Bringing Thamel Back from the Brink

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Bringing Thamel Back from the Brink

Rescuing businesses in Thamel and bringing the tourism hotspot back to life is integral to reviving the tourism sector of the country.  

--BY TAMISH GIRI

On a regular Friday, Kathmandu Burger, situated in a prime spot in Thamel, would be packed with customers. The burger house that started its operation four years ago would make average transactions of Rs 50,000-80,000 on weekends. Sales have now declined tremendously, and the burger shop is currently struggling to generate Rs 4,000 a day. Similarly, Student Tea House situated in the proximity of the burger shop used to make daily sales worth Rs 100,000 during the peak tourism season. The tea shop is now struggling to sustain its operation and has only made sales of Rs 12,000 after resuming its service since June 9.

The streets of Thamel which are generally crowded with western and Asian visitors even during the off-season of tourism have become eerily silent with pubs, bars, and restaurants that were once teeming with visitors becoming ghostly vacant, causing an unprecedented loss of business.  “It is difficult to predict how long it will take to recover from this loss - these are very uncertain times. Our business relies on the confidence of travellers combined with the ease to travel - both have been affected badly this time,” informs Raj Gyawali, founder of Social Tours and co-owner of Karma Coffee.

During the start of 2020, Social Tours and Karma Coffee were doing well but, the business later declined following the coronavirus outbreak. With little reserves, Gyawalis managed to keep the team afloat for three months during the lockdown, and paid full salaries to their staff, but post lockdown he is planning to revise the mechanism. “We have not cut staff yet, but the loss to our stakeholder base that extends to about 250 - 300 direct stakeholders is evident to see,” informs Gyawalis.

According to Thamel Tourism Development Committee (TTDC), there are altogether 10,000 rental shutters in Thamel, Paknajol, Kaldhara, and Dhobichaur area. The rent of the shutter spaces varies from Rs 12,000 to Rs 1 million a month. TTDC informs that 2,200 landlords in the area receive around Rs 800 million monthly in rent from tenants.

Analysing the financial hardship raised by rents, TTDC, along with various tourism associations and entrepreneurs had made negotiations with the landlords to deduct the rent by half for at least a year. Even though the landlords agreed, with the request of a wavier on rent, but, most entrepreneurs still complain that they have to pay the rent in full though their business is down.    

Narayan Krishna Shrestha, the sole proprietor of Lucky Thanka, has been running his art gallery in a small space in Sathghumti for more than two decades. He pays Rs 70,000 a month to his landlord for the shutter space that is close to 10X10 feet in size and has not received any discounts. “I have been compelled to pay the rent in full. While others are providing discounts, mine has incremented the rents. They have directed me to pay Rs. 100,000 a month,” he shares.

According to Shrestha, he could only sell paintings worth around Rs 30,000 in July. “Even though my sales have declined tremendously, I need to pay rent every month. If the situation persists, there is no other option than to quit the business. People are closing their businesses regularly, 15 shutters were vacant yesterday, and the number is growing,” he adds.

Lord of Drinks (LOD) club that used to be hustling and bustling with youths and foreigners partying has remained closed for more than four months now. Rabin Shrestha, CEO of LOD, informs that they will only reopen the club after the government’s order.

“There has been a great loss of business due to COVID-19. We had 160 staff that includes service staff, bartenders, kitchen staff, and securities. We haven’t laid off any of our staff yet. Hopefully, we will have all of them once the operation starts,” he informs.

However, Shrestha believes that the recovery is going to be very slow for every business in Thamel. “But we are hoping it will be back on track by next year, we have started renovations and are planning to come up with some amazing events to get back to business,” he adds.

Similarly, KC’s Restaurant and Bar, one of the pioneer restaurants in Thamel, resumed its operation after four months of lockdown. The restaurant reduced its staff from 8 to 5 during the lockdown and operated take away services.

“The four months of lockdown has led to great losses with rental and staff as we still need to pay them as they are dependent on us. We suffered more than Rs 1 million loss during the period,” informs Ritesh Marwadi, owner of KC’s Restaurant and Bar.

Despite all the challenges, KC’s is taking time to improve its services and customer experience. “As it’s a 40 plus year old bar, we are taking all necessary precautions and will be promoting to our near and dear ones,” he adds.

Bhabishwar Sharma, vice president of TTDC estimates the value of business investments (Including value of land) in Thamel to have an investment of Rs 6 trillion and entrepreneurs’ loan to be more than Rs 6 billion.

“This is a difficult period where tremendous losses are regular. Many new businesses - hotels, restaurants, travel agencies had just started their operation this year due to Visit Nepal 2020 campaign and are currently struggling to survive. Some of them may survive these hardships but, not all,” he adds.

In Thamel, there is a mix of entrepreneurs who have been hard hit by the Covid-19 crisis. Those that could not take it have already left, and they might come back when tourism comes back. Some are hanging on, because of pre-paid rents, or in the hope that things will change.

“I think that how Thamel changes and modifies itself to the new normal of a much-reduced tourism business will determine how fast it recovers. Every crisis has an opportunity hidden in there, and Thamel has one too,” Gyawali informs.

Meanwhile, Sharma considers the government has been incompetent. “Entrepreneurs pay taxes to the government regularly but now when they are suffering, the government has not supported them. Instead, they directed them to pay the taxes. Even though Rs 50 billion has been allocated for SME’s but the modality to apply for the soft loan is yet to be finalised,” he adds.   

Similarly, Gyawali informs that the measures announced by the government might help some, but not the small and medium entrepreneurs. “We are in no position to take a loan to pay salaries and rent, especially in these uncertain times. But as is usual in Nepal, it was not even expected. We have never had a government that truly understood how the economy and businesses function. So what can you expect out of incompetence,” he adds.

Sharma says private sectors-entrepreneurs, house owners, banks need to cooperate and support each other through these hard times.   

However, tourism entrepreneurs believe that Thamel has a huge opportunity to move into a model domestic tourism hub. “Thamel should take this opportunity to clean its image in the domestic market, put in more walking streets, street restaurants, and leisure areas for families. It should bring in more art and music and great cuisine, clean up the drug scene, and work towards being the top spot in Kathmandu for locals to hang out,” states Gyawali.

Gyawali additionally states this image eventually will fit the requirements of the travellers too in time, who love areas that are not exclusively meant for them, but local areas that are thriving. “If the right action is made, in this direction - again requires will, vision and determination to make it happen - it could turn around really very fast - regardless of whether tourism comes back sooner or later in Nepal,” he adds.

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