ter tourism activities among the younger was established in 2008 with support of the generation may contribute to an increase Norwegian Association of Mountain Tourism in number of jobs during the winter (DNT). The main objective of the TUK is to season. TUK is an important stakeholder promote outdoor activities and mountain (with a wide spread network of members) tourism among the local population of Kyr- who could become a central partner gyzstan as well as foreigners. On a regular for a winter tourism development project.

6 MARKET SYSTEM ANALYSIS

This section is dedicated to analyse the most relevant constraints that are currently inhibit- ing the potential of developing an inclusive and responsible winter tourism industry. Using a market systems approach, each of the constraints or market failures is explored to under- stand why this is happening in the first place (systemic constraint), and who is or should be responsible for addressing this constraint. The analysis proceeds then to suggest potential solutions seizing the opportunities that are present in the market, and the role of the project to incentivize the change to happen.

6 .1 Constraint 1: Shortage of qualified ski-instructors and guides with appropriate technical and methodological knowledge

Ski-base businesses and freeride destinations face the common problem of shortage of qualified ski instructors and guides to be able to improve or offer their winter tourism services and activities. Ski bases in particular face a shortage of ski instructors who can teach new clients or beginners, while freeride and ski touring destinations lack instructors and guides who have not only the right level of skiing techniques and expertise but also sufficient knowledge on how to assess and manage mountain hazards (accidents, bad weather, avalanches and terrain). This limits the opportunities of small enterprises and entrepreneurs to offer their tours and services to potential tourists. In the case of ski bases, where most of the clients are beginners, businesses have realized the importance of having in-base ski schools or available instructors to teach this new clientele so that they do not become demotivated and can eventually become repeat clients.

35 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

6 .1 .1 Systemic constraint: In general, there are no formal Training Insti- Absence of formal ski tutes providing certifications for candidates who wish to become qualified ski instructors instructor certification and and guides. Tourism and Sports Universities training opportunities do not offer these types of practical studies. The Kyrgyz Association of Mountain Guides The shortage of qualified ski instructors is offers a certification for candidate Mountain due to the absence of formal training op- Guides with complementary knowledge on portunities in Kyrgyzstan. In recent years technical aspects of skiing, but this is main- several isolated initiatives though have ly aiming at training mountain guides for taken place to develop the first network of activities like trekking and climbing. Edda ski instructors in Kyrgyzstan. Edda Hergar- Hergarten’s initiative is planning to bring in ten’s Winter Sports Project has success- the certification for ski instructors to Kyr- fully trained a first number of participants gyzstan, for which first conversations with around the country with the purpose of the International Ski Instructor Association building the first generation of ski instruc- (ISIA) are in place. Nevertheless, this initia- tors and guides, some of which have al- tive is on hold given the enormous workload ready started to work as such. While the faced by the project to undertake the up- first results of this initiative have been posi- coming planned training of ski instructors in tive, the main issue remains in its sustain- Kyrgyzstan of 2017. ability. The project depends on the private efforts of Ms Hergarten and a number of In that regard, a group of trained ski instruc- ski trainers, who can lead this project and tors by Edda Hergarten made a first effort to obtain financial support from foreign ski obtain the ISIA certification; however, in or- school partners and commercial sponsors, der to obtain this it is necessary to make the as well as their own personal financial re- petition on behalf of a union or association of sources. There is, however, uncertainty in ski instructors at the national level, since indi- its continuance, which emphasizes the ur- vidual instructors cannot get directly certified gent need to embed this training system in by the international association. From this it a national training institute so that ski in- can be concluded that in order to formalize struction may continue using a Training of a Training of Trainers system in Kyrgyzstan Trainers approach that is able to generate it is foremost necessary to formalize an As- new instructors in the long term. sociation of Ski Instructors. Constraints to its formation lie mainly in the lack of financial There is a similar upcoming Ski School resources and capacity to organize this as- project (to be initiated in 2018) led by Mr sociation among those instructors that are Vitaly Gergert, Owner of Gergert Outdoor already operating in the country. Rental Shops, in partnership with international sports such as Atomic and Barton. The objective is to develop a network of ski 6 .1 .2 Solution/innovation and snowboard instructors, who can promote these sports in the country and in- A two-tiered approach is proposed to imple- centivize a skiing culture among the popu- ment a solution to the problem of absence lation. The plan is to train and certify these of qualified instructors in Kyrgyzstan. In the instructors using a study tour and a training first place, the project is recommended to program. At the moment, the project is in support the formation of the first formal conversations with the International Snow- Kyrgyz Association of Ski Instructors. The board Federation although it is still unclear Association should count with specified whether this will also cover alpine skiing operational and financial plans to make it and other sorts of winter sports. From this sustainable in the long term. At present, initiative, it is evident that there are oppor- trained students are organized into a group tunities to target international brands as of mutual help via informal ways (Whatsapp possible partnerships to launch a training groups, telephone calls, other social me- of trainers’ course in Kyrgyzstan. dia), although it is evident that this informal

36 network could highly benefit from a more 6 .1 .3 Project intervention and professional form of organization. Form- partners ing an association is, however, not an easy task, as it requires to be accredited before In order to launch this innovation, the project the Ski Federation of Kyrgyzstan, and have is recommended to provide the following sup- concrete and well developed internal struc- port: tures, operational and financial guidelines, ■■ Technical support (via consultancy or that can help the association accomplish project staff) to form the Association in its objectives in a sustainable way. close cooperation and conversation with the informal network of Edda Hergarten’s In the near future, the Association should trained instructors. have Master Ski Trainers, who will be responsible for training and certifying future ■■ Technical support to engage financial candidates for ski instructors and guides and technical support from international according to ISIA regulations. The Asso- brands and commercial sponsors to fund ciation should be financially sustainable the first activities of the Association, in- (based on membership fees, income from cluding a potential study and training tour sales, services and activities), have clear to Europe37. governance structure and a set of concrete ■■ Support to broker a partnership with the activities and services for the community of Ski Federation of Kyrgyzstan and to ob- interested stakeholders. tain their support.

■■ Financial and technical support to obtain the ISIA stamp and cards (issued for new associations that become ISIA members)38.

6 .1 .4 Other features of this intervention

JOB RELEVANCE: GENDER RELEVANCE:

Ski instructor/guide are some of the In Edda Hergarten’s training there were 5 women most demanded professions in winter, out of 48 participants (ca 10%), although small, with potential to provide employment this figure has increased from 6% female rate for the youth. With increasing number participation during the first training. of tourists, each ski base would require between 5-10 ski instructors, plus opportunities to work as ski guides including in freeride destinations. There is a plan to develop an overall number of 54 ski bases around Kyrgyzstan in a small or larger scale, which will provide jobs for this type of profession.

