What brings Ascott to Kazakhstan?

What brings Ascott to Kazakhstan?

To tap into Central Asia’s growing demand, the Ascott Group acquired a ten-year contract to manage two serviced residences in Kazakhstan.

Although geographically in Central Asia, the oil rich Kazakhstan has strong affiliation and proximity to Europe and falls under Ascott’s Europe strategy. According to the group, strong travel culture among Europeans will boost their operations in Europe.

With less than 2,000 international hotel rooms in the entire country, the serviced residences operator will be the first international player to invest, and will manage some 320 units targeted to open by mid 2009.

200 of the 320 units will be in the capital city of Astana, near an integrated centre developed by Tsesna Corp, Ascott’s partner. An additional 120 units will be in the port city of Aktau, near the Caspian Sea. They will be named Ascott Astana and Citadines Aktau, respectively.

The Ascott Group’s CEO for Europe Gerald Lee explored future plans too claiming, "Going forward, we'd be looking at cities like Almaty and Atyrau. We are planning to add two projects a year, at least over the next few years. "On average, each of these properties should be around 100 to 150 units. Once we are more familiar with the market, we'd consider taking an equity stake in some of these projects as well."

Although Ascott attributes the decision to strong travel culture in Europe, historically Kazakhstan has not been a popular tourist destination. However the country’s strong oil and gas industry is expected to dramatically increase business tourism. Is Ascott’s decision to enter Kazakhstan premature?