Mongolia Bets on Tourism to Boost Economy
The Mongolian government is rolling the dice on tourism as a key driver for economic growth over the next few years. The push has shown early signs of success, with foreign arrivals up nearly 73% so far this year compared to 2021.
South Koreans are arriving in droves, lured by Mongolia’s remote landscapes for “digital detox” – appealing to those seeking to unplug from busy modern lives.
Declaring 2023-2025 as “Welcome to Mongolia,” Prime Minister Luvsannamsrain Oyun-Erdene aims to attract over one million tourists annually and diversify the economy beyond mining. Visa-free entry for up to 90 days was recently granted to visitors from 61 countries, including the U.S. and Western Europe.
However, attracting tourists requires careful consideration of various nuances beyond simply increasing visitor numbers.
Luxury tourism presents untapped potential. With sparse population and endless space, exclusive rehabilitation clinics could cater to ultra-wealthy clients desiring privacy. Swiss rehabs have valuable lessons to offer. MIAT's subsidized cheaper flights to remote destinations like mountainous Bayan-Ulgii, Lake Khuvsgul and Gobi desert could spur further action.
Spiritual retreats drawing on Buddhist and shamanic traditions are another niche market. Sustainable tourism initiatives may also attract eco-minded travelers. Bhutan's success in this niche drawing on traditions deserves attention as a potential model for replication.
Gambling could be a game-changer, with parliament considering legalizing casinos and betting to mimic Macao.
A casino bill is long overdue, which proposes one state-run casino near the new Ulaanbaatar airport, expecting $300 million investment and boosted tourism. But public skepticism and caution from politicians remain due to past corruption.
Chinese tourists will be key to hitting one million visitors, though visa rules for mainlanders remain strict. Tax rebates and incentives may entice Chinese luxury shoppers. Cooperation with South Korean companies is increasing – Korean Air marketed Mongolia as the perfect “digital detox” destination.
Infrastructure requires major upgrades and further liberalization to support tourism growth, from airports to roads.
The Oyun-Erdene government has laid down markers for reviving tourism in Mongolia. But regulatory clarity, infrastructure improvement and market conditions will determine if the gamble pays off.
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