The hotel industry is also seeking relief from the government and Nepal Rastra Bank
KATHMANDU, SEPTEMBER 15
Nepal's tourism industry is facing another major setback after the recent Bhotekhoshi floods caused an estimated Rs 52 billion in losses and triggered a sharp drop in tourist bookings just as the country entered its peak autumn season.
The preliminary findings of the Bhotekoshi Glacial Flood Damage Assessment Committee, led by Nepal Tourism Board member Sahadev Dhamala, show extensive damage to tourism infrastructure and businesses in several districts.
The assessment estimates total losses of nearly Rs 52 billion across tourism products, services and physical structures. Damage to land, buildings and other core structures alone is estimated at around Rs 19 billion.
Hotels have suffered heavily.
Around 142 hotels were damaged or destroyed, including about 70 properties in Rasuwa, 40 in Nuwakot, nearly 20 in Dhading and 12 in Gorkha.
The impact, however, has spread beyond the areas directly hit by the floods.
The disaster struck at the beginning of Nepal's main autumn tourism season, which runs from September to December. Disrupted highways, safety concerns and international media reports resulted in widespread cancellations, affecting hotels even in destinations that were not directly damaged.
The assessment estimates that Kathmandu, Pokhara and the wider tourism sector could lose around Rs 12 billion in business and profits during the four-month recovery period following the disaster.
Dhamala said the timing of the disaster had compounded the difficulties faced by an industry that was already trying to recover from the effects of the Covid-19 pandemic and subsequent disruptions.
The hotel industry reported that average cancellations of domestic and international bookings-including room reservations, events and programmes-reached around 70 per cent following the floods.
Some hotels reported days with no room sales at all, while overall hotel occupancy remained below 30 per cent during the first month after the disaster.
"The impact is not limited to physical damage. The floods have also affected tourism businesses through cancellations and a sharp fall in tourist movement," Dhamala said.
The worst-affected districts were Rasuwa and Nuwakot, while Dhading, Gorkha and Chitwan also experienced significant disruptions to tourism and hospitality activities.
Hotels across the Kathmandu Valley and other parts of the country were indirectly affected by the decline in tourist arrivals. The industry has also faced additional difficulties from disruptions to LPG imports and supplies. Hotel Association Nepal (HAN) President Binayak Shah said the industry saw an immediate wave of cancellations after the floods.
"When international media reported on it, it gave the impression that the entirety of Nepal was unsafe," Shah said. He said the situation in major tourist destinations has now largely returned to normal, with airports, hotels and restaurants operating.
"Nepal is normal and open. Major tourist destinations like Kathmandu, Pokhara and Chitwan are running normally, airports are functioning smoothly and hotels are operating well," Shah said.
Cancellations have gradually declined following the easing of travel advisories by several foreign embassies and continued recovery efforts.
Shah said the industry needs to communicate the actual situation on the ground to international travellers.
"We need to communicate the exact, actual situation in Nepal. Life is returning to normal, and all services-airports, hotels and restaurants-remain fully intact," he said.
The assessment has put the wider loss to tourism at a time when hotels and other businesses are still carrying financial obligations accumulated during the pandemic.
The committee has recommended financial relief for affected businesses. Where borrowers or collateral have been completely destroyed, it has recommended loan waivers. For partially damaged businesses, it has called for tax relief, interest rescheduling and loan restructuring.
The hotel industry is also seeking a clear one-year relief framework from the government and Nepal Rastra Bank.
HAN has proposed that banks freeze or defer hotel interest payments for one year, from July 17, 2026 to July 16, 2027, along with principal moratoriums, loan rescheduling and extensions of loan tenors.
The industry says the measure would give viable hotels time to maintain operations, protect jobs and rebuild their businesses.
It would not amount to a loan waiver, according to the proposal. Deferred interest could instead be rescheduled towards the end of the loan period without penal interest.
Hotel operators say they continue to face expenses for staff, utilities, maintenance, suppliers and government obligations despite a sharp fall in revenue.
Shah said the government is already discussing relief measures for the hotel sector.
"We met with the Finance Minister to discuss the impact on the hotel sector. The government is working on relief packages, including loan restructuring and waiving penalty fees, similar to the measures implemented during the Covid-19 pandemic," he said.
The assessment also highlights the human cost of the disaster. Around 164 tourism workers, mainly guides and porters, are reported to have died or gone missing.
The committee has proposed rehabilitation packages for affected families, including guaranteed education support up to at least bachelor's level for the children of tourism workers who died in the disaster.
Dhamala said recovery measures need to address not only damaged infrastructure but also the businesses, workers and communities dependent on tourism.
The committee is completing verification of its preliminary findings before submitting the assessment and recommendations to the Ministry of Culture, Tourism and Civil Aviation and the Prime Minister's Office.
Shah said restoring international confidence in Nepal would be crucial to the sector's recovery.
"If tourists visit Nepal, it directly boosts our economy and helps us recover much faster," he said.
He also urged travellers who are planning trips to Nepal not to cancel their bookings.
"For those currently planning their trip, there is no need to cancel your bookings," Shah said.