PILOT DESTINATIONS: CO-DONORS:

Association to be based in Bishkek or in Edda Hergarten Karakol with membership of ski instruc- International brands and commercial sponsorships tors from all over the country Vitaly Gergert’s Ski School Project

37. According to ISIA rules, candidates who take the training for ski instructors have to be already very good skiers and have to master the respective equipment in conditions of native and prepared skiing slopes. It is hence relevant to continue providing further initial training for those who have already been trained by Edda Hergarten. 38. Please see the Minimum Standards of the Ski Instructors’ Training for a Membership of the ISIA on: http://www.isiaski.org/ en/2/msta.html

37 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

6 .2 Constraint 2: Lack of affordable access to winter sport and security equipment for instructors

One of the hindering factors for potential ski ■■ 30% discount on sale of ski equipment for instructors and guides to start providing their Trekking Union’s ski instructors (taking into services is the poor access to affordable ski account that final retail price is 10-15% and safety equipment, including ski sets and lower than in Europe). boots. Some CBT groups and destinations ■■ Possibility for instructor to rent ski equip- such as Jyrgalan and Arlansbob face less ment for free if his/her company or organi- of this problem because they have acquired zation brings a group of at least 5 custom- new or second-hand ski equipment through ers donations or subsidized sales from private initiatives such as Edda Hergarten’s or other hu- ■■ Furthermore, 15% out of total rent will be manitarian groups in the past. Either bought at given as commission to the company, or- a much lower price or donated the issue relies ganization or person who brings custom- on the dependency on these donations to ac- ers, which enables the ski instructor to pur- quire new equipment. The CBT group in Ar- chase equipment slanbob, for instance, is at the expectation that ■■ Possibility to acquire subsidized ski and new equipment will be provided by the Winter snowboard equipment from international Sports Project, which shows a certain attitude brands if a formal request is done by the of expectation for this type of donations. KCBTA through Gergert Sports Even if a certain group launches the initiative Despite the existence of the abovementioned of buying or collecting second-hand equip- commercial and socially-motivated agreement on donation from Europe, the transport ments CBT groups and informal networks costs can be prohibitive for CBT groups that of ski instructors have not yet capitalized on have very low operational budget. their benefits so that a transaction between ski businesses and equipment providers can sustain in the long term, thus diminishing the 6 2. 1. Systemic constraint: market’s dependence on donations. Poor linkages between community-based ski instructors and 6 .2 .2 Solution/innovation ski equipment providers The present analysis suggests to broker a long-term business relationship between Efforts to acquire new or used equipment via CBT groups and Gergert Sports (or other ski Ski Rental Shops or other providers with pres- equipment shops potentially), one in which ence in Kyrgyzstan are inexistent. This has ski instructors without financial means are resulted in neglecting opportunities to partner able to have access to affordable ski equip- with Ski Rentals and obtain access to afford- ment. In the first place ski instructors may able equipment. Gergert Sports is the larg- benefit from a free rental for the entire win- est sports equipment rental and shop in the ter season if long-term group rentals are country and represents several internationally- agreed with Gergert Sports. Furthermore, recognized sports brands in Kyrgyzstan, in- the analysis suggests to benefit from the cluding Atomic (Austria), Burton (USA) and potential of acquiring subsidized ski and Salomon (France). In partnership with the snowboard equipment for ski instructors Trekking Union, Gergert Sports has various on support from international brands. While types of commercial agreements that allow this partnership would certainly not be able access to ski equipment either for rent or for to last in the long term, it would however sales, including: represent an opportunity for ski instructors ■■ 15-50% discount for customers renting to acquire equipment for the first time and equipment through the Trekking Union. kick-start their business activities across

38 Kyrgyzstan. The logic of this collaboration aging financial resources, which originate relies on the premise that all parties win. out of the 15% commission paid by Gergert On one side, international brands are inter- Sports for group rental agreements for a ested to promote winter sports in countries wholesale purchase of ski and snowboard like Kyrgyzstan with the interest of expand- equipment on discount. ing their client base who will in the future demand their products and services. On the The aforementioned functions could be al- other side, CBT groups and informal net- ternatively carried out by the newly formed works of ski instructors wish to buy afford- Association of Ski Instructors, although this able ski equipment to allow them to initiate would entail that the partnership for ski an income-generating activity out of ski in- equipment acquisition takes place in a sec- structing or guiding. In that sense, this part- ond phase, once the Association is first ap- nership represents a quick win-win situation propriately developed. in the short and long term. 6 2. 3. Project intervention and For CBT groups and ski instructors to be able to place a request to international partners brands the KBCTA head office would need In order to launch this innovation, the pro- to be in charge of coordinating the general ject is recommended to provide the follow- request. At the same time, the analysis fore- ing support: sees that the KBCTA would coordinate the free rental of ski equipment (as a benefit ■■ Technical support (via consultancy or pro- out of group rentals) and the transportation ject staff) to broker the several types of of this equipment to various regions of Kyr- agreements between the KCBTA and Ger- gyzstan where CBT groups are established. gert Sports, and other potential sports rent- The KBCTA would be also in charge of man- als and shops

6 .2 .4 Other features of this intervention39

JOB RELEVANCE: GENDER RELEVANCE:

Ski instructor/guide are some of the most Limited start-up resources held by women re- demanded professions in winter, with main a key restriction for women entrepreneur- potential to provide employment for the ship in Kyrgyzstan. Although access of micro youth. Youth are, however, one of the and small enterprises (such as that of a Ski most marginalized groups in Kyrgyzstan Instructor) to credit and financial resources who face financial constraints. With in- is vital for the development and sustainabil- creasing access to sports equipment the ity of women entrepreneurs it has been noted project would ensure that this type of in- that women-entrepreneurs have access only to come-generating activity gets promoted “short-term” loans (sizes 500 USD to 10,000 among the youth. USD) in comparison to male-entrepreneurs. This is due to the fact that women generally do not have their own or borrowed capital or property, hence they cannot choose the financial strategies used by men or enjoy the same conditions of long-term and large-scale funding39.

PILOT DESTINATIONS: CO-DONORS:

The innovation will be placed in Bishkek International brands and commercial sponsor- with outreach to several CBT groups and ships ski instructors around the country.

39. Ibraeva, Gulnara; Anara Moldosheva, and Anara Niyazova. (2012), World Development Report 2012, Gender Equality and Development, background paper commissioned by the World Bank. Available on: http://siteresources.worldbank. org/INTWDR2012/Resources/7778105-1299699968583/7786210-1322671773271/Ibraeva_Kyrgyz_case_study_final_ Sept2011.pdf

39 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

6 .3 Constraint 3: Poor winter tourism product development and marketing skills

Development and marketing of innovative ity Management High School which offers winter tourism products are poor in Kyr- courses on Tourism and Hotel Management. gyzstan. Tour operators and tourism busi- Higher level of education focuses, neverthe- nesses (both small and large businesses) in less, on graduating professionals for middle general rely on a few standard activities to and higher-management levels of hotels and operate their businesses. Some destinations, other larger businesses. These graduates such as Karakol, face the issue of not being would not typically work in tour operator busi- able to offer a variety of winter tourism ac- nesses or travel agencies, and if they do, this tivities to tourists who would typically stay in is usually done on a temporary/part time basis the destination for one or two weeks. For in- while completing their university studies. stance, if tourists leave the ski base at 5 pm they would not know what to do at night in the It is important to mention that CBT groups do destination since the city does not offer other already conduct exchanges of experiences al- types of activities or services. though this is usually done on a one-to-one basis; a similar case occurs with DMOs which The latter represents a lost opportunity for have also taken the initiative to develop knowl- businesses in the regions to profit from diver- edge-sharing events, although these are spo- sified business activities and the increasing radic initiatives that receive financial support number of tourists in winter. by USAID BGI project.

