Tourism in the Past Two Decades

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Tourism in the Past Two Decades

Nepal saw a major boost in its tourism sector, successfully establishing itself as a haven for backpackers, adventure sports seekers, soul searchers, and free-spirited individuals.


The year 1998 is considered as the cornerstone of Nepal's tourism. This heralded the first-ever tourism promotional campaign, Visit Nepal 1998.. The tourism campaign launched under the leadership of respected hotelier Karna Sakya was to bring in 500,000 foreign tourists and make tourism a prime source of income generation for the country. The tourism campaign was an immense success as Nepal welcomed 463,684 foreign tourists during the year - a growth of 9.9%. The same year Nepal Tourism Board (NTB) was instituted to promote Nepal as an attractive tourist destination under the Public-Private Partnership(PPP) model inspired by Singapore Tourist Board. The establishment of Nepal Tourism Board was supported by UNDP under its pilot project- Partnership for Quality Tourism(PQT).

Tourist arrival reached its peak in the 1999  nearly touching half a million. However, the number started to decline from the very first month of the new millennium due to the Maoist insurgency. Incidents like the hijack of the Indian Airlines flight after its takeoff from Tribhuvan International Airport in December 24 1999, the Royal Massacre of 2001 hit the tourism industry hard. However, the historical Comprehensive Peace Accord signed between the major political parties and government in 2006 disseminated a positive message about Nepal in source markets resulting in growth in tourist footfalls in subsequent years. In 2006, Nepal Tourism Board launched its first ever brand under the slogan of "Naturally Nepal- Once is not enough." However, both private and government sector didn't take the ownership of the brand, and it fizzled out without making any impact.

Intending to take Nepali tourism to a new height, the government organised  various tourism promotional campaigns like Visit Pokhara Year, Visit Lumbini Year light of Festival, Destination Nepal . Bu the major one was the Nepal Tourism Year campaign. One of the objectives of the campaign was to bring in 1 million tourists. However, the campaign failed to meet its goal as only 736,215 foreign tourists visited the country during the year - a growth of 22.1%.  Major problems cited as a hinder to reach the target was unstable government and lack of airseat capacity to bring tourists in Nepal. The number continued to rise, registering a growth of 9.1% to 803,092 in 2012. However, it started declining soon after. The number plummeted by 32% to 538,970 in 2015 when an 8.1-magnitude earthquake jolted the country. However, the number started to grow and crossed the historic one million mark in 2018. In 2018, the contribution of travel and tourism to GDP was 7.9%. Recognizing the contribution of tourism to the overall economy, the government announced ‘Visit Nepal 2020’ campaign setting a target to welcome 2 million foreign tourists. Tourist arrivals peaked at 1.19 million a year later.

The outbreak of COVID-19, however, poured cold waters on Nepal’s hopes. The campaign got off to a bad start, forcing the government to call off the campaign altogether in March 2020.

By organising the campaign, Nepal was hoping to rebrand the existing touristic appeal previously directed mostly towards mountaineers and backpackers, and broaden the domains catering to all - adventure seekers, soul searchers, pilgrims, and luxury travelers. Nepal aimed at promoting and developing five areas - People and Culture, Nature and Wildlife, Heritages & Leisure, Religion & Pilgrimage, and lastly, Outdoors & Adventure. However, the year saw a massive fall (80.7%) as only 230,085 foreign tourists entered Nepal because of travel restrictions enforced to contain the spread of COVID-19. One year later, arrival numbers fell by 34.4% to 150,962 - the lowest since 1977. However, with the impact of COVID subsiding and most of the people vaccinated, the number is ticking upward this year. Nepal welcomed 42,006 foreign tourists in March alone. The country hosted 19,766 foreigners in February and 16,975 in January.

