As soon as Shesh Ghale, the president of
Non-Resident Nepalese Association and one of the richest non-resident Nepalis
in Australia, announced his plan to construct a new five-star hotel in
Kathmandu, the Pokhara-based Laxmi Group and the Hetauda-based Mukti Shree Pvt
Ltd followed in his footsteps.
With billions of dollars investment pouring
into the sector in the next couple of years, travel and tourism seems set to
resurrect to its former position as the largest foreign currency earner in the
country. However, travel and trade entrepreneurs have been waiting for the
government to walk the talk and start implement recommendations of a high level
committee led by chief secretary Lila Mani Poudyal.
After the committee’s recommendation a year
ago, the cabinet decided to accord the tourism sector a priority industry
status, but the decision has not yet been implemented ‘officially’. The high
level committee gave recommendations on a plethora of issues from short-term –
including tax break to incentives for vehicle imports, to long-term – including
easier access to land leases hotel construction and plans for the overall development
of the tourism industry.
Tourism provides around two percent of the
country’s employment and is the only industry that can have a spiral impact in
the economy from urban to rural levels, guaranteeing greater distribution of
the wealth.
From home stays that involve the rural
populace directly with tourists to trekking that has been providing direct and
indirect employment in various remote mountainous districts for decades, it is
an industry that helps create large-scale employment with very little investment.
Though the contribution of travel and tourism
to the economy is expected to grow to 8.1 percent (Rs. 182.1 billion) in 2020 –
according to the World Travel and Tourism Association – the exact contribution
of the industry has not yet been calculated, due to a lack of tourism satellite
accounting.
The Ministry of Tourism and Civil Aviation
(MoTCA) has started to collect the primary information that could in future
help prepare this accounting, which can reflect the real picture of the tourism
sector’s contribution to GDP.
Currently, the contribution stands at 2.5
percent, whereas it was 2.0 per cent in 2011-12 and 1.8 per cent in 2010-11,
according to the ministry. But in 2009-10, tourism contributed 2.4 per cent to
the economy. The industry’s contribution to GDP decreased in the last two
fiscal years due to political instability. Lack of stability, security and
certainty had an adverse impact, putting tourists off Nepal and on to other
destinations.
But with stability, the industry is
witnessing increased earnings. Nepal received Rs. 30.7 billion from the tourism
sector in the fiscal year 2011-12, against Rs. 24.61 billion in 2010-11.
According to the ministry, Rs. 36.6 billion was generated by the travel and
tourism sector in the fiscal year 2012-13.
However, the government’s delay in
implementation of the priority industry status has clipped the wings of the
industry. The government needs also to implement its policy of paid leave for
government employees to promote internal tourism, which has yet not been
implemented, apart from the appointment of a travel attaché and establish
travel information centres in Nepali diplomatic missions abroad. The missions
abroad have to be mobilised in an efficient manner to promote tourism, and the
development of new destinations and packages.
In the budget for the current fiscal year,
the government has promised to construct regional international airports in
Pokhara and Bhairahawa. The government should join hands with the private
sector in the public-private-partnership model for regional airport
construction.” suggests Federation of Nepalese Chamber of Commerce and Industry
president Suraj Vaidya.
Likewise, with more international airlines
flying to Nepal, the current infrastructure at Tribhuwan International Airport
is not enough to accommodate the rising number of tourists in recent years.
Likewise, the government initiative of
tourism promotion failed due to a lack of aircraft. The national flag carrier –
Nepal Airlines – has not been able to expand its fleet and fly on international
routes that would help promote Nepali tourism directly. The political bickering
in the Nepal Airlines Corporation has crippled the national flag carrier and
has resulted in its lack of flights to international routes.
The ailing airline has been forced to reduce
its international routes, including the most profitable New Delhi route, but a
recent agreement with a European aircraft manufacturer has ensured that Nepal
will get two Airbus aircraft in the next three years.
Apart from the infrastructure, development of
new packages and destinations is also key to attract tourists and lengthen
their stay. The tourism industry has failed to develop new tourist destination
packages as they have been selling only Pokhara, Lumbini and Chitwan for a long
time. Travel and tourism entrepreneurs should also be more innovative and
develop new tourist packages including the virgin West and Far West regions
that have huge potential for the trekking and adventure tourism.
According to the ministry, some 48 percent of
tourists visiting Nepal do so for travel and holidaymaking, around 14 percent
for trekking and mountaineering, and over 13 percent of the tourists visited
Nepal for pilgrimage last year.
But the failure of the government and tourism
entrepreneurs in catering to the needs of visitors made Nepal see no
improvement in its ranking in the Travel and Tourism Competitiveness Index
2013, published by World Economic Forum in 2011. Nepal was ranked at 112th,
with a 3.42 score among 140 countries in 2013. The average length of stay for
tourists has also slipped to 12.87 days in 2012, from 13.12 days in 2011, the
MoCAT data revealed.
Despite prolonged political transition,
tourists continue to flock to Nepal because of Mount Everest, Lumbini and its
warm and welcoming populace. But with increased investments from the private
sector and policy backed by the government, tourists will love Nepal all the
more.
The year 2014 will see more tourists flocking
to Nepal due to the successful second Constituent Assembly in November of last
year, which has given a new ray of hope that the country will soon become more
politically stable, which will help regain Nepal’s lost position in the global
travel and tourism map.
(Published in Business 360
magazine January 2014 issue)
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