Although there is need for a more practical- 6 3. 1. Systemic constraint: oriented system of superior education in the Inadequate training and country, currently the challenge relies on the need to obtain approval by the Ministry of Ed- knowledge exchange ucation in order to reform educational curric- opportunities on marketing, ula. In that regard, there is higher opportunity product development and to reform and improve the training curricula entrepreneurship of the KCBTA and other associations so that these meet the needs of winter tourism businesses and entrepreneurs. When referring to community-based businesses there is in general an absence of effective training and educational opportunities 6 .3 .2 Solution/innovation on the matter. The KCBTA offers two courses of 2-3 days focused on ‘product development’ It is recommended to work in partnership with and ‘marketing’ for community-based busi- the KCBTA and KATO to develop demand- nesses. Their effectiveness is, however, very driven training courses on effective market- poor as these courses are mostly focused on ing and product development. In the case developing innovative tourism products for the of KCBTA the partnership will focus on im- summer. Their readiness to provide innova- proving existing training courses. Both train- tions for winter tourism is still lacking. There ing courses have the opportunity to improve is a need to reinforce several aspects of these its methodology on how to implement data trainings, in particular regard to the ability of collection tools to enrich their knowledge of small business to collect market information market information, so that this helps improve and tourist preferences, as an input to develop the development of new demand-driven new and innovative winter tourism products. products. The product development training course, in particular, should be improved to On the other hand, there is a range of entre- include practical tools that enable the busi- preneurship and tourism courses offered by ness community gain new ideas of product Universities, in particular the Kyrgyz Turkish development, including knowledge-sharing Manas University’s Tourism and Hospital- events, study tours and B2B forums.

40 At present, KATO does not offer any train- ■■ Consultancy to improve and develop ing in these topics but is willing to invest in demand-driven training courses on prod- the development of such training courses as uct development and marketing for CBT they believe there is demand for this type of groups and tour operators. services in the association. ■■ Opportunity to model these courses against the Start and Improve Your Busi- 40 6 .3 .3 Project Intervention ness for Tourism methodology , in specific regard to the Improve Your Business and partners module and sub-module on marketing and product development. This innova- To realize this innovation the project should tion would profit from the availability of provide the following support: Master Trainers in Kyrgyzstan who are actively operating in the country.

6 .3 .4 Other features of this intervention

JOB RELEVANCE: GENDER RELEVANCE:

Marketing and diversification of winter The diversification of winter tourism products will tourism products will guarantee the crea- have a good impact on women’s employment as tion of more jobs, not only direct, but also some types of jobs, which have emerged with the indirect and induced jobs, as these new advent of tourism, are particularly attributed to services and activities will require them- this group. These include horse riding guides, selves the collaboration with other inter- exhibitors in cultural workshops and cultural related sectors. events, marketing and management of thermal spring areas. Interior design and other services to hotels and guesthouses are also usually taken up by women.

PILOT DESTINATIONS: CO-DONORS:

Bishkek None

6 .4 Constraint 4: Conflicts between the ski business community and local populations

The establishment of ski resorts has un- but still demand more benefits. In one par- intendedly led to tensions between the ticular case, the tension escalated to a point business community and the local popu- where the ski resort was forced to close op- lations that reside in the nearby areas. Ski erations temporarily leaving 26 employees businesses argue that despite having all from nearby villages unemployed. After this necessary legal requirements to run their event, a stakeholder meeting was under- business (land lease permit/purchase and taken with the mediation of government au- registration) one of the main problems is the thorities and Local Council representatives, constant violation of private property by lo- but the conversations failed. As the situation cal populations who wish to use these lands worsened, the ski business owner resorted for cattle grazing or other activities. From to request government’s assistance to ‘deal’ the businesses perspective, local residents with the problem. have benefitted from jobs in the ski base

40. See ILO’s Start and Improve Your Business program on: http://www.ilo.org/empent/areas/start-and-improve-your-business/ WCMS_537070/lang--en/index.htm

41 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

Similar conflicts have emerged in other ski 6 4. 1. Systemic problem: regions of the country; however, in most of absence of effective resolution the cases the tension was solved by calling the central government authorities to pro- bodies and dialogue vide security to the ski base or to ‘appease’ mechanisms local populations, without showing any real long-term solution to the tension between Conflicts between ski businesses and local businesses and local populations. In the populations emerge and are poorly man- opinion of ski businesses, this represents a aged due to some factors: success in the resolution of the conflict. ■■ The absence of consultation mecha- Nevertheless, this is only a quick-solution to nisms with local populations as a preven- an ever-escalating conflict which will bring tion measure of potential disputes. more constraints to the future development of winter tourism in the country if not prop- ■■ The absence or ineffectiveness of resolu- erly managed. Furthermore, the availability tion bodies and dialogue mechanisms to of contacts in government is a feature that bring a solution to this type of conflicts. In seems to be only part of medium and large- other sectors of the economy, such as in scale ski businesses, which effectively mining41, similar conflicts have emerged leaves smaller businesses and entrepre- in the past, and the same pattern can be neurs without resolution resources when said to be occurring with the increasing they face similar situations. number of ski bases around the country.

■■ Lack of awareness campaigns for local Local councils are the main represen- populations of the potential benefits of tation of local self-government admin- winter tourism businesses in the area. istrations, which administer executive With Kyrgyzstan’s wave of privatization power in oblasts, districts and towns as of land initiated in 1998 75-80% of the stipulated by the constitution and laws. country’s arable land was privatized Councils manage the Land Redistribu- while only of 25% remained in govern- tion Fund’s pasturelands and are in- ment’s control42. Local populations who volved in dispute resolution issues. A have used these lands for agriculture and few councils have received training in pasture have not been properly informed dispute resolution and land legislation of the changes, and are often neglected but their capacity is often low. Councils when private investors buy land. In the may be consulted by district judges to same regard, another contributing factor advice on the resolution of an issue and are the vague laws that do not estipulate make a decision. the obligations of private companies to the local communities, or the resolution resources they have to their disposition It is crucial to outline that while foreign in- when they face this type of problem. vestment and business growth are necessary to create jobs, allowing the establishment of ski bases will not automatically 6 .4 .2 Solution/innovation result in the creation of local jobs if conflicts of this type keep emerging. Understanding The analysis suggests working in partner- and integrating the needs and interests of ship with the Government of Kyrgyzstan’s local populations is key to create sustainable local self-governing bodies to create an ap- winter tourism businesses in the country. propriate consultation and resolution mechanism to be embedded as part of the Local Councils in areas where investments are present to develop new or existing ski bases.

41. Gulette, David. (2014). Conflict sensitivity in the mining sector of the Kyrgyz Republic, OSCE Academy. Available on: http://www.osce-academy.net/upload/file/Mining_report_final.pdf 42. USAID. (2016). Property rights and resource governance of Kyrgyzstan, USAID country profile. Available on: https://www.land-links.org/wp-content/uploads/2016/09/USAID_Land_Tenure_Kyrgyzstan_Profile.pdf

42 The body will, in the long term, also under- Local Councils. This may take place in take the role of awareness raiser to present the form of training or close-consultancy possible future disputes. 45 advice with the members of the newly formed body. 6 .4 .3 Project intervention and ■■ Technical or financial support to draft uniform procedures and administrative partners standards for the body to operate.

