With the arrival of over 500,000 tourists this year, stakeholders are hopeful of more visitors in the tourist season of 2023. Despite gradual recovery in terms of trekking and mountaineering among other outdoor activities, the hotel industry has witnessed little to no improvement so far, as per stakeholders. Sangay Sherpa of The Himalayan Times met with Shreejana Rana, president of the Hotel Association Nepal, to gain insights into the challenges faced by the hotel industry and the steps needed to make Nepal an exclusive tourist destination. Excerpts:
Please share your views on the situation of the hotel industry at present compared to previous years.
Following the 2015 earthquake, the tourism sector was able to bounce back within a year's time. The year 2019 was the peak year for tourism with the arrival of 1.2 million tourists. Although the number was expected to rise with the launch of Visit Nepal Year 2020, the spread of COVID-19 halted all tourism activities in March followed by a drought year in 2021 for the tourism industry. As a result, 94 per cent of hotels were forced to shut operations temporarily, while 70 per cent of the businesses closed down.
Similarly, 87 per cent of businesses went into debt, 65 per cent of hospitality workers lost their jobs, 92 per cent became psychologically affected, 77 per cent had to close temporarily, while 80 per cent faced issues in recovering their operational costs, affecting revenue and making it hard to sustain.
At the time, the central bank understood the situation and helped handle the situation by rescheduling and restructuring interest rates, which prevented the hotel industry from collapsing.
At present, hotels across the country are facing a grave challenge in sustaining themselves or even raising their operational costs. Hotels and resorts are being put up for sale as many hotel owners are in no position to even repay their quarterly loan interest.
How is the present economic pressure affecting the recovery process for hotels across the country?
COVID-19 followed by the ongoing war in Ukraine and rising inflation has adversely affected the whole world in one way or another. Although the number of arrivals has recovered by 50 per cent compared to 2019, hotels are running at less than 30 per cent of their maximum occupancy. The number of tourists from Europe has decreased considerably compared to 2019 alongside the arrival of business tourists. Despite some improvement in the trekking sector, things are not looking bright for the hotels. Many hotels are on the brink of shutting down or being put for sale due to lack of business. We can only hope for some assistance from the government at this point.
However, the central bank assumes that the hotel industry is doing very well at present, which is not true. The central bank should realise the precariousness of our position and assist businesses by extending the loan repayment period, and restructuring and rescheduling loans for hotels. Despite our repeated appeals to authorities, they assume that everything is fine. We are very grateful for the central bank's immediate actions to assist businesses back in 2020 and 2021 and we hope that they understand our existing problems as well.
What are the major factors hindering Nepal as a top destination among other countries?
Listed as the top fifth destination to visit in the Lonely Planet and 19th on TripAdvisor in 2022, Nepal has held a spot in the bucket list of many adrenaline seekers, food enthusiasts, and culture admirers due to the country's profound diversity in terms of its people and geography.
Nepal is truly a blessed country with many natural beauties. However, the expensive airfares, ineffective promotional activities, non-standardised hospitality services, lack of a one-door policy for tourism activities, poor physical infrastructure, failure in identifying our own products, and absence of a proper master plan for tourism promotion have hindered Nepal from being an exclusive destination among foreign tourists.
While the government is busy with its agendas, the private sector is also focused on its business. Despite knowing what steps to take, we have not been able to come together collectively to make a tourism master plan and implement it. We are consistently failing to promote our products in areas that have the spending capacity and to audiences who favour them over other products at the same time stalling our tourism prospects.
What do you think could be the solution?
In the past two years, despite attending hundreds of meetings, the government and private sector have not been able to come together to professionally outline our future plans to sell Nepal as an exclusive destination instead of a cheap one. Looking at the outcome yielded so far, I think we are going wrong somewhere.
Similarly, the government needs to implement its promises to provide paid travel leave for government employees to assist the sector.
Also, despite a lot of workshops and training programmes conducted by authorities in the country, an evaluation report of such programmes has not been done. There is no report to see if such workshops have even actually benefited the trainees who participated in such programmes.
In order to fix the problem, we have to outsource the solutions from outside Nepal. The tourism sector is in a dire need of a facilitator to formulate and implement concrete plans to unravel the country's tourism possibilities. We need to bring an international expert and help us put Nepal back on the map through the proper promotion of tourist attractions in all seven provinces.
We will need an autonomous tourism authority that can bring in experts to formulate a master plan and implement it. The government needs to prioritise the tourism sector as it contributes to the national GDP, while also providing employment to many. It is time to restart, rethink and revive the sector with the assistance of international professionals.
At the same time, the authorities should focus on containing COVID-19, as risks of new variants have been emerging in our neighbouring countries. Failing to do so might overthrow the little improvement that has been achieved so far.
A version of this article appears in the print on December 26, 2022, of The Himalayan Times.
