The government and private sector have been doing their best for the revival of the flagging tourism sector that was hit hard by the devastating earthquakes and tensions at the border points last year. Tourist flow in 2015 declined by 33 per cent and income from tourism sector slumped by around 22 per cent as compared to previous year. As compared to annual inflow of 538,970 tourists in 2015, the country has witnessed inflow of 313,512 tourists in the first six months of 2016. The tourism fraternity has expected the tourist flow to rise during peak season from September to mid-November, but hotel entrepreneurs have said that average occupancy rate of hotels in peak season is just around 65 per cent. Pushpa Raj Acharya and Sujan Dhungana of The Himalayan Times caught up with Shankar Prasad Adhikari, Secretary of the Ministry of Culture, Tourism and Civil Aviation and Amar Man Shakya, President of Hotel Association Nepal, to know more on why the recovery in the tourism sector has been slow and what needs to be further done to harness the potential of this sector. Excerpts:
‘Nepal has enough opportunities to tap tourists who visit other South Asian nations’
— Shankar Prasad Adhikari
Tourist arrivals have not been encouraging this year despite various efforts made for the revival of this sector. Where are we lagging behind and what has government been doing to increase number of arrivals?
We all know that earthquake and supply line disruptions last year hit the tourism sector badly and we are still feeling the effects of those major shocks. Arrival of tourists in the first six months of 2016 increased by 15 per cent as compared to the corresponding period of last year. We have to take this on a positive note because this shows the tourism sector is gradually recovering. There have been various efforts made by the government and private sector for the revival of tourism sector. Though Nepal is one of the top tourist destinations in global rankings released by various agencies, the country has been attracting only 5.7 per cent of the total tourists who visit South Asia and the country shares only 1.7 per cent of the total income that South Asia earns from tourism every year. This means the country has enough opportunity to tap tourists who visit South Asia. To explore the potential and spread the message of revitalisation of the country’s tourism sector, we are going to organise ‘Visit Nepal 2018’. But the fact is that Nepal is in the least priority of tourists in South Asia due to the expensive air fare in Kathmandu sector. We also have to strengthen tourism marketing in various source countries from where tourists come to Nepal.
Have you seen any weakness in the private sector that has been affecting flow of tourists to Nepal?
Private sector is doing a wonderful job to bring more tourists to Nepal and tourist flow in the country is gradually rising. We have various constraints as I mentioned earlier, like expensive air fare, lack of tourism destinations and services to expand stay of tourists and their expenses. Private sector always seeks returns while making investments. And there is very good expansion of the private sector businesses associated with tourism like hotel, trekking, aviation and others in the country. I am quite impressed with the expansion of the hotel sector. More international hotel chains are coming to Nepal and quality of services has also improved in recent years. Previously, there used to be numerous complaints regarding quality of food and beverages. Hospitality business is a very tough business and that’s why entrepreneurs must always be conscious about quality of services they offer to foreign travellers in the country. High quality service is essential to bring high-end tourists and that is where we need to focus. Many countries in the world are focusing on high-yield tourists rather than back-packers also from the perspective of conservation of tourist destinations.
While talking about attracting high-end tourists, Nepal’s wildlife tourism is one of the areas for this. But the government has been barring tourism entrepreneurs from operating hotels and resorts inside national parks and wildlife reserves?
This issue has not been settled due to conflicting interests of two ministries — Ministry of Forest and Soil Conservation and the Tourism Ministry. Ministry of Forest and Soil Conservation talks only from the perspective of conservation and we argue that we need to take optimum advantage of the resources along with conservation. We developed tourism concessional manual when I was secretary at the Ministry of Forest and Soil Conservation. We have commissioned studies of the potential tourism activities in each national park and wildlife reserve and developed manual to award contracts to the interested parties to conduct various tourism activities in the protected areas along with conservation. But the Ministry of Forest and Soil Conservation has not made any decision on it. I think when a decision remains pending due to conflicting interests of various agencies then national priority needs to prevail there.
Tourism Vision 2020 has envisioned to bring two million tourists by 2020. Do you think the country will be able to achieve this target?
Tourism industry of Nepal has been facing challenges time and again due to national and international circumstances. It was badly affected by the decade-long insurgency that ended in 2005 but then after the global financial crisis started from 2008, which affected the number of outbound travellers for another two to three years. To make matters worse, the country’s tourism industry was again rocked by the earthquake and border tensions last year. Against this backdrop, the government is going to organise ‘Visit Nepal’ campaign in 2018 to promote Nepal as an attractive tourism destination in the world. The target set by Tourism Vision 2020 seems somewhat ambitious but it is not impossible. Before the earthquake, around 800,000 tourists used to visit Nepal every year. I think it is possible to increase the number by two-fold within 2020 but we need to invest in tourism related infrastructure and develop more tourism destinations in country.