The main partnership would be the respec- ■■ Support to elaborate a pilot awareness tive Local Councils and the intervention campaign. would represent:

■■ Technical support to form the consultation and dispute resolution body within

6 .4 .4 Other features of this intervention

JOB RELEVANCE: GENDER RELEVANCE:

Ski bases so far have a potential of creat- As women own about 14% of the farms in the ing up to 80 direct jobs on average per country43 they are likely to be greatly impacted year. Ski bases like Chunkurchak and Or- by land disputes or conflicts with businesses. lovka represent those that provide most Women are also key to conflict resolution as they employment opportunities, but could represent almost a third of the local network of potentially provide more if, not only are volunteers that have supported other donor-fund- ski bases established on a mutual un- ed projects in local dispute resolution44. derstanding with local populations, but also provide jobs to the local workers of nearby villages. PILOT DESTINATIONS: CO-DONORS:

Chunkurchak; Zil USAID has been involved in providing technical assistance to land reform via legislative development, legal aid and public education. From 1999 to 2005, USAID funded the Kyrgyzstan Land Reform Pro- ject, which had three major components (rural land reform, urban land reform, and water law reform), with a focus on educating Kyrgyz citizens about their rights to obtain land and empowering to participate in agricultural and urban market opportunities. Inter- ventions included training; the creation of a website and sponsored a radio program that broadcasts land reform information. This represents opportunities to use these existing resources to advance SECO project’s objectives. There is also opportunity to use the resources and advice of the International Labour Organization to facilitate the implementation of ILO’s Indigenous and Tribal Peoples Convention (196)45, its guidelines and recommendations on how to operationalize consultation and resolution bodies.

43. USAID. (2005). Revitalizing communities through land reform. Available on: http://www.chemonics.com/OurWork/OurPro- jects/Documents/Kyrgyzstan%20Land%20Reform.pdf 44. ILO. (2013). Handbook for ILO tripartite constituents, understanding the indigenous and tribal peoples conventions 1989 (no. 169). Available on: http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---normes/documents/publication/ wcms_205225.pdf 45. ILO. (2013). Handbook for ILO tripartite constituents, understanding the indigenous and tribal peoples conventions 1989 (no. 169). Available on: http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---normes/documents/publication/ wcms_205225.pdf

43 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

6 .5 Constraint 5: Lack of effective coordination among tourism businesses and relevant stakeholders in destinations

The lack of coordination in destinations be- 6 .5 .1 Systemic constraint: tween the several stakeholders that are rel- DMOs lack sustainable evant to the development of winter tourism is notorious across the country. This lack business and financial plans of coordination in the tourism industry has to be able to operate in the caused to miss out on opportunities to cre- long term ate new sorts of business together, and benefit from sharing information to maximize The lack of effective destination coordina- the benefits of increasing tourism. In some tion can be attributed to the fact that DMOs destinations, businesses see each other as are operating without sustainable business competition and are reluctant to share in- and financial plans. Some of the constraints formation on their activities and to look for to operate sustainably are: forms of cooperation to maximize their prof- ■■ Dependency on the financial contribu- it. Furthermore, business owners are not tions of USAID. All DMOs that were in- aware of the activities of government related terviewed have budgets that are at least to tourism or of the public events organized 90% dependent on USAID contributions. by the municipality, which inhibits the busi- In one particular case, the DMO operated nesses’ potential to profit from these types almost entirely out of USAID’s budget. of events. ■■ Poor diversification of financial resourc- Coordination and information-sharing are es. Membership fees do not contribute two functions that are typically undertaken substantially to the DMO’s budget as by DMOs; nevertheless, as it was evidenced they do to CBT’s budgets. This is largely during the field research, DMOs are still in- due to the DMOs’ inability to attract new effective and lack the capacity to continue members. their activities without the substantial sup- ■■ Membership is mostly concentrated port from donor-funded projects. While a on the accommodation business. Most few DMOs have somehow worked with gov- members of DMOs are hotels or guest- ernment authorities, the majority still lack house businesses, which emphasizes an actual integration of government into the the need to attract other types of clients, DMOs. The relationship with government is such as tour operators, ski bases, restau- usually just for consultation purposes. At the rants, and travel agencies, among others. same time, government does not financially The benefit of attracting different types of contribute to the development of destina- businesses is that opportunities for part- tions, leaving DMOs to practically operate as nership may emerge not only between travel agencies or business associations for competing businesses but also between a particular destination. non-competing businesses. Further- more, they also would reinforce the DMO in their structure and their work impacts.

■■ Poor linkage to the government’s relevant authorities, including the Department of Tourism, to be able to engage this stakeholder as a contributing member.

44 ■■ Poorly defined activities and services: agency). This represents an opportunity DMOs in Kyrgyzstan are effectively acting to work with those DMOs that are already as a hybrid type of organization between working on developing their business plan a DMO and travel agency/tour operator. to continue after USAID’s funding ends. As assessed during the field visit, sev- Some of the potential partners include DMO eral DMOs lack demand-driven services Osh, DMO Karakol and DMO Alai. including: client satisfaction feedback system (to collect market information, demand and trends); capacity building and 6 .5 .3 Project intervention and training for members (on several issues partners incl. innovative product development); destination marketing; information shar- The project is suggested to work in col- ing; sector coordination (including with laboration with DMO Osh and Karakol to government); information on how to improve their business plans. To do this, start and improve your tourism business, the project should provide the following event-organization or dealing with incom- support: ing operators and foreign tour operators. ■■ Consultancy or project staff (technical expert) to help DMOs assess their weak- 6 .5 .2 Solution/innovation nesses, and existing business plans and help formulate innovative financial and The analysis suggests strengthening capac- organizational plans. This could be done ity of selected DMOs through the piloting of using ILO’s Destination Management innovative and sustainable financial and or- Good Practice guide46, which provides ganizational plans based on best practices. practical guidelines to create and manage DMOs without much project support. With the upcoming close of USAID BGI pro- Support, though, should be accompa- ject, it is likely that several DMOs will be left nied by some international consultancy under-funded and at the risk of failing or or project advice to help kick-start and turning into another type of business (travel test the improved business plans.

6 .5 .4 Other features of this intervention

JOB RELEVANCE: GENDER RELEVANCE:

Tourism is known to contribute to the Effective DMOs should have laws and established creation of approximately 107,000 jobs practices to prevent commercial, sexual or any in Kyrgyzstan. DMOs are one of the or- other form of exploitation and discrimination, in- ganizations with the highest potential to clusive of women. As leading agencies in a desti- multiply the benefits of tourism in a des- nation, it is the task of DMOs to oversee that good tination, in terms of business growth and business practices in terms of gender equality job creation. Since DMOs touch on sev- are implemented in the destination. eral issues of development (marketing, coordination, sustainability), their contribution to employment is likely to be high.

