How busy have Mongolia’s tour operators been this year? Well, that depends who you ask. Some agencies say they have never been busier, while others are calling it one of the slowest years in recent memory.
What everyone seems to agree on, however, is that cost increases on everything from bread to fuel have decreased profits, and many tour providers say Mongolia’s tourism industry needs help from the government. Take for example Tseren Tours, which has operated in Ulaanbaatar since 1994. The company’s director, E. Tserendolgor, who manages the agency with her husband Rik Idema, said that good European contacts boosted the number of people making reservations with her company; but she said, “if you look at just people walking in the office, we’ve seen much less than years before.”
According to Tserendolgor, difficulties in obtaining visas to Mongolia from China and Russia, fears about political unrest in Ulaanbaatar, and rising costs of travel deterred some casual tourists from venturing to Mongolia. However, for Tseren Tours and companies like it, the increase in operating costs, linked to rising prices, is the real threat to business. This year, Tserendolgor said, “I’m sure for all companies profits will be low”. The Marketing and Sales Director of Nomads tour company, A. Ariunaa, agreed. “It has been a problem. All our prices have been published since November 2007, and since then prices have increased 30 to 40 percent and are still increasing now,” she said. “We have to keep relations good, so we can’t go back to our clients with price increases”. Companies, like Tseren Tours and Nomads, that provide their clients with meals and transportation, specifically cite grain and petrol prices nearly doubling since January of 2008 as profit killers.
While both Tserenendolgor and Ariunaa say they have maintained a steady flow of customers, other tour providers have seen fewer clients drop. Borijin Travel director Dulmaa Enkhchuluun said that flight prices have discouraged the American and Canadian clientele he caters to from traveling to Mongolia.Likewise, Bolor, a manager at Nassan’s Guesthouse, which also offers tours, said that while room occupancy remains high, fewer people are taking tours. It was not such a good year,” she said. “Three to four years ago we had it much better.” What, if anything, can be done to change the fortunes of Mongolia’s tour operators? No one has a simple answer, but many companies
want the government to aide Mongolia’s over 200 tour providers. Just how should the government help? Again, that depends who you ask. Some, like Tserendolgor think the government needs to advertise Mongolia aboard. “The State is not doing anything to promote tourism,” she said. “They believe that people will just come because Mongolia is a beautiful country, but many people don’t know Mongolia.”
Right now, she adds, Tseren and the few other companies that attend international tourism expositions do the publicity legwork for an entire country, at great personal expense. Others like D. Gereltov, director of operations for Nomadic Expeditions, disagree. “I don’t think the government has a major role to play in promotion
,” he said. “I think companies do a much better job.” Instead, Gereltov believes the government should streamline infrastructure by improving roads and by making transportation schedules for trains and airplanes available to tour operators earlier. If the government did that, he said, “lots of companies would have a boost in sales.” While Enkhchuluun of Borijin Travel believes the government can do more on both fronts, he thinks its real obligation lies in the protection of Mongolia’s wilderness, much of which has been set aside for mining and mineral exploration and ultimately degradation. Without the outdoor experience to offer, he says, Mongolian tour providers could very well find themselves looking for new jobs.
The Ministry of Road, Transportation and Tourism (which could not be reached by press time) states in its website that lately the number of tourists visiting Mongolia has increased by 15-20 percent each year—reaching 451,598 in 2007. What the ministry’s statistics will reveal for 2008 remains to be seen, as does what action, if any, the government will take to assist an industry that accounts for 10 percent of Mongolia’s GDP. Mongolian tour providers face tough external and internal competition for tourist dollars, and if prices keep rising, these companies may find it difficult to make any profit at all.
Despite differences in business volume and varying opinions about how best to address the industry’s current woes, many providers suggested that Mongolia’s tour agencies should work together to create a comprehensive strategy. Already, they seem to have common ground on one point: whether or not the government takes action, Mongolian tour companies will have to adjust to changing and more difficult circumstances if they hope to stay in business.
Mongolia Tourism in 2008