“Nepal Needs To Focus On Indian, Chinese Tourists” Binayak Shah

As Nepal's tourism witnesses a gradual revival following the devastating earthquakes and border disturbances, Secretary General of Hotel Association of Nepal (HAN) Binayak Shah spoke to New Spotlight on various issues. Excerpts:

Dec. 3, 2016, 5:45 p.m. Published in Magazine Issue: Vol 10. No. 8,December. 02,, 2016 Mangsir 17,2073)

How do you see the state of tourism industry now?

After years of stagnation, the tourism industry is bouncing back. The booking has increased and the occupancy rate of this year is satisfactory. Given the current trend, we are hopeful that the coming year will be favorable for us.

How do you view the income from the tourists?

If you look at the data of the year 2000 AD, the tourist arrival was just a little over 200,000 but income generated from the tourism industry was over 200 million dollars. In 2013/014, the tourist arrival was over 700,000.000, but the income was just over 400 million dollars. Comparing with the earlier figures, the income should have gone many folds. However, we are not getting the desired benefits.

Why is it like that?

There are many reasons for this. Nepal is known as a cheap destination. We see a lot of backpackers. There is the need of reform in the policy to change Nepal’s current status. For instance, I have myself got a good example of how prices are coming down. Travel agents are asking me to reduce my current prices by 30 percent compared to the prices of 2014 or before the earthquake. They are asking us that there are many other agencies in Nepal which are offering 20 to 30 percent cheaper rooms than available in my hotels. If I don’t reduce the prices, others will accept the offers. Since inflation is over 10 percent, there is nothing left for us.

Who is making the profit from all this?

With the loss of local hotel entrepreneurs, the profit margin of foreign agents has gone up. Agents booking from India and other parts of the world are maximizing their profits by booking our hotels for cheap prices. We cannot dictate our terms. The only thing we need to do is to bring these in policy framework. Tourism fraternities like HAN, NATA and TAN have been talking about this.

What do you say about home and stay?

Although it was introduced in Nepal with good intention, home and stay is one of the major challenges in the country now. This is good for trekking and rural parts of the country. However, this is growing in Kathmandu now. I don’t have any bias against home and stay. What I see is that there is the need to have government intervention.

With the number of tourists increasing recently compared to the previous years, why has the income not gone up?

The earthquake and terai blockade badly hurt the tourist arrival in the country in the last two years. Of course, hotels are receiving a good number of booking resulting in the increased hotel occupancy. The prices of hotel rooms are much cheaper in Nepal, as they were five years ago. How then can one expect an increase in the revenues?

It is also reported that the rise of 'home and stay' in Kathmandu Valley is directly affecting the hotel business, as they are selling the rooms for much cheaper than the star hotels. How do you look at this?

As I told you, we do have similar reports. Since the beginning of online booking, tourists have many choices. They can book rooms from wherever they like. With the widely available and cheap home and stay packages in areas like Patan, Kathmandu, Bhaktapur Durbar Squares, Swayambhunath, and Boudhanath, it is natural for tourists to choose these instead of paying higher prices in star hotels.  Since the houses are close to old temples of core city, hotels too cannot provide such offers. Similarly, since owners of home and stay don’t need to invest big money and one does not need to pay taxes either, their price is much cheaper compared to hotels which pay tax and invest huge money to maintain them.

Your statement shows that you are against home and stay?

I am not against home and stay. What I am saying is that the hotels have their own functions unlike the home and stay. There is the need of rules and regulations. There is the need to pay tax and generate employment. We don’t see the reflection of the home and stay in the government polices. It will go for a short time but it cannot go for a longer period. Currently, home stays are booked through online. Nepal is not receiving the money. Government needs to manage this.

Why are other airlines not coming to Nepal?

Tiribhuwan International Airport is one of the most expensive airports in the world in terms of prices of air fuel. The prices of air fuel here is almost four times higher than the Indian city of Kolkata and any other city of India. The landing and parking charge is much higher. As Nepal Oil Corporation is a government entity, it should reduce the price making it comparable with airports of other regions. It will send a positive message. As most of the airlines are carrying oil from their own country, it reduces the payload. Our airport management is very poor. Due to this, many renowned airlines have already lost their charm in Nepal. Airfare is very expensive. The rate of one hour flight is almost 400 dollars. This is excessively high. The fair from New Delhi to Singapore and Malaysia is similar to Kathmandu. In some cases, it is cheaper.

