Tourism Shows Signs of Recovery

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Tourism Shows Signs of Recovery


On August 16, Bijay Amatya, managing director of Kora Tours, received an incredible message from his European agent. The agent made his day by confirming bookings for big groups of more than 300 European and American tourists for the upcoming tourism season. These are all high-spending tourists. The bookings brought joy not only to Amatya but to the entire Kora team which is gradually recovering from the impact of the pandemic.

Kora Tours, since its inception two decades ago, has been focused on high-budget tourists from Europe and the Americas. Thanks to the confirmation, the business this year will be around 50% of the business compared to pre-COVID times, said Amatya.

Similarly, Ashok Pokharel, director of Shangrila Tours, too has observed a slight growth in the number of bookings. However, the realisation of those bookings is low. This means that agents abroad are actively trying to sell Nepal, but not enough people are buying, Pokharel added.

Meanwhile, Amatya and his team expect to meet the full recovery most likely by 2025, only if other problems like the pandemic or war don't happen. Similarly, Shangrila Tours, which focuses on the tourist source market in Japan, Switzerland, the USA, UK, Germany and South America, has found the recovery from COVID going slow. Pokhrel said he expects Nepal to witness a total tourist arrivals of about 450,000 by December-end. He believes that about 700,000 foreigners will visit Nepal in 2023 if all goes well, and maybe a million footfall in 2024. Pre-COVID levels of 1.2 million or a little higher will probably be achieved in 2025, he opined.

Adventure travel in Nepal is picking up faster but the numbers for sightseeing tours are going slow. However, the premium market is recovering a little faster than the general market, according to people in the travel industry.

It is probably the inflation fears in the prime tourist-generating markets which are stopping middle-class people from vacationing. However, most premium travellers are not affected as harshly, share Pokhrel. Kora Tours, which focuses on high-budget tourists and arranges trips around Kathmandu, Chitwan and Pokhara, have observed a rise in booking compared to last season by 15-20%.

We have added luxurious segments, and premium products are selling well, adds Amatya. Likewise, with the rise in the number of luxury tourists, President Travel and Tours has added few travel and tour packages targeting religious and nature lovers’ traffic. “We are working on a few concepts like leisure travel, sustainable tourism and ecotourism,” said Bhola Bikram Thapa, managing director of President Travel and Tours.

However, Thapa shared with New Business Age that booking at his agency is down by 50% compared to last year. For tour operators catering high-spending tourists, the most popular tour packages continue to be the Kathmandu, Pokhara, and Chitwan circuits. Likewise, packages with Kathmandu and its surroundings continue to prove good sellers. In the meantime, hotels in Nepal haven't seen any growth in room booking. Sajan Shakya, general secretary of the Hotel Association of Nepal (HAN) says that the room booking is not up to the mark.

According to Shakya, the HAN member hotels have room occupancy and booking of only 20-25% for the coming tourism season, way lower than the pre-pandemic level. However, Shakya added that hotels in Pokhara, Chitwan and the outskirts of Kathmandu Valley have witnessed an immense growth in occupancy due to domestic tourists.  

Foreign tourist arrivals in Nepal have increased significantly in the past eight months of 2022. According to the Department of Immigration, 326,667 foreign tourists visited Nepal between January 1 to August 31, 2022. Even though tourist footfall has grown compared to past years, tourism entrepreneurs and hoteliers say that the number is too low to keep the tourism business active.

Meanwhile, HAN is organising Nepal Hospitality Conclave to uplift the hotels to attract more foreign tourists. Shreejana Rana, president of HAN, told New Business Age that Nepal's first hospitality conference will help to find solutions to the problems that have been seen, experienced and may arise in the future. She added that the event will bring attention to new ways of marketing Nepal's tourism products and services.

HAN believes that the conference will play a crucial role in maintaining the level of the Nepali hotel industry and overall tourism development by using some new practices. The number of tourists coming to the world market after COVID is limited, but since the market is open to all, it is a challenge to bring tourists to Nepal, hoteliers say.

“For this, HAN is organising the conclave to prepare the strategy to be adopted and learn from the practices of other countries,” Shakya added. Investment in the hotel sector has been increasing in recent years. However, hoteliers say that more investment should be made on four aspects - quality service, hygiene, skilled manpower, and security.

Hoteliers, however, say that the government's budget, monetary policy and other programmes are not in favour of the hospitality industry. “Hoteliers and tour operators have always been doing all their tasks/business themselves. There is no support at all from the government side,” Thapa of President Travel and Tours lamented.

In the meantime, Balkrishna Pandit, manager of Air Dynasty Heli Service, shared with New Business Age that his company and other helicopter operators have observed a surge in booking for mountain, charter and sightseeing flights for the coming tourism season. Air Dynasty has observed an almost 70-80% rise in booking from foreigners compared to the corresponding period last year, he added.

Meanwhile, Yograj Kadel, the spokesperson for the Airline Operators Association of Nepal (AOAN), says that domestic airlines are doing well lately. However, the airlines are seeing few foreign travellers, he added. Kadel further added that booking from the foreign tourists for the upcoming tourism season is nominal at this time. “It might be due to the circulation of news regarding the Dengue outbreak and the rise in global inflation. However, we are still in the middle of September. Things might start changing from the last week of this month,” he added.

According to Kadel, domestic travellers account for about 90% of airline passengers at the moment. “The Department of Tourism has issued 237 mountaineering permits for the autumn season. This might bring some business to airline operators,” added Kadel

Meanwhile, tourism entrepreneurs share that the shortage of skilled manpower is becoming a major challenge for the tourism industry. They say many workers involved in tourism have moved to other professions or simply chosen to retire following the COVID pandemic. “We are also facing a shortage of equipment like buses, vans and cars for tourist use, and lastly, we have seen attrition of tourism-related businesses,” Pokhrel of Shangrila Tours said.

Likewise, Amatya added the lack of enough seats from tourists generating countries and high airfare is the biggest issue faced by the tour operators. “Also there is a need to upgrade our infrastructure, specifically the roads,” he added.

Thapa of President Travel and Tours says there is scarcity of buses/transportation for inbound tour operators as they are all dumped in the garage after the pandemic. “And for the outbound segment, there is foreign exchange scarcity,” he added.

Meanwhile, tourism stakeholders express their anxiety over the incompetency of the Nepal Tourism Board (NTB) and the tourism ministry and its agencies. The NTB and the tourism ministry have their collective heads stuck in the sand and have no perception of the gravity of the situation, shared a stakeholder. He added that the government could use NTB, NATHAM, and the tourism ministry to help in ramping up tourism manpower.  

Likewise, Pokharel, witnessing the poor state of the national flag carrier, opines that the country could desperately use access to finance on easy terms to replenish the fleets. “It’s a pity that the tourism industry needs to vie for the same customers as our neighbours who are buying the same motor vehicles for one-third the price,” he added.

He further added that the government should come up with incentives to bring shuttered businesses back online by waiving off fines, penalties and fees for a few years. NTB and the tourism ministry are unable to do anything about this due to their internal problems, Thapa, President Travel and Tours, said.

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