The average daily spending of tourists too fell to a seven-year low of USD 44 per day in 2019. Despite the rise in the number of tourists, the average length of stay was 12.7 days in 2019 - a marginal increase from 12.6 days in 2017. It almost increased by 19% in the year 2020 and reached 15.1 days. In 2020, Nepal generated USD 1,035 per tourist.

After the Maoist insurgency was over, the Nepali hotel industry gradually got back on its feet to witness a period of fast growth. With Nepal’s return to political stability, the sector was considered to be a lucrative one with new hotels and resorts opening across the country with big investments. The fact that the Department of Industry (DoI) registered more than 516 new hotel projects between 2014 and mid-January 2020 with investments totalling Rs 96.38 billion is a testimony to investors’ growing attraction towards the sector.

The number of tourist-standard hotels which was 1,125 in 2018 increased to 1,151 in 2019. Likewise, the number of star hotels went up to 138 in 2019 from 129 in 2018. Similarly, more than 3,000 beds were added in 2019. To cash in on the emerging opportunities, some big Nepali hotel brands as well as new players in the sector have been concentrating their efforts to establish new properties and expand the network of existing hotels to different parts of the country. The hotel sector has been one of the most preferred sectors for investment of late. In the fiscal year 2019-20 alone, 91 hotel projects were registered at the Department of Industry.

Back in 2004, there were 110-star hotels with 10,715 beds and 886 tourist standard hotels with 28,392 beds. The number of ‘star hotels’ grew slightly to 117, while 23 more tourist standard hotels were added by the end of 2013. The combined tally of both segments was 1,026 with an additional 150 homestays. The hotels recorded 9,506 beds in the star category and 25, 017 in the tourist standard category. The total count of beds was 34,523 excluding homestays. As per the record of 2017, the number of both star hotels and tourist standard hotels grew to 125 and 979, respectively. It grew to 142-star hotels and 1,171 tourist standard hotels in 2020. Likewise, the star and tourist standard hotels had a combined capacity of 45,850 beds.

In Nepal, star hotels, boutique hotels, and resorts are the main categories that accommodate high-end foreigners and domestic tourists. Besides such properties, tourist standard hotels, as well as homestays, offer their services to budget travellers. According to the Department of Tourism, there are 16 five-star hotels in Nepal. The Soaltee Kathmandu, Hyatt Regency Kathmandu, Radisson Kathmandu Hotel, Hotel Yak and Yeti, Hotel Shangri-La, The Malla Hotel, Pokhara Grande, Soaltee Westend Premier, Tiger Palace Resort, Hotel Central Plaza, Marriott Kathmandu, Aloft Kathmandu, Hotel Mechi Crown, Hotel Everest, Hyatt Place, and Pawan Palace are the five-star properties in Nepal. Meanwhile, Hotel Annapurna, a five-star property, shut down its operation last year citing the pandemic.

Hotel Dwarika, Gokarna Forest Resort and Park Village Resort are some of the premium hotels in Nepal.

Currently, Hotel Le Sherpa (Lazimpat), Hotel Krishna (Nepalgunj), Zinc Journey (Jhamsikhel), Holiday Inn Jhamel (Jhamsikhel), Landmark Business Hotel (Narayanghat), Lemon Tree Hotel (Tripureshwor), Sheraton Kathmandu Hotel (Kantipath), Luxury Villa (Budhanilkantha), Dwarika’s Inn (Jhapa), Hotel Grand Prince (Jhapa), Siddhartha International Hotel (Bhairahawa), Hotel Garima (Itahari), Hotel Centurion (Biratnagar), Soaltee Pokhara are under construction.

According to the Hotel Association Nepal (HAN), there were more than 100 new hotel projects in different phases of development in various parts of the country in December 2019.

If everything goes as planned, Gautam Buddha International Airport (GBIA) and Pokhara International Airport (PIA) - two national pride projects – would have started operation by now.