As Nepal Airlines has added two new aircraft and Nepal Tourism Board has a new team, don’t you think they will bring changes?

Of course, Nepal Airlines added two new aircraft and is working to introduce two new wide bodies on its wing. This will help increase the number of tourists. Similarly, the appointment of CEO and other directors in NTB helps. In the long term, we will benefit a lot. However, Nepal Airlines needs to make its management efficient and effective. Similarly, Nepal Tourism Board has a new team. However, we are yet to see any drastic change.

How do you see the role of Nepal Airlines in the present context?

National Airlines play an important role in promoting tourism. For example, Thai Airways, Turkish Airlines and Singapore Airlines are the backbone of success of tourism industry in Thailand, Turkey and Singapore respectively. National carriers can play prominent role in promoting tourism. With four new aircraft, with two wide bodies, Nepal Airlines will definitely contribute to Nepal’s tourism sector. Along with the aircraft, efficient management is the key to make it a success.

With the new national flag carrier aircraft and new team in NTB, what should Nepal do now?

Nepal needs to focus on Indian and Chinese markets, close to our border. Nepal can easily lure the tourists from these two countries. However, we are unable to tap them. Before earthquake, Nepal received almost 100,000 Chinese tourists annually with many Chinese carriers having connection to Nepal. However, the numbers are low and they are bringing small aircrafts. It is unfortunate to say that Nepal is yet to take the initiative. For instance, we are yet to take steps to disseminate the message in the grassroots level of China that Nepal has waived the visa for them.

What is the state of hotel rooms in Nepal?

At a time when many new renowned five star chain hotels are coming to Nepal, with over 4000 rooms, Nepal is yet to prepare the long-term policies to bring back the tourists. Globally renowned luxurious and branded hotels like Hotel Sheraton, Hilton and Marriot are investing in Nepal. Given the number of new rooms, the government needs to think about the new policies. This is good as they are investing in Nepal.

What plan does the government have to fill the rooms of new hotels?

An increase of 4000 rooms means adding 1.5 million rooms’ nights for the year. The question now is how to fill the rooms as this is a common challenge of government and private sector. Of course, it is not difficult for Nepal to bring tourists as it is situated between the two major countries, India and China. Annually, millions of Indian and Chinese tourists are leaving the country and it may not be very difficult to attract them. What is required is connecting flights to the main cities of these two countries.

How do you see the promotional activities?

Our promotion is still inadequate. Indian and Chinese cannot make the plan before visiting the country. They do quick plan and leave for foreign visits. Nepal is a cheap and close destination. NTB has almost billion rupees in budget and they are unable to spend the money for promotion. Although NTB has new CEO and other directors, the board is yet to actively move ahead. What we are saying is that we need to concentrate on India and China. We have to say that Nepal is safe for all.

How do you see the frequencies of flights?

There used to be 45 flights a week before the earthquake but now there are less than 20 flights a week and small aircraft. Even many Chinese who are willing to visit to Nepal, do not get the opportunity. A similar situation is there with India. Many people from South India prefer to visit Nepal but we don’t have adequate connectivity with South India.

How do you look at the fifty years of history of HAN?

This is a great experience for all of us. We have passed many ups and downs in the last fifty years. We do have long experiences.  In the word of our first president Prabhakar Sumsher Rana, we ran inns fifty years ago and now we have hotels with international reputation. We have hotels, rules and regulations. We have capability. 

How is your impression about the current state?

Politically Nepal has made tremendous changes over the last few years. However, any change in attitude and behavior of the people has yet to happen. Bureaucracy is not so cooperative and it takes time and even days to move files from one table to another. There is the need of doing favor for getting the work done. With frequent change in the government, politicians have failed to show the willpower.  Despite several political agenda like election, federal structures and so on, the country is yet to have the agenda for economic development. Without the program for economic development, we cannot move ahead.


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