PILOT DESTINATIONS: CO-DONORS:

Karakol; Osh and Alai None

46. ILO. ASEAN Small Business Competitiveness Program. (2016). Destination Management Good Practice Guide. Available on: https://sme-tools.org/destination-management-package/

45 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

6 .6 Constraint 6: Lack of (winter) tourism relevant data and facts

In Kyrgyzstan the availability and quality of relevant data, as well as the development tourism relevant data, figures and facts is of impactful marketing and branding cam- strongly limited. Official statistics on tourism paigns at the national level. are collected by the National Statistics Com- mittee of Kyrgyzstan. Yet, the agencies do In Kyrgyzstan, there are several institu- not provide the source of methods used to tions of high education. Yet, these are not generate data. This raises the issue of the adequately linked to public institutions and data’s reliability and validity. Furthermore, as a result there is a general lack of aware- the lack of data quality leads to an insuf- ness for tourism research, which includes ficient monitoring of tourism activity in Kyr- the collection and publication of tourism rel- gyzstan. As a result there is no clear under- evant data. Additionally, due to the absence standing of spending by international and of an efficient registration process there is domestic visitors, visitor arrival and accom- no reliable system for registering foreign modation statistics, and forecasts of tourist tourists for statistical purposes to estimate numbers and expenditure. Moreover, the the overall economic impact of tourism. The limited data made available are not released low level of management in operations and consistently and thus offer no insights in a lack of transparency have created condi- developments over time and trends in gen- tions for distorted reporting and the devel- eral. Yet, tourism practitioners and tourism- opment of a shadow economy. This leads to related stakeholders rely on the availability a situation where the majority of the transac- of tourism relevant data, figures and facts tions is not recorded and, thus, not visible in to improve their product development, mar- the data made available. keting activities and destination branding. This had led the Department of Tourism to allocate their scarce resources into funding 6 .6 .2 Solution/Innovation for participation in international fairs where the benefits might be few (e.g. Novosibirsk). To implement a system that allows collection To provide a picture of the role tourism plays and publication of tourism relevant data, in Kyrgyzstan and its impact on the econo- (sufficient in both qualitative and quantita- my is also critical to attract foreign investors. tive terms), it is recommended to support the funding of a tourism research cluster. This cluster ideally consists of members 6 .6 .1 Systemic constraint: from universities, the Department of Tour- Lack of an efficient ism and the Ministry of Economy. To ensure that qualified personnel is in control of op- registration process and lack erational work it is recommended to inte- of skill within the Department grate former students who hold a master’s of Tourism degree from the universities involved. This coordination mechanism can also serve as On a systemic level, there are two main a bridge between the Department of Tour- constraints that lead to a lack of tourism ism and guest associations of tour operators relevant data, which is insufficient in both (e.g. KATO) who are strong participants and qualitative and quantitative terms. The De- sponsors of international fairs. The knowl- partment of Tourism, which is part of the edge generated by the private sector in this Ministry of Culture, Information and Tourism case, from their transactions and relation- of Kyrgyzstan, lacks the relevant financial ships with foreign tour operators and the resources, but also capacities and academ- international market can be key to shaping ic skills to implement a system that supports strategic tourism policies and to inform on the collection and publication of tourism current market trends.

46 6 .6 .3 Project intervention and The SECO project could support this inter- partners vention by providing:

This project needs to be initiated by the De- ■■ Political support to initiate tourism re- partment of Tourism with the Government of search (e.g. to work on a new data sys- the Kyrgyzstan, but at present times the De- tem such as a national Tourism Satellite partment is not able to launch such an ini- Account). tiative due to lack of knowledge and capacities. In this sense, the Ministry of Culture, ■■ Technical support for system- and knowl- Information and Tourism needs to allocate edge transfer from the relevant bodies additional resources to this Department. within the Swiss Federation like from the Bundesamt für Statistik BfS. Furthermore, the Universities should offer ■■ Being a member of the UNWTO the Swiss not only tourism education, but also should Federation (SECO) could bridge UNWTO strengthen their scientific research. They with the Department of Tourism to moti- would profit in two senses: a) they would vate them in direction of a data collection contribute with new data and knowledge to and research. a more professional tourism system and its development (active role, recognition with- ■■ Financial support to build a “Tourism in the private tourism business industry), Research Centre/Office” with members and b) would get actual data for their core from the Department of Tourism, Ministry activities like publications and education. of Economics and Universities.

6 .6 .4 Other features of this intervention

JOB RELEVANCE: GENDER RELEVANCE:

No direct job relevance of the interven- The intervention itself has no direct gender rel- tion – the key benefit is new and addi- evance. Similarly as the job relevance, the further tional knowhow about the tourism indus- tourism development will have an impact on the try. gender aspect. If tourism can grow, new jobs in In a later stage the positive influence of remote areas will be created. Especially the new the new knowledge will have a positive jobs in the service industry will be excellent op- impact on the tourism development all portunities for women (working in all types of ac- over the country, mainly in mountainous commodations and in the gastronomy market as / remote areas. This definitively will have receptionists, cooks, waitresses, cleaning staff, an important relevance for job creation in and back-office) and as guides as well. different types of jobs (service industry (accommodation, marketing, gastronomy, and guides), technicians and others.

PILOT DESTINATIONS: CO-DONORS:

Nation-wide relevance. Universities (publication opportunities and data for education modules).

47 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

6 .7 Constraint 7: High number of tourist accidents and risk at ski destinations (ski bases and freeride destinations)

Kyrgyzstan’s ski bases in general do not fol- development of the winter tourism indus- low internationally-recognized safety stand- try in Kyrgyzstan, as these may become a ards to run their business. For instance, of disincentive for potential tourists to visit ski the 27 ski lifts operating in ski resorts, only a resorts. Tour operators would usually ask quarter meet international safety standards. potential clients to specify whether they This, in combination with other failures to have insurance to cover potential accident follow appropriate safety standards, has re- costs before purchasing a package. This sulted in a high number of serious accidents does not represent a problem for inter- on ski slopes and off-piste areas. According national tourists who are usually covered to the Mountain Guides Association, there under an international insurance scheme; is an average of 50 serious accidents taking it does, however, disincentive potential place ever year on ski bases. This number national tourists, who represent the main does not account for minor injuries, or ac- type of client for ski resorts. cidents taking place at freeride destinations, where avalanches have been reported to 6 7. 1. Systemic constraint: occur and caused deaths. Currently, there is no accurate account of avalanche acci- Absence of safety standards dents, although the freeride destinations and country-wide safety that were consulted reported to be aware of information providers 1-3 fatalities due to avalanches every year. The existing challenges in Kyrgyzstan to Some of the safety areas where ski resorts be able to comply with all safety rules and and freeride destinations have failed to standards for ski destinations are many, comply are: and may find their root cause in a variety ■■ Appropriately trained general staff on safe- of areas. While the lack of helicopter and ty rules and procedures. ambulances may be due to the lack of government’s investment, the lack of medical ■■ Lack of medical teams. teams may also be due to the poor attrac- ■■ Unavailability of rescue teams in case of tiveness of providing services to the ski in- emergencies. dustry, or the unavailability of medical staff in the country. ■■ Poor controlling systems for infrastructure and poor infrastructure in overall. Considering the opportunity to create a ■■ Unavailability of rescue equipment and fa- change in safety standards of ski destina- cilities (e.g. helicopters, ambulances). tions, this analysis suggests that the absence of safety standards and their poor ■■ Lack of codes of conduct to create tour- application on ski destinations is caused ist awareness and diminish risk-seeking by the absence of effective responsible in- behaviour. stitutions (e.g. the Kyrgyz Ski Federation) to ■■ Absence of avalanche risk warning sys- supply this type of information and oversee tems and nation-wide meteorological sta- its application. At present, ski resorts and tions to warn about snow condition.The destinations do not have access to safety aforementioned factors are a threat to the and security guidelines. Professional con-

