Last year, Nepal's hotel industry was hit hard by a devastating earthquake, political problems and an economic blockade...but that was then. The hotel occupancy rate decreased 30 percent in 2015, but it increased 65 percent this year.
But while tourism and hotel professionals in Nepal cheered the improvements, they also called upon the government to improve infrastructure that can help the two industries continue to grow.
“Nepal received 8 million tourists in 2014, 5.38 million in 2015, and the estimated number for 2016 is around 6 million," Binayak Shah, general secretary of Hotel Association Nepal, told the Himalayan Times. Nepal currently has 36,000 beds in 22,000 rooms, and by 2020, an additional 4,000 starred rooms will be added. As such, Nepal will need its inbound tourism numbers to keep growing.
But recent hotel openings and last year's visitor downturn has caused hotel supply to grow and demand to drop. Hotels throughout the country, the paper claims, are already operating at a "survival rate," and cannot reduce prices any further to attract visitors. “All of us want improvement and development right now. Handling tourism correctly could be the best source for generating revenue and national income,” Shah said.
Occupancy Improvements
This year, Nepali hoteliers have managed to get their occupancy rates above last year's 40-percent level, with 60 percent being the average occupancy rate of most hotels. The occupancy is expected to rise further with the arrival of more tourists as Nepal still holds its charm for untainted natural beauty and as a value destination.
“Last year was a disaster with the blockade," Shagun Shakya, a member of the KGH Group of Hotels and Resorts, told the Himalayan Times about occupancy in Nepal's hotels. "But this year, the situation is as good as pre-earthquake times.” Occupancy rates at at KGH properties are ranging from 70 percent to 100 percent. "The private sector has invested a lot for the upliftment of tourism. It’s the government who has to build the infrastructure now.”
Infrastructure and Investment
According to Shah, Nepal's government has been "too slow in reforming economic and tourism agendas that include proper plans and policies for development of the tourism sector. The government is still not working in collaboration with the private sectors to uphold tourism.” The hotel industry is led by the private sector and the government is yet to take a proactive role in its development.
"Foreign investors looking to invest in Nepal know that the prospect is very good here," said Bijay Amatya, CEO of Kora Tours. "That’s why they want to invest in tourism. But to cater to the investors and tourists alike, we lack the infrastructure. We need to focus on improving our infrastructure, we need to have a very strong national carrier, and trained human capital to meet the demand of these tourists. These three things must be carried out simultaneously. We need to invest money on worldwide marketing with major focus on the consumers.” According to him, Nepal has a strong hold in adventure tourism, but the government should promote cultural tourism by restoring heritage sites. The only international airport in the country also needs to upgrading to handle the expected growth in tourism numbers.