One million tourists Can we meet the target?

The government has set the target of bringing in one million tourists by the year 2011. But for this, it is necessary to integrate all the forces and agencies involved in tourism to act in unison

in order to meet the target. From 526,705 arrivals in 2007, the target of one million tourists by 2011 means achieving an average growth of 17.4% per annum in the next four years. Looking at the growth of tourist arrivals during the past four years (11.7% per annum), the new target appears ambitious, but targets have to be ambitious.

Geographically a small country, Nepal has physical limitations to host large numbers of foreign

tourists especially in the Kathmandu Valley, the only aerial gateway so far. To avoid the grave environmental concerns in terms of noise, dust, air pollution and traffic congestion, foreign visitors increasingly avoid entering the city’s core areas and head directly from airport towards

nearby popular tourist destinations. The target of doubling tourist arrivals within four years will impinge heavily upon the carrying capacity of Kathmandu airport and on the accommodation and transport capacities of the valley. Fiscal incentives can help expand accommodation and ground transport infrastructure, but the capacity of the only international airport cannot be expanded so quickly. So, the opening of Bhairahawa and Pokhara airports for direct regional services from India and nearby countries must be considered a priority to cope up with the expected influx of tourists.

While implementing programmes to achieve the target, it is important to identify the kind of tourists and the source markets we target to promote in the coming years. More visitors from emerging Asian markets will demand tourism products different than those from traditional west European countries. So, market research can only guide product design parameters, so that investments in product development and promotional efforts are not wasted. More important than the number of tourist arrivals is the amount spent by them in the host economy. The 340,695 foreign visitors are reported to have spent US $230.6 million in 2007, thus averaging $535 per tourist. This is a substantial drop from $765 per tourist four years ago in 2003.

So, the country did not benefit economically from the rise in tourist head-count in the recent past. If our concern is to increase the economic benefits of tourism (for income and employment), then our focus should be on maximising the dollar income from tourism industry

than the head-count. The success of tourism industry in a landlocked country like Nepal clearly

depends a lot on the strength of the national airlines. The Nepal Airlines Corporation, the only national flag carrier, offers intermittent services to only five of the 35 countries with whom the government has signed air service agreements. The declining fleet of ageing jet and STOL airplanes the airline owns has become unreliable and insufficient to cope with the demand and to withstand competition with foreign airlines.

There has been no addition of aircraft in the NA for the past 20 years since 1988, save the intermittent lease during 1996 to 2001. The failure of several efforts by the airline’s management to buy or lease additional airplanes in the past seven years clearly indicates that buying an aircraft is obviously not an easy task in the context of the Nepal Airlines. The crux of the problem in NAC seemed to be the weak management which was not able to harness its potentials and the one more dented by political interference, than by the shortage of planes alone.

A panacea for all the problems of corporate management is prescribed as PPP (Public Private Partnership). In the context of buying two B757 airplanes in 1987, the Council of Ministers had decided on 21 August 1985 in favour of private participation in NAC ownership, and that its shares would be sold to the largest number of the general public with a provision for institutional investors (15%) and the employees of the airline (5%). The cabinet decision has not been implemented so far. A Privatisation Committee formed under the PM had listed Nepal Airlines Corporation in 2007 as one of the worst state-owned corporations in Nepal (Gorkhapatra, 18 Aug., 2007).

Selling shares of an airline suffering heavy losses and in negative net worth will not attract investors, nor can it fetch any attractive price. So, in order to rescue and re-strengthen the airline from the state of collapse, the airline probably needs a helping hand of a strong strategic partner for professional management on commercial lines. Successive governments have given false promises of buying additional aircraft for the NA, re-strengthen the airline to help achieve tourism targets of the nation etc. but governments changed faster than it takes to improve the airline. The least that can be said is “Action should speak louder than words”.

Shrestha is an aviation and tourism consultant.