Travel entrepreneurs are eagerly awaiting the commencement of these two new projects, which could work as a catalyst in ramping up international tourist arrivals. Nepal, despite being a reservoir of natural beauty, has so far been able to attract only around a million or so foreign visitors a year. There are many reasons for the subpar performance of the tourism sector. One of them is the congested Tribhuvan International Airport in Kathmandu, which, so far, is the only international gateway for passengers and goods entering and exiting Nepal via air.

The two new airports under construction since 2015 have the potential to give a fillip to Nepal's tourist arrival numbers, as they are being built in strategic locations. The GBIA is located in Lumbini, the birthplace of Buddha, and will mainly serve Buddhist pilgrims from across Asia, whereas PIA is situated in the lake city of Pokhara and will cater to leisure segment tourists and adventure seekers headed to the world-renowned Annapurna Region.

Civil Aviation Authority of Nepal (CAAN), since its establishment on December 31, 1998, has been undertaking both responsibilities of a regulator and a facilitator. However, International Civil Aviation Organization (ICAO) and the European Union (EU) have suggested splitting the aviation authority into separate entities.

Likewise, the National Assembly, the upper house of the Federal Parliament has passed the Air Service Authority of Nepal (ASAN) Bill, 2076, and the CAAN Bill, 2076. The process to split the Civil Aviation Authority of Nepal (CAAN) into two separate autonomous entities, an aviation sector regulator and a service provider, is ongoing.

Currently, there are 54 airports in Nepal, out of which 35 are in operation. One domestic and three international airports are under construction. In 2011, TIA recorded 22,792 flight operations with 2.7 million passenger movements. The number grew to 27,208 flights and 3,511,647 passenger movements in 2014 and reached its highest at 33,897 flights and 4.38 million passenger movements in 2018.

Before the lockdown in 2020, Air Arabia, Air India, Biman Bangladesh Airlines, Buddha Air, Tashi Air (Bhutan Airlines), Air China, China Eastern Airlines, Sichuan Airlines, China Southern Airlines, Druk Air (Royal Bhutan Airlines), Etihad Airways, Fly Dubai, Cathay Pacific, Himalaya Airlines, Indigo Air, Jazeera Airways, Korean Air, Malaysian Airlines, Malindo Air, Nepal Airlines, Oman Air, Salam Air, Qatar Airways, Spice Jet, Shree Airlines, Singapore Airlines, Tibet Airlines, Thai Airways, Turkish Airlines, Thai Lion Air and Vistara Air used to operate international flights from and to Nepal. Many of them have already resumed the flights. Some will follow the suit soon.  

Similarly, Nepali airliners conducted 79,260 flights in 2011, boarding 1.59 million passengers. The number grew to 95,567 in 2018 where 2.84 domestic passengers enjoyed the flights. In 2020, the number of flights and passengers declined to 73,698 flights and 1.67 million passengers, respectively.

Nepal has signed Air Service Agreements (ASAs) with 40 countries, and there are 20 airlines companies for domestic passenger movement.

Altitude Air, Air Dynasty Heli Services Pvt, Buddha Air Pvt, Heli Everest Pvt, Kailash Helicopter, Manang Air, Mountain Helicopter, Prabhu Helicopter, Nepal Airlines, Madhya Airbase, Yeti Airlines, Guna Airlines, Saurya Airlines, Shree Helicopter Shree Airlines, SM - Simrik Air, Summit Helicopters, Sita Air, andTara Air are domestic fixed and rotary-wing operators.

Travel/Trekking/Rafting Agencies
According to the tourism ministry, there were 2,239 travel agencies, 1,598 trekking agencies, 52 rafting agencies, and 31 tourism transportation services in 2012. Though the details of licensed trekking and tour guides were unclear, the country had licensed 100 river guides. In 2018/19, the number increased to 3,743 travel agencies, 2,797 trekking agencies, 82 rafting agencies, and 84 transportation services. Likewise, the number of the trained workforce increased to 4,241 tour guides, 17,766 trekking guides, and 280 river guides.

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