In recent years, the hotel sector has emerged as a key driver of investment in Nepal’s tourism infrastructure. However, the Gen Z protests on September 8 and 9 dealt a blow, with major properties such as Hilton, Hyatt Regency, and Varnabas experiencing arson and vandalism.
In this interview with New Business Age’s Tamish Giri, Tek Bahadur Mahat, CEO of the Hotel Association Nepal (HAN), talks about how the hotel industry is coping with the aftermath of the recent unrest. Excerpts:
What steps has the government taken regarding the recent unrest in the Hotel Sector?
On September 26, the Ministry of Finance issued a circular offering relief measures, but only for hotels directly damaged or destroyed. Yet, the reality is that the tourism sector has suffered far beyond these directly affected properties. Even hotels that weren’t physically harmed are experiencing severe disruptions — from plummeting bookings to damaged international perception. Nepal’s image abroad has been affected, and tourists now hesitate to visit due to safety concerns.
How has this affected this season?
Our peak season has been deeply disrupted. With elections scheduled for March 5, 2026, foreign visitors are hesitant to plan trips. Bookings for upcoming seasons have fallen sharply. Political rallies and protests, even if peaceful, create uncertainty. Tourism is an extremely sensitive sector — minor unrest can ripple across the industry, affecting both revenue and jobs.
What financial pressures do hotels face?
Many hotels are facing critical financial strain. They must pay quarterly loans and interest, but with occupancy rates dropping drastically, revenues are insufficient. Banks, following rigid policies, treat all operating hotels the same, which unfairly burdens even those that are technically “open.” Without intervention, many hotels risk insolvency.
How many hotels are directly affected and to what extent?
Around 30 hotels, including Hilton, Hyatt Regency, Varnabas and others in Kathmandu and Pokhara, have faced varying levels of damage. Some may reopen in weeks, others will need months. The full impact also affects suppliers, employees, and the wider tourism ecosystem.
What is the estimated economic loss?
Preliminary estimates suggest direct and indirect losses around Rs 25 billion. Over 2,000 employees have been affected, creating a ripple effect throughout the economy. The loss is not just financial — it affects livelihoods, employment, and investor confidence.
What is the current occupancy level in hotels?
Before unrest, average occupancy ranged 50–80%. But, it has now dropped to 20–30%. Some hotels reported only 3–5% occupancy, while others faced complete cancellation. Overall, the sector is experiencing a 75–80% average loss in business – an unprecedented blow to an industry crucial to Nepal’s economy.
Are new hotel investments affected?
Yes. Several international chains, including ITC and Lemon Tree, were planning to enter Nepal. Many projects may be delayed as investors reassess risk. Despite this, we believe tourism must demonstrate resilience — recovery is possible if strategic support is provided.
What support is the industry seeking from the government?
We urge the government and Nepal Rastra Bank to consider the actual operational realities of hotels, not just tourist arrival statistics. We need deferred loan payments, restructuring of financial obligations, and rescheduling of repayments to sustain hotels until the situation stabilizes. These measures are critical to prevent permanent closures and job losses.
Tourism is a cornerstone of Nepal’s economy, touching all levels of society — from large investors to small entrepreneurs. Yet repeated crises — earthquakes, blockades, pandemics, and political unrest — show its fragility. Each crisis impacts employment, revenue, and inventors’ confidence. Without coordinated government action and strategic support, Nepal risks losing not only income but also its reputation as a safe and attractive destination.
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