Economic overview
Kazakhstan is among the world’s most promising “frontier” markets. The country’s economy is driven by vast natural resources, including fossil fuel, uranium, copper and zinc reserves. These natural riches, as well as a prime geographic (albeit landlocked) position between emerging-market powerhouses China and Russia, have attracted international investment. That, in turn, has boosted business travel to and from Kazakhstan.
In recent years, Kazakh leaders began a diversification program to reduce dependence on volatile “extractive” commodities. They have targeted pharmaceutical, telecommunication, petrochemical, food-processing and transport sectors as areas for growth. The country’s GDP increased 7% year-over-year in 2011 and the government estimates GDP results for 2012 will come in around 5.5%.
Business travel industry insight
The corporate travel business is beginning to consolidate. While many companies still use multiple agencies to get their bookings done or just jump from one agency to another in pursuit of the lowest price, the growing presence of multinational companies is driving consolidation and the adoption of global business travel standards.
Opportunities
- The country’s abundant natural resources (especially oil and gas) will attract international investors and multinational corporations for the foreseeable future.
- Companies operating in Kazakhstan are looking for more transparency and higher service levels in all business operations, including travel.
- Infrastructure and education are improving, and communication systems are well developed, especially in major cities.
- Oil profits are trickling down to an emerging middle class.
Challenges
- Online booking is not yet established in the market, and credit card payment is not standard.
- One airline dominates the market.
- Kazakhstan has no direct access to an ocean, which means transporting its natural resources requires cooperation with neighboring countries.
- Corruption is common.
When your business expands into new markets, BCD Travel can get your travelers where they need to be. Talk to your account manager about how we can support your company’s growth across the globe.