‘We couldn’t promote country’s tourism after earthquake’
— Amar Shakya
Tourism in Nepal including hospitality industry took a nosedive due to the earthquake last year followed by the blockade in the southern border points. Is the sector recovering well?
Tourism and hospitality were among the major sectors that were hit hard by the earthquake and the border blockade last year. Even data shows number of tourists fell by almost 50 per cent in 2015 compared to the tourist arrival figure of 2014. As of today, the sector is reviving. However, the revival process is very slow. The reason behind this tepid revival process is our inability to promote Nepali tourism after the quake. We should have promoted Nepal as a tourist destination after the earthquake. But due to our failure to organise ample branding activities timely, the tourism industry is still struggling to fulfil the gaps created by the earthquake and the border blockade last year. The government, especially Nepal Tourism Board (NTB), should have come up with tourism revival plans and programmes. However, efforts made by NTB are not quite satisfactory.
Despite your pessimistic note, a number of international hotel chains like Marriot and Sheraton have made investments in the country. Doesn’t this show country’s tourism sector is reviving?
Big investors and international hotel chains coming to Nepal and making investments is a thing to cheer about. However, we all should understand that increasing number of hotels makes less sense to tourism industry if we are unable to increase flow of tourists for whom these hotels are targeted. We should be able to increase occupancy rate among hotels accordingly along with increasing number of hotels. As of 2015, there are more than 917 hotels across the country with total bed capacity and room capacity of 35,920 and 22,860, respectively. This shows that hotels in Nepal have quite good capacity to accommodate a huge number of tourists. But to the contrary, the flow of tourists in the country is low. This shows that the supply-demand chain in Nepal’s tourism sector is not functioning well.
Around 4,000 star rooms will be added by different new hotels within 2020. Will the current flow of tourists be able to meet occupancy rates of these additional rooms?
No, this is not possible. We received five lakh tourists in 2015 and the number is expected to reach six million this year. However, such tepid flow does not ensure full occupancy of existing hotels and new hotels in Nepal in future. If all of these rooms are to be occupied, we need two million tourists to visit the country by 2020 and all of us should start doing homework to make this happen. The current ways in which the government is promoting tourism sector is not good enough for the hospitality sector of the country. If the government is not serious enough in promoting tourism sector then the new investments made in hotels could go in a loss.
What is the occupancy rate in the hotel sector at present?
The occupancy rate is gradually increasing compared to the previous year. As of today this year, the occupancy rate among the country’s hotels is around 65 per cent compared to an average occupancy rate of 35 per cent in 2015.
What do you feel should the government do to promote Nepal’s tourism sector?
The first and foremost thing is again promotion and branding. We lack enough branding about our country, tourist destinations, cultural heritage sites, among others in the international market. The responsibility to promote country’s tourism sector lies with the government. International associations and tourists have more trust on the government than private sector. However, private sector is always ready to work together with the government to promote country’s tourism. As the flow of tourists from China and India is high in Nepal as compared to other nations, we can increase promotional campaigns in these two countries and other South Asian nations. Tourism promotional campaigns should also be done in other continents. The Indian government has been giving leave travel allowance to government employees every year to encourage Indian people to visit tourist destinations across the world. But India has not placed Nepal under potential tourism country to visit. The government should enlist Nepal under potential tourism country through bilateral efforts.
How do you analyse the status of tourism infrastructure in Nepal?
The tourism infrastructure in Nepal is a major setback to tourism growth. The condition of the only international airport — Tribhuvan International Airport (TIA) — is bleak in terms of both service and facilities for visiting tourists. Services and facilities inside TIA should be of international standard. Similarly, tourism sector of any country heavily depends on the strength of the national flag carrier of that country. Nepal Airlines Corporation (NAC) is currently weak and flies to very few destinations. We don’t have direct flights to Kathmandu from a majority of countries across the world. This directly affects the flow of tourists to Nepal. People do not like hassles while travelling, and thus, they do not prefer to visit countries if they don’t have direct flights to the destination. HAN believes that NAC should at least add two narrow-body and two wide-body aircraft to its fleet and increase direct flights to and from different nations across the world.
What is HAN doing to promote country’s tourism sector?
As the government has not been helping promote the country’s tourism sector properly, HAN is planning to promote Nepal’s tourism working together with all tourism related associations and institutions working in Nepal. With a collective effort, we are planning to introduce different campaigns in neighbouring countries soon.