Nepali multinational, CG Corp Global, has of late been expanding its investment in the hospitality sector in a big scale in the country. CG Hotels and Resorts — the hospitality arm of CG Corp Global — has been operating two hotels in Kathmandu and one in Chitwan. It has been preparing to launch hotel projects in Pokhara and Nawalparasi. CG Hotels and Resorts recently started operation of a luxury resort called Meghauli Serai in Chitwan under the brand of Taj Safaris. Pushpa Raj Acharya of The Himalayan Times caught up with Rahul Chaudhary, Managing Director, CG Hotels and Resorts, to talk on the prospects and challenges of Nepal’s tourism sector and CG’s new investment plans. Excerpts:

How would you like to analyse Nepal’s tourism market?

The country’s tourism sector was witnessing substantial growth after the end of the decade-long insurgency. But we witnessed a big hit in tourism after the devastating earthquakes of April and May, and the border blockade that crippled the country’s economy. These unfortunate incidents occurred at a time when we were expecting tourist arrivals to reach at least one million per annum from around 800,000. However, we are a resilient nation and I believe we will bounce back and the country will definitely do better in the coming years. New investments in the hotel and hospitality sector have been increasing. There will be around 4,000 rooms added within the next five years. As the tourism sector has been able to attract more investment, we can be pretty sure that there is a huge prospect in this sector.

What could the government and private sector do for the speedy recovery of the tourism sector to stimulate the country’s economic growth?

Tourism sector is gradually recovering after the devastating earthquakes and border blockade. We have all been putting in our best efforts to revive the tourism industry. But we also have to introduce new strategies for the betterment of the tourism sector in Nepal. In this regard, I want to raise a fundamental point about what kind of tourism we need to promote. We should be targeting a niche and high-paying traffic rather than the back-packer tourists. If we are able to attract high-paying traffic then the focus on the number of tourists that visit the country would be irrelevant. I think focus and impetus from both the government and private sector should be more on promoting high-end tourists in Nepal than just dwelling in the number of arrivals.

There are a number of global chains like Starwood, Marriott, Sheraton and Taj that have decided to do business in Nepal. Is it an indication that the country will be able to attract high-yield tourists in coming days?

We can say that tourism in Nepal has been moving in the right direction. The trend is improving and with the affiliation with international brands the kind of traffic coming to Nepal will also improve. As major international brands are coming to Nepal, the number of high-yield tourists will also go up. Since we are trying to focus on conservation and eco-friendly tourism we should not lay emphasis on the ‘number’ of tourists but on the ‘type’ of tourists.

As more global brands come to Nepal there will be even more competition in the hospitality business in coming years. How will they be able to sustain if the flow of tourists does not increase as envisioned?

It is obvious that competition in the hospitality sector will be tough in the next three to five years. As the new hotels start their operations, there will be fierce competition in terms of service to lure high-end tourists. For example, we established Meghauli Serai in Chitwan recently under the Taj Safari’s brand with an investment of Rs 700 million and we aim to break even within two years. So, a lot will depend on the quality of services that the hotels are able to provide.

We sorely lack tourism related infrastructure in the country. In this scenario, how will we be able to attract high-end tourists with the efforts of only the private sector?

The government is lagging behind in terms of infrastructure development. Private organisations have been doing their part to the best of their capacity regarding the investment and promotion of the tourism sector. The government also needs to play a similar role and collaborate with the private sector. The country’s infrastructure is in a bad state. We have been facing various hassles like lack of electricity and dearth of adequate road networks, among others. Due to lack of electricity, operating cost of businesses has been shooting up. Despite the unfavourable environment, there has been substantial investment in the tourism sector and we wish the government would facilitate the private sector with a proactive attitude in the coming days. Even from the point of view of systems and approvals, it takes so much time for the approvals. The private sector always has to push the government to get things done. Until and unless the government changes this attitude, we will not be able to create a favourable environment for investment in the country. While talking about the tourism sector I feel the country can offer so much more. However, if the government and private sector do not work together we will fail to harness the potential for development.

How can Nepal Tourism Board (NTB) play an efficient role in luring high-yield tourists?

At one point of time NTB had initiated Nepal Tourism Year, but that did not gain much traction at all. Tourism is something that needs to be continuously upgraded with the changing times, which we can learn from the experience of other countries like Malaysia, Kenya, Australia and India, among others. They have been marketing and promoting their tourism industry in an active manner. I think NTB should be more proactive and participate in international travel and tourism fairs and conferences. NTB needs to start programmes such as Visit Nepal Year as the tourism sector has been in the doldrums in recent years. We need to take initiatives to recapture what we have lost. The earthquakes last year were very unfortunate incidents but we have to use that situation to the country’s advantage. We need to reach out to the global market and ask international travellers to come to Nepal and experience our country and in the process to support us. I think NTB needs to rethink its strategy. Initiative can also be taken at the government to government level to bring tourists from different countries to promote tourism.

If the government does not focus on infrastructure development then do you think the private sector will be able to sustain?

I believe things are all interrelated and that if the government or the private sector fails to do their job accordingly, then it will affect the arrival of tourists. While the private sector is building the hotels and other facilities, the government also needs to establish well-facilitated infrastructure. Let’s take the country’s only international airport as an example. If there are more tourists arriving then it is natural for the government to think of expanding the airport. The facilities in the airport also need to be enhanced. If we look at the airport facilities then they are in dire state. There are just two conveyor belts in the airport, which are not in good condition, and we need to wait for hours to collect our baggage. The same case applies regarding the supply of electricity, expansion of domestic airports and road networks, and proper maintenance of trekking trails, among others. In this situation, the government needs to play an effective role to be able to provide the required infrastructure to promote tourism.

You have started this venture at a time when the flow of tourists is pretty low. How do you think will you be able to recover your investment within two years?

As we have partnered with Taj, I think we will be able to bring in more tourists by capitalising on its brand name and wide network. We are hoping the brand name will be supportive in bringing more tourists to the country. Taj will do the marketing and promotion of Meghauli Serai, which is the first resort of the Taj Safari brand outside India. Taj has recently promoted Meghauli Serai in Europe. We are the perfect substitute of wildlife camps in Nepal and offer luxury services to tourists. We just started our operation and the occupancy level at the resort is around 90 per cent, where as the average occupancy level of the hotels in Nepal is at around 50 per cent. So, I believe that we will be able to recover our investment within two years.

CG Corp Global has been expanding investment in the hospitality sector in the country. Can you briefly elaborate about new projects?

We have been prioritising Nepali market because we feel there is a huge potential for all segments. We are going to develop a four-star hotel in Jhamsikhel of Lalitpur, which will come into operation by June, 2017. We also plan to start a three-star hotel in Bharatpur of Chitwan. Similarly, we are going to develop the Summit Hotel in Lalitpur as a heritage hotel. In addition, the Ayurveda resort in Nawalparasi is in the phase of detailed design. Besides, we have already acquired land to develop a hotel in Pokhara. We are also in the process of purchasing land in Lumbini and Nepalgunj to build hotels there. Though we have over 100 hotels and resorts in various other countries, we are quite new in terms of hospitality business in Nepal.