Rise in Arrival of Tourists Leads to Increase in Profits of Hotels

With the increase in arrival of foreign tourists in Nepal, hotels have seen a rise in profits over the last fiscal year (FY).

According to the last year’s unaudited financial statements of hotels listed on the Nepal Stock Exchange (NEPSE), two hotels have reported increased profits: Soltee Hotel and Taragaon Regency Hotel (Hyatt Hotel).

Soltee Hotel earned a profit of Rs 600 million last year, up from Rs 554.9 million the previous year. The hotel's total income also rose, reaching Rs 2.4975 billion compared to Rs 2.2546 billion in the previous year.

Similarly, Taragaon Regency Hotel reported a net profit of Rs 518.27 million last year, compared to Rs 404.3 million the year before. The hotel earned Rs 1.7383 billion from operations and other activities last year, up from Rs 1.5718 billion in the previous year.

Experts attribute the increase in hotel profits to the rise in arrival of foreign tourists.

According to the data of the Department of Immigration, arrival of tourists surged by more than 36,000 in the last four months of 2024 (April-July). During this period, 342,924 tourists visited Nepal, compared to 306,452 in the same period of 2023. In 2023, 98,773 tourists arrived in April, 77,703 in May, 72,250 in June, and 57,726 in July. In April 2024, 111,376 tourists came to Nepal, 90,213 in May, 76,736 in June, and 64,599 in July.

Tourism, which had slowed following the COVID-19 pandemic that began in 2019, has recently begun to recover. Over one million tourists entered Nepal in 2023, the first time after the onset of the pandemic. The increase in tourist numbers has also led to higher hotel occupancy rates. The fourth-quarter financial statement from Taragaon Regency Hotel highlighted that the occupancy rate had improved due to increased tourist arrivals.

While profits increased for two five-star hotels listed on NEPSE last year, one hotel reduced its losses, and another saw a decline in profits.

City Hotel Minimizes Losses

City Hotel (Hyatt Place) reduced its losses last year. In FY 2022/23, the hotel reported a loss of Rs 272.2 million, which decreased to Rs 204.7 million in FY 2023/24. The reduction in losses is attributed to increased operating income.

The financial statement notes challenges including reduced customer arrivals due to news related to floods, higher customer costs due to government-imposed luxury taxes, and competition from newly opened branded hotels in Nepal.

Radisson's Profit Falls

Oriental Hotels Limited (Radisson Hotel) saw a decrease in profit last year. The hotel earned Rs 123.23 million, down from Rs 160.9 million the previous year. The 23.99% drop in profit is attributed to fewer events such as weddings, reduced banquet sales, and increased staff and other expenses. The financial statement notes that competition from new hotels and renovations of older hotels have impacted profitability.