Kathmandu, December 11
The Pacific Asia Travel Association (PATA) has painted a bleak outlook of Nepal’s tourism sector, warning of a high probability that many tourism-related small and medium enterprises (SMEs) will go out of business and the tourism industry will face a significant loss of human capital.
In a report titled ‘COVID-19 and The Tourism Sector: A comparison of policy responses in Asia Pacific’, PATA has said that despite the re-opening of domestic tourism, it is unlikely that the tourism sector will stay afloat until international visitors return.
But this could take time as ‘the demand for international tourism in Nepal has dried up due to a rising number of community transmissions of COVID-19 in the country’.
Like in other parts of the world, Nepal’s tourism industry was among the first to bear the shock of the pandemic.
In 2019, the country had 1.2 million international arrivals, leading to tourism revenues of $2.2 billion, which was 7.9 per cent of its gross domestic product, and provided over a million jobs for local workers — 6.7 per cent of total employment. This year, Nepal’s
tourism-related revenue is expected to be 80 per cent lower than its 2019 levels.
“The country’s tourism operators are either paying staff a substantially reduced salary or have put them on leave without pay. Airlines, hotels and big operators are now going into debt, while domestic SMEs are gradually going out of business,” says the report.
Nepal has allocated roughly four per cent of its GDP to respond to the pandemic. The fiscal and monetary measures focus primarily on tax incentives and concessional loans, according to the report, ‘but do not provide any immediate monetary relief to the majority of tourism companies struggling to operate during the pandemic’.
Meanwhile, the continuing national lockdown has hampered the government’s implementation of its work pay programme for low-wage workers. Since there has also been a substantial delay in delivering the monetary benefits of the stimulus package to the country’s tourism operators, the Tourism Recovery Task Force (TRTF-Nepal) is working with tourism investors to help tourism SMEs secure the capital to pay their expenses and wages for their staff.
On a positive note, Nepal has taken deliberate steps, such as establishing hygiene protocols, setting up the Tourism Recovery Task Force, and launching a domestic tourism campaign to prepare for the reopening of the tourism sector. The country also upgraded and enhanced tourism products such as heritage sites and trekking trails during the lockdown. “However, these steps
will not provide immediate relief for a large number of the tourism industry’s businesses,” the PATA report states.
While TRTF-Nepal has been set up in a public-private partnership for tourism recovery and is composed of industry leaders and members of leading global tourism organisations, tourism associations and Nepal Tourism Board, ‘the initiative has struggled with funding shortages and is currently working with the private sector to retool its strategy’.
Though the government has announced its intent to develop its nature-based tourism market, green or sustainable strategies are not laid out in its current recovery plan, the report has said. “The government did not recruit the country’s tourism workers to
help develop nature-based tourism products within the first six months of the pandemic, and now much of the talent in this workforce has migrated to other sectors in search of employment.”