48 sultancy services are available in Kyrgyzstan 6 .7 .3 Project intervention and but are inaccessible to smaller ski resorts or partners destinations due to their high cost. There is also poor coordination between ski resorts In order to realize these objectives, the pro- to invest in an avalanche risk warning sys- ject has the opportunity to partner with: tem through the installation of meteorologi- ■■ Mr Samuel Maret, Professional Adviser on cal stations, which is also fuelled by the low Ski resort infrastructure and Safety to de- capacity of the Ministry of Emergency Situa- velop and adapt international safety stand- tions and the Meteorological Agency to pro- ards to the Kyrgyz Republic on skiing safety vide this data. guidelines and infrastructure (guidelines); undertake a training targeting the Ministry 6 .7 .2 Solution/innovation of Emergency Situations and ensure appropriate piloting of standards in at least 3 ski destinations across the country. Given the project’s capacity to implement a solution, the analysis suggests creating ■■ Mr Johannes Chudoba and group of ex- a network of adequately trained data and perts on avalanche risk warning system information providers from the Ministry of to create a network of ski destinations Emergency Situations and the Meteorologi- willing to install meteorological stations cal Agency so that these agencies are ena- for data collection, develop a website for bled to generate live-data on snow condi- live-streaming, and undertake a train- tions and promote safety standards for all ing for national data providers on how to ski resorts and destinations. manage and use the system.

6 .7 .4 Other features of this intervention

JOB RELEVANCE: GENDER RELEVANCE:

Improving safety and preparedness for International statistics on the gender distribution avalanches of ski destinations is key to of winter sport injuries show that both men and make these resorts more accessible to women are almost at the same risk of participat- tourists, hence, to promote winter out- ing in ski accidents or suffering ski injuries, with door tourism in Kyrgyzstan. The latter will men having a slightly higher rate than women increase opportunities to create services (55% vs 45%). and activities in these areas that are un- There is no data at present to know more about reachable given the low safety condi- the potential of job creation in safety areas for tions, not only by tourists, but also by women, although it was evidenced from the in- small-scale entrepreneurs. terviews that women are increasingly interested Lastly, with the emergence of this type in working on ski resorts and destinations as in- of safety data and information providers, structors, guides or general staff. there is opportunity to create new types of jobs that are highly demanded by ski resorts at the moment.

PILOT DESTINATIONS: CO-DONORS:

Three pilot destinations to be further ex- None. plored depending on feasibility of each ski base.

49 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

6 .8 Constraint 8: Lack of coordination among private initiatives

Product innovations go through four basic in Karakol) one needs to recognize that stages: (1) innovation, (2) growth, (3) ma- these are not yet fully functional units. turity and (4) decline. Tourist destinations Members of these organizations claim that tend to follow similar patterns along the membership fees are often too high and that Tourism Life Cycle (see section 4.1.4) be- even though they pay a membership fee ginning with a stage of exploration and in- the association often fails to provide a fea- volvement, where local people start to notice sible benefit to its members. For instance, that there are increasing numbers of visitors the Ski-Cluster consists of 14 members in coming to their area. They start businesses total, but only four members pay the mem- to provide accommodation, food, guides bership fee that grants them voting rights. and transport47. Given the inability of existing organizations to create a feasible benefit for its members Kyrgyzstan is in the beginning stages of the and the overall lack of formal networks and Tourism Life Cycle. Consequently, the tour- associations (e.g. a union/association of ism industry in Kyrgyzstan consists of sev- DMOs, similar to VSTM in Switzerland, is eral isolated businesses started by private yet to be formed), tourism stakeholders who people. The project of Edda Hergarten to lack know-how do not have the opportunity train ski instructors or the investment by to learn from stories of success and failures Mr Pleisch in Orlovka may be mentioned as of others (e.g. how to interact with the local examples in this regard. The industry cur- population during an investment process or rently lacks formal networks of sector-relat- how to develop new products that take an ed business and stakeholders that allow a interrelated sector-approach). Consequent- more organized and coordinated approach ly, the lack of tourism networks leads to a to tourism development. This lack of coor- situation of missed chances, where know- dination hinders the efficiency of the busi- how is not shared and an insufficient alloca- nesses and the development in Kyrgyzstan tion of resources hinders the development overall. It also negatively impacts the quality of the tourism industry mainly in terms of its of tourism-related business activities. quality and effectiveness.

6 .8 .1 Systemic constraint: 6 .8 .2 Solution/innovation Lack of a tourism network, On the one hand, an environment needs to lack of an organized / be created that allows existing associations coordinated tourism industry, to increase their impact and create feasi- lack of a “tourism voice” ble benefits for its members. On the other hand, tourism-related stakeholders who The tourism industry in Kyrgyzstan is yet to are yet to organize their business activi- coordinate tourism-related business activities need support in establishing networks. ties among its private players. As a result, This concerns sectors such as the ac- many of the business activities across Kyr- commodation providers in Chunkurchak, gyzstan are isolated in their approach and trained ski instructors by Edda Hergarten, therefore lack efficiency. Although some cable car companies or even DMOs in all of players have formed associations (e.g. Kyrgyzstan. Existing associations are rec- the Association of Hotel and Restaurant ommended to reconsider their added value Businesses of Kyrgyzstan, the so called to the tourism value chain and reorganize “Ski Cluster” within the roof organization their activities in a way that its members “Mountain Cluster or the Hotel Association perceive a membership as useful.

47. Kozak, M. & Martin, D. (2012). Tourism life cycle and sustainability analysis. Tourism Management 33(1). p. 188 – 194.

50 Fully functional associations and networks ■■ Bridging Swiss Associations with the Kyr- allow a collective approach to solve com- gyz tourism sector (e.g. Hotelleriesuisse, mon issues among sector-related stakehold- Seilbahnen Schweiz, VSTM). ers. They furthermore support the exchange ■■ Technical support to review existing or- of common know-how and the counselling ganizations and/or initiate the foundation of others, who lack experience on certain of new associations and supervise nego- aspects of business; for example, in terms tiations among the stakeholders to maxi- of legal aspects or medical aid systems. mize the benefits for (potential) members.

Moreover, associations serve as a central ■■ Supporting the new founded (re-organ- contact point and allow others to approach ized) associations building ideal organi- a specific sector within the tourism industry zational structure, sustainable financing more easily. This is of particular importance schemes and formulating strategies and when it comes to (political) lobbying, net- action plans. working within the industry sector or media ■■ Technical and financial support to distrib- information. ute the information about the benefits of the association to convince businesses to 6 .8 .3 Project Intervention become a member. and partners ■■ Support to found the Kyrgyz Tourism Federation (KTF) as an umbrella institu- In order to support the foundation of asso- tion for tourism relevant associations (in- ciations the project is recommended to pro- stitutional membership). vide the following support: ■■ Supporting the new founded KTF in ■■ Consultancy to propose potential associa- building an ideal organizational structure, tions to different sector leaders (e.g. the a sustainable financing scheme and for- ski-base businesses / mountain cable-car mulating a master plan and implementa- businesses). tion concepts (similar to Schweizer Tour- ismus Verband STV).

