Lalitpur, March 20
The Hotel Association Nepal (HAN) has expressed serious concerns over the disregard shown by the government towards the hotel industry in terms of prioritising the sector and introducing supportive rules and policies over the course of three years since the spread of the COVID-19 pandemic which led to a complete halt in tourism-related operations.
Stating that the continuous efforts made by the government to solve the problems seen in the financial institutions have not yielded any desired results despite repeated meetings, the association has demanded that the government recognise tourism as a priority industry, lower interest rates to single-digit, extend the loan repayment deadline and provide the facility of rescheduling and refinancing to hoteliers.
Speaking at a press conference held here today, Shreejana Rana, president of HAN, alleged that the government has shown complete disregard for the sector which was reduced to zero activity following the travel restrictions imposed to prevent the spread of COVID-19 infection, and added that the sector cannot progress unless good governance and structure are established in the ministries.
"The lack of tourist following the COVID-19 pandemic has led hotel operators across the country to a point where they are not even able to cover their operating expenses. Also, the complete disregard of the government bodies towards the hotel industry in terms of introducing supportive rules and policies over the course of three years has left hoteliers with no option but to shut businesses if the situation continues," she said.
Stating that the tourism sector has recovered by just 23 per cent in the South Asia Pacific region compared to 80 per cent in the Middle East, 75 per cent in Europe, and 65 per cent in America and Africa, respectively, as per the data presented by the UN World Tourism Organisation (UNWTO), Rana suggested that the government look at the data before making any decisions.
"While the arrival of tourists in 2022 indicates a tourism recovery by 50 per cent, the government should also keep in mind the ratio of demand and supply to assume that the country's tourism has recovered to normal levels. Having a significant contribution to the country's GDP and in employment generation, the government should recognise tourism as a priority industry and provide the facility of rescheduling and refinancing of loans," she said, adding that government should also focus on creating a suitable environment for running business operations as well as towards attracting more tourists into the country with the help of public-private cooperation.
Similarly, Binayak Shah, first vice-president of HAN, explained that the hotels in the country can sustain if their occupancy remains over 35 per cent.
However, apart from a few big hotels, the rest are running at 25 per cent occupancy which has made it difficult for them to even cover their operating expenses.
Stating that the hoteliers want to repay their loans, he requested the authorities concerned to provide some time until the situation of the sector improves. "Almost 20 per cent of the hotels are on brink of closure while many are incurring daily losses. The increase in interest rate has added further woes to the already affected sector. We demand the government to provide relief to tourism stakeholders by reducing interest rates to single digits and extending the time of loan repayment until the situation improves," he said.
Shah also said that the hotels will not be able to repay their loans before 2025 with development of airports, highways, tourism-related infrastructure progressing at a slow pace and added that the hotel industry will gradually collapse if the central bank and domestic banks do not take any initiatives to resolve the situation.
A version of this article appears in the print on March 21, 2023, of The Himalayan Times.
