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SILVER LINING IN THE TOURISM SECTOR

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SILVER LINING IN THE TOURISM SECTOR

In 2019, about 1.2 million tourists came to Nepal, and the income of tourism and hospitality businesses increased to good levels. Private sector investment also increased significantly in the sector targeting the upcoming Visit Nepal 2020. However, entrepreneurs and workers in the tourism and hospitality sector are now struggling to save their businesses and jobs.

It's been a year and a half since the start of the Covid-19 crisis. At first, it was very scary. But now we have no choice but to move and survive. As a silver lining in a black cloud, now is the time to look for opportunities and survive this crisis. The tourism sector is the mainstay of Nepal's economy. As soon as the situation in tourism improves, it will positively impact other sectors. Even during the pandemic, tourists have come for adventure tourism which Nepal is famous for. A silver lining has been seen in the tourism sector due to the growing number of foreigners and domestic tourists in the recent days.

Only 230,000 tourists visited Nepal in 2020 and the number will be similar in 2021. However, it will depend on how many tourists will come in the main season of October and November. It is not possible to bring even 25 percent of tourists of 2019 in this year. It shows where our tourism industry stands how much trouble it is facing. Even when 1.2 million tourists arrived here in 2019, tourism entrepreneurs were a bit scared because the Nepal Tourism Year 2011 had leaped tourism. The country, which was receiving 500,000 tourists yearly for 25 years, welcomed 800,000 guests that year.

Observing the increase in the number of tourists, bankers, investors and even political leaders started to consider the development of the tourism sector as a basis of prosperity. Investments started to pour and those who had never paid attention to the tourism and hospitality business before began to take the sector seriously. Many people were investing without having a basic understanding of the sector. Coming to 2019, we were scared because huge investments came into the sector resulting in an oversupply of hotel rooms and services even though the arrival of tourists hit a new record that year.

That investment was made not by individuals but by taking loans from banks and finance. Despite the significant increase in the number of tourist arrivals in Nepal in the first eight years of the year, we were scared in 2019. Because the supply was seen to be more than the demand in the hospitality sector.

Now we have to wait for at least five years to reach the 2019 level. It is still not clear that tourism will bounce back fully by 2025. The government and the business community must work together to find a solution to support struggling businesses that have reached the verge of collapse. In the past, we never hesitated to pay the 25 percent income tax, value added tax (VAT), TDS and local taxes as per the rules.  Therefore, it is our right to expect support from the government. At the moment, tourism and hospitality businesses need comprehensive relief package. Relief measures announced till now are insufficient.  

We need a new approach to branding and promotion of our tourist destinations. Many countries have kept Nepal in their 'red lists' due to the risks related to Covid-19 and many foreigners think our country is a no-go zone for the time being. Countries are divided into four zones -- red, yellow, amber and green -- based on their Covid-19 situation.  Many tourists enthusiastically visit countries in green and amber zones and avoid visiting nations listed in yellow and red. If a British tourist comes to Nepal, he/she has to stay in quarantine even when they return home as Nepal is in the red zone. After everyone is vaccinated, Nepal may be able to enter the green zone.

To save the tourism business, it is necessary to create an environment for adventurous tourists. At the same time, domestic tourism should be encouraged to save the country's tourism sector. The government has also said that it will implement a 10-day paid leave for government employees to promote domestic tourism which is a positive step.

(Shakya is Chairman of Ace Hotels and former President of Hotel Association, Nepal (HAN). This article is based on a conversation with him.)

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