6 .8 .4 Other features of this intervention

JOB RELEVANCE: GENDER RELEVANCE:

Associations give the tourism industry a Tourism development will have an impact on common voice (per industry cluster) and the gender aspect. If tourism can grow, new allow effective lobbying, which strength- jobs in remote areas will be created. Especially ens the specific position within the tourism the new jobs in the service industry will be ex- industry and the economic system in Kyr- cellent opportunities for women (working in gyzstan. In addition, it leads to a more ef- all types of accommodations and in the gas- ficient product development approach and tronomy as receptionists, cooks, waitresses, accelerates the development of the tourism cleaning staff, and back-office) and as guides industry as a whole. This in return creates as well. jobs in Kyrgyzstan. PILOT DESTINATIONS: CO-DONORS:

E.g. the accommodation sector in Chunkur- The Department of Tourism. chak may be considered as a pilot destination to form an association (private accommodations like Supara II or the private hotel complex near the ski-base valley station). The ski-base investors in about 20 destinations or the already founded DMOs could be faced as pilot associations as well.

51 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

6 .9 Constraint 9: Lack of information on how to start and run a ski business

Starting a ski resort business for small and this type of income-generating activity. Ge- medium sized enterprises is particularly neric permits and procedures to start, regis- difficult in Kyrgyzstan, although some of ter and formalize a business are led by vari- these constraints do also impact the abil- ous government departments, which makes ity of larger enterprises to inquire into this the process for small entrepreneurs far type of business. There is record of entre- more complicated. Although the concept of preneurs who have started operating small a one-stop shop for entrepreneurs does ex- ski lift businesses for a short-while, just to ist in Kyrgyzstan, this only incorporates the see their investments be taken away by gov- legal procedures of four operating agencies: ernment authorities or private owners due to the Ministry of Justice, for business regis- the lack of duly-obtained land permits to op- tration; the National Statistics Committee; erate. Small entrepreneurs lack the neces- the State Tax Inspectorate and the Social sary technical and legal information to start Fund. For ski businesses, there are further and run a ski business (or any other type of requirements that need to be obtained such winter tourism business), in special regard as land lease permits, which are arranged to the following points: and negotiated though the executive bodies of local councils and the registration of ■■ Information on how to acquire a permit property (leased or purchased) under the for the lease or purchase of government State Registration Service. controlled land

■■ Information on the technical require- The Kyrgyz Chamber of Commerce and In- ments of both land and ski resort infra- dustry is up to date the only entity providing structure to operate adequately and in an information portal and service for foreign compliance with internationally-recog- investors, Kyrgyz businesses and entrepre- nized standards neurs on how to start a business. Neverthe- less, their service covers only those steps ■■ Other general information on how to start that are common to mostly all businesses and register your business to the perti- and lacks the extra information that is de- nent government authorities manded by ski businesses (land permits for Currently, some ski areas in Kyrgyzstan have lease or purchase, and technical require- started operating without conducting a full ments to install cableways and other types assessment of land and snow conditions to of machinery). The latter are usually pro- install a ski base, which makes these places vided by private business consultants who prone to malfunctions and accidents. are not engaged in the business of advising entrepreneurs on the legal requirements to start a ski resort business. 6 .9 .1 Systemic constraint: absence of a one-stop shop 6 .9 .2 Solution/innovation or consolidated portal for ski resort entrepreneurs The project is advised to implement a small- scale, comprehensive solution to provide the In spite of the significant increase in inter- necessary business information (both tech- est to start ski resort businesses there is still nical and legal) for small and medium sized an absence of one-stop shops for entrepre- entrepreneurs, through the development of neurs to access information on how to start a one-shop portal to be embedded as part

52 of the improved Ski Cluster Association. The ■■ A business directory of all interrelated busi- portal will serve as an entry point and infor- nesses and services to put at the disposi- mation centre for potential entrepreneurs, tion of new entrepreneurs and investors. which should also provide linkages to other types of financial and business development 6 .9 .3 Project intervention and services necessary to start and improve your business including financial providers, ski partners resort business development consultants, The project will seek to partner with the Ski accommodation and food services provid- Cluster or a similar (new) association to de- ers, among others. In this sense, the portal velop this new service as part of their activi- should provide: ties. It is expected an initial co-investment ■■ A brochure containing all necessary in- will be necessary to compile and confirm all formation on how to start a ski resort the necessary information, and to develop business. the new business directory.

6 .9 .4 Other features of this intervention

JOB RELEVANCE: GENDER RELEVANCE:

Small businesses and entrepreneurs who Although ski resort entrepreneurship is usu- were mostly impacted by the absence ally an area dominated by male entrepreneurs, of information on how to start and run it is a known fact that winter tourism products, a business have the potential of creat- including ski resorts, present an opportunity for ing up to 20 jobs in the ski resort area. A female workers and entrepreneurs to integrate number of failed business initiatives were themselves into the winter tourism value chain spotted during the conversations in the through the creation of interrelated types of busi- field, which have greatly demotivated en- ness and through the take up of different employ- trepreneurs from either re-initiating or ex- ment opportunities in ski resorts. panding their ski resort business, mainly due to the lack of information or due to the uncertainty created by this.

PILOT DESTINATIONS: CO-DONORS:

Country-wide None

53 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

RESORT SKI BASES RESORT SKI BASES

ZIL’ Ski Resort Chunkurchak’ Toguz-Bulak’ Kashka-Suu’ Ak-Tash’ Ski ‘Oruu-Sai’ ‘Politeh’ Ski ‘Norus’ Ski SKI-Tatyr’ Ski Chon-Tash’ ‘Karakol’ Ski ‘Orlovka’ Ski ‘Too-Ashuu’ Average Resort Ski Ski Resort Ski Resort Ski Resort Resort Ski Resort Resort Resort Resort Ski Resort Resort Resort Ski Resort Bases

Distance from Bishkek: 35 30 40 35 35 35 27 35 25 20 403 100 135 73,46153846 Average Distance Slope length: 1300 1000 2800 2000 1000 2800 1800 1400 1200 3500 2900 3000 2058,333333 from 73 Bishkek: Max altitude: 2.450 2.820 2.250 2.270 2.700 2.200 2.250 1.980 3.040 1.860 3000 2.438 Slope length: 2.058

Vertical drop: 600 370 500 400 350 620 300 740 590 1500 597 Max altitude: 2.438

Vertical Ski lifts: 3 6 1 2 1 1 1 1 1 1 5 2 2 2,076923077 597 drop: Lift ticket (adults): 1100 1.200 1.000 1.000 500 500 500 500 1200 1000 800 845,4545455 Ski lifts: 2

Lift ticket (kids up is it still is it still Lift ticket 700 800 500 500 300 300 250 300 700 600 600 504,5454545 845 to 12): open? open? (adults):

Lift ticket Gear rental: 600 1.200 800 800 600 500 1000 600 700 755,5555556 (kids up to 505 12): Sauna, snow- Kids corner and Small guest- Skating rink, Small guest- A small hotel Small guest- Small guestho- Sauna, snow- Sauna, hotel, Nice mobile tours, a free wi-fi house sports ground, house nearby with 10 rooms, house near by sue mobile tours, kebab grill Guesthoues + a Additional services: small hotel a hotel for and a small sauna and they have hotel, and ice skating rink Gear rental: 756 65 people café an ice skating skating rink rink TUK and other It’s possible to It’s a great ski TUK and other TUK and other Some tour TUK and other TUK and other It’s a great TUK and other TUK and other locally based bring western base for ski locally based localy based compaies are locally based locally based ski base for localy based localy based tour companies tourits to this ski touring / they tour companies tour compaies creating tours tour companies tour companies western tourist tour compaies tour compaies send groups to base for 1 day. have great send groups to send groups to to this ski send groups to send groups to in Kyrgyzstan. send groups to send groups to this ski base There is a nice deep snow. this ski base Zil Ski Resort resort. But its this ski base this ski base It’s a great Zil Ski Resort Zil Ski Resort - Travel Organisations / but it’s not very hotel nearby. Its possible to but it’s not very not big enough but it’s not very but it’s not very place for skiing they get some Bookings popular. bring western popular. for western popular. popular. at the ski base westen tourits tourits here for tourits. and for free coming to free ride. ride touring. Too-Ashuu for It has almost spring sking. everything.

