Hoteliers highlight challenges in sector

Kathmandu, November 28

A delegation of hoteliers led by President of Hotel Association Nepal (HAN), Amarman Shakya, has submitted a memorandum on the challenges facing the country’s tourism sector to the Minister for Culture, Tourism and Civil Aviation Jeevan Bahadur Shahi today.

Issuing a press statement, HAN said hoteliers have sought government’s support by providing incentives to the hotel industry in line with those being provided to national priority industries as the hotel sector has been hit hard along with slowdown in tourist arrivals due to the devastating earthquake followed by the supply-line disruptions of last year.

HAN has requested the government to lower value added tax (VAT) from 13 per cent to six per cent in agriculture, forest and cottage industry products consumed by the hotels, according to the statement.

As the government has listed some agriculture commodities, including processed edible oil, cereals, flour, starch or milk, as non-VAT items, the hotel sector has also sought similar treatment in consumption of non-VAT items.

The statement further said that the delegation has also demanded subsidy in electricity tariffs. The Electricity Tariff Fixation Commission (ETFC) has differentiated the hotels and industries while fixing the tariff, according to the statement. “Though hotels are widely accepted as an industry, the ETFC has categorised hotels under trading sector.” Electricity tariff is comparatively higher for trading sector as compared to industry sector.

HAN delegation also presented the recent problem being faced by the hotel sector after the ban of INR 500 and INR 1,000 banknotes and requested the government through the tourism minister to settle the issue with government of India as early as possible. “There is substantive amount of high-denomination Indian banknotes with the hotels in the country as Indian tourists first spend their local currency they are carrying for services provided by hotels and restaurants,” read the statement.

The delegation has also stressed on the need to implement effective programmes through Nepal Tourism Board (NTB) to bring in more tourists as envisaged by Vision 2020. The vision document of the tourism ministry has envisaged to increase number of tourists to two million and create additional one million jobs in the tourism sector by 2020.