Opportunities to develop domestic and pilgrimage tourism expanding in Uzbekistan

Tourism is one of the most important economic sectors today. In this regard, many countries worldwide are taking several measures to develop this sector further, create an appropriate infrastructure at world standards, and increase the flow of tourists.

In particular, according to the World Tourism Organization, the number of tourists travelling in 2018 amounted to 1.4 billion, an increase of 6 percent compared to 2017. In 2019, the number of tourists reached 1.5 billion. In 2019, tourism and travelling to world GDP were about 9,170 billion dollars in total contribution. The above figures are a clear example of people's growing interest and demand for travel from year to year. In addition to economic benefits, tourism also plays a vital role in broadening the population's worldview, sustainable economic development, and the development of close ties between representatives of different countries and regions of the world.

Uzbekistan also has excellent tourism potential. In 2016, Uzbekistan developed its tourism infrastructure through radical reforms in the tourism sector. The number of international tourists increased from 2 million in 2016 to 6.7 million in 2019. According to the World Tourism Organization, in 2019, Uzbekistan was among the top five countries with the best developing tourist destinations.

From 2016 to 2021, the number of local tourists reached 24 million, while the number of foreigners reached nearly 20 million. Due to the coronavirus pandemic, in 2020, Uzbekistan was visited by 1.5 million foreign tourists, and in 2021 – by 1.7 million.

Tourism development world practice shows that it is necessary to unite and strengthen the efforts of all participants in the public and private sectors to turn this industry into a high-income sector. At the same time, the role of government is to ensure the coordination and planning of development policies in the field of tourism in the international, governmental and private sectors.

On April 26, 2022, the President of Uzbekistan Shavkat Mirziyoyev held a video conference on measures to expand tourism services and infrastructure development where all relevant authorities to implement the reforms participated. Particular emphasis was placed on the development of the tourism industry, increasing the range of services in the field, creating new jobs, growing incomes, living standards and quality of life, and improving the investment attractiveness and image of the country.

It was noted at the meeting that the restrictions imposed during the coronavirus pandemic in the world are gradually easing, thus reviving the tourism industry. In particular, in the first quarter of 2022, 610,000 tourists visited Uzbekistan, twice as much as last year.

Tourism development projects are being implemented in every region of the country. The "Valley of Legends" complex in Namangan and the "Amirsoy" complex in Bostanlyk are good examples. The thousands of foreign and local tourists visiting these complexes every day are commendable.

During the meeting, the President also proposed to build "Caravanserais" along the "Uzbekistan Tourism Highway" along 31 district and city roads, which will provide services such as parking, camping, car service, catering, and refuelling. Implementing these proposals should create new jobs, employment and welfare, a significant increase in the tourism industry's share in the country's economy, and an increase in the flow of tourists.

The private sector also plays a role in the rapid development of domestic tourism. Many entrepreneurs and artisans are currently involved in the tourism industry, producing souvenirs, hotel business, and tourist services. In this regard, it is noteworthy that the state provides loans, subsidies, credits and various other benefits to entrepreneurs.

Accordingly, Uzbekistan's President identified several further opportunities for the development of domestic tourism and the creation of more favourable conditions for entrepreneurs at that meeting.

In particular, from July 1, entrepreneurs who have established guest houses, restaurants and shops, and entertainment venues in tourist villages will pay turnover tax and social tax at the rate of 1 percent for three years, property, land and water taxes at only 1 percent. Within the framework of family business programs, loans of up to 50 million soums to establish guest houses in such villages, up to 300 million soums for the construction of grass and eco-houses, and up to 300 million soums for the construction of tent camps will be provided. Every year, 200 young people from tourism villages will be trained in Tourism Colleges free of charge at the expense of the state budget.

As such, the state is setting a goal to expand further the private sector's participation in the rapid development of the tourism industry, provide them with benefits, train and improve their skills in the field, and increase the range of new tourism products.

To develop the tourism sector further, we need to improve the necessary infrastructure. The first is transportation, and the second is logistics. Today, the government pays special attention to reducing transportation costs, establishing effective operation of low-cost airlines on international and domestic routes to meet the demand of tourists for air travel, and improving the mechanisms for purchasing tickets for modern high-speed trains. In this regard, at the meeting, the President gave some instructions to the Ministry of Transport to improve the transport infrastructure in tourism.

In particular, from July 1, there will be introduced up to 50 percent discounts on services provided to foreign airlines under the "Pilgrimage Tourism" program. Until October 1, a new company, "Silk Avia", will be established for domestic flights. Nine aircraft will be converted to an entire economy class to reduce costs.

All of this aims to increase the effectiveness of reforms in tourism in Uzbekistan, create favourable economic conditions and factors, increase its role and share in the economy, improve the quality of services, and improve tourism infrastructure.

The author is Eldor Tulyakov, executive director of the Development Strategy Centre in Uzbekistan.