In Kyrgyzstan, a person can use taxi sharing services from TUK or other tour companies like TUK in Bishkek. All the roads going to the ski bases Transporation are not drivable without a good 4x4 jeep. The roads are quite dangerous and covered in ice all winter long.

54 ANNEX Review of ski bases and freeriding 1 destinations

RESORT SKI BASES RESORT SKI BASES

Vertical drop: 600 370 500 400 350 620 300 740 590 1500 597 Max altitude: 2.438

Vertical Ski lifts: 3 6 1 2 1 1 1 1 1 1 5 2 2 2,076923077 597 drop: Lift ticket (adults): 1100 1.200 1.000 1.000 500 500 500 500 1200 1000 800 845,4545455 Ski lifts: 2

Lift ticket (kids up is it still is it still Lift ticket 700 800 500 500 300 300 250 300 700 600 600 504,5454545 845 to 12): open? open? (adults):

In Kyrgyzstan, a person can use taxi sharing services from TUK or other In Kyrgyzstan, a person can use taxi sharing services from TUK or other tour companies like TUK in Bishkek. All the roads going to the ski bases tour companies like TUK in Bishkek. All the roads going to the ski bases Transporation are not drivable without a good 4x4 jeep. The roads are quite dangerous are not drivable without a good 4x4 jeep. The roads are quite dangerous and covered in ice all winter long. and covered in ice all winter long.

55 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

RESORT SKI BASES RESORT SKI BASES

ZIL’ Ski Resort Chunkurchak’ Toguz-Bulak’ Kashka-Suu’ Ak-Tash’ Ski ‘Oruu-Sai’ ‘Politeh’ Ski ‘Norus’ Ski SKI-Tatyr’ Ski Chon-Tash’ ‘Karakol’ Ski ‘Orlovka’ Ski ‘Too-Ashuu’ Ski Resort Ski Resort Ski Resort Resort Ski Resort Resort Resort Resort Ski Resort Resort Resort Ski Resort

Small hotel Small hotel / Small guest- Hotel Small guest- Small hotel Small guest- Small guest- Hotel, hostel, Small guest- Nice guestho- Accommodation guesthoues / house house house house b&b and house near by sue / hotel yurts guesthouse Small café / Nice café that is Small café / Small café Small café / Small café / Small café / Small café / 3 Or 4 cafes Small café / Nice café where women selling heated women selling women selling women selling women selling women selling that are really women selling you can get just Food & food in the park- food in the food in the food in the food in the food in the nice. The price food in the about anyting Beverage / Café ing lot on the parking lot on parking lot on parking lot on parking lot on parking lot on is very high for parking lot on for a high weekends. the weekends. the weekends. the weekends. the weekends. the weekends. kyrgyzstan but the weekends. price. its nice. This needs to Lots of things This needs to This needs to This needs to This needs to This needs to This needs to There is a lot This needs to The too ashuu be developed to do at the ski be developed be developed be developed be developed be developed be developed to do at the be developed pass is close Tourism Assets in further. base. It’s the further. further. further. further. further. further. karakol ski further. by. There is a Destination best ski base base. They have lot to do there near bishkek events and its but not much to well done. do after dark. This needs to They are offer- This needs to This needs to This needs to This needs to This needs to This needs to This needs to They are doing be developed ing good tour be developed be developed be developed be developed be developed be developed be developed a good servcie Tourism further. products durring further. further. further. further. further. further. further. in the area. Products the summer and winter.

56 RESORT SKI BASES RESORT SKI BASES

FREE RIDE POSSIBILITIES

‘Suusamyr’ Zhyrgalan’ Karakol Area CBT Chong-Kemin Average Freeride Freeride Arslanbob Logde Center

Distance from 158 462 404 580 112 343,2 Bishkek: Max altitude: 3.850 3.264 3.500 2.876 2600 3.218 Vertical drop: 800 900 1200 1000 975 2 snowcats, Ski lifts: 4 snowmo- 1 snowcat snowmobiles horses horses biles Lift ticket 4080 5245 4565 4630 (adults): Gear rental: 1360 Paragliding, Additional quad-riding, Sauna, horseback riding, national crafts workshops, fishing, and snowshoeing. services: tours

ANNEX 2 Ski destinations maps

The desk-research illustrated incomplete and weak service chains in the sense that several elements of the service chain for tourists are missing in the most relevant winter tourism destinations. The same can be said in regard to the variety of offers within the different types of services (e.g. gastronomy), which is enormously limited (reflected on the number of offers). The field visit confirmed this impression: only Karakol offers a broad range of different services: The following stakeholder-maps demonstrate clearly the incomplete service chains in a selection of destinations. This originates mainly from:

■■ The very young development of these tourism spots, but; ■■ Also by the not (yet) existing competition. Within the classical skiing destinations this is based on two reasons:

■■ The ski-base owners in most cases do not allow other businesses to build up other offers and;

■■ The demand so far was not that intensive, so that there would have been enough pressure from the market side.

The latter most probably will change Young Few destinations landowners in the next couple of years when the number of skiers will raise and their nearly no service expectations and needs also competition grow. One must expect some difficult growing demand developments in several ski-base ar- incomplete eas (e.g. Zil, Kashka-Suu and others), service chains higher where it will be necessary to find so- expectations lutions to intensify the service chains business (e.g. land needs, legal aspects, and development market new relations between service provid- pressure ers). service chain improvements

new offers / businesses

further possible land need con icts

59 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

Zil

oal Skiers opulation omesti nternational

ZIL S-B Accomodation Services

Sports Rental oal uniipality ki nstrutors

Chunkurchak

Skiers omesti nternational CHUNKURCHAK S-B Accomodation Services Sports Rental otels amps ki upara nstrutors

Orlovka

Skiers omesti nternational ORLOVKA S-B Accomodation Services

ports Rental

ki oal nstrutors ospital

60 Karakol

nestors omestia estination nternational Karakol kiers oaaal omesti opulation nternational

ports oal Rental uniipality KARAKOL S-B Accomodation Services

ki ational nstrutors oernment

ity o Karakol T

ccomodation Ton perators eries ter ndustries

Kashka-Suu

kiers omesti

ports Rental KASHKA-SUU Accomodation Services

ki nstrutors

61 Responsible Winter Tourism in Kyrgyzstan: Feasibility and market system analysis

Chong-Kemin (ski touring)

kiTouring omesti

CHONG-KEMIN

su uest T ouse

omodation uides

Jyrgalan (ski touring)

Free Riders / Ski-Touring Tourist omesti nternational

JYRGALAN

62 Arslanbob (ski touring)

kiTouring Tourist omesti nternational

ARSLANBOB

omodation uides

Suusamyr (ski base)

kiTouring Tourist omesti nternational

SUUSAMYR

Toosu kibase

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