General Background and International Perspective
More and more people are traveling around the globe in recent years. International tourism has been growing between 3 and 4%, a higher rate than global economic growth. This trend was expected to continue but the worldwide spread of coronavirus (CPVID-19) pandemic this trend will have an adverse impact on the travel and tourism industry with immediate effect. If the spread of this pandemic continues through the year travel and tourism industry will face serious challenges. According to one estimate industry could decline by 50% this year even if things turn better in the coming months. Industry’s revival could take a much slower pace than the sharp collapse of the industry.
According to one World Tourism Organization (UNWTO) estimates over 1.5 billion people were projected to travel but this is not going to occur due to the spread of global pandemic COVID 19. Earlier growth optimism potentials could have delivered development opportunities across the tourism industry. Unfortunately, the global economic recession is now a likely scenario due to the impacts of the pandemic. If this situation is combined with simmering geopolitical tensions and effects of humanitarian crisis arising out of impacts on the travel and tourism industry tourism growth will stall. More seriously, countries that rely heavily on the travel industry are likely to face devastating disruptions and economic meltdown.
Significance of this industry has been profound for travel and tourism became the world’s third-largest export industry and generated US$ 1.7 trillion revenues in 2018, preceded only by fuels (at US$2.4 trillion) and chemicals (US$2.2 trillion). This represents 29% of the world’s services exports and in some countries, it was 50%. The biggest beneficiaries of the industry in 2018 were United States (US$ 214.5 billion), Spain (US$ 73.8 billion), France (US$ 67.3 billion), Thailand (US$ 63.0), United Kingdom (US$ 51.9 billion), Italy (US$ 49.3 billion), Australia (US$ 45 billion), Germany (US$ 43,0 billion), Japan (US$ 41.1 billion) and China (US$ 40.4 billion).
However, China was the world’s top source market for outbound trips followed by France, Spain, Italy, the Netherlands and the United Kingdom. Most visitors chose destinations like France, Spain, United States, China, Italy, Turkey, Mexico, Germany, Thailand and the United Kingdom. This trend could have continued to prevail for some years to come because these countries have the best travel-friendly environment, the best infrastructures, efficient transport and high-quality accommodation facilities, a variety of attractions and several other activities. But this is problematic now given the global spread of the pandemic.
How was Asia faring in this?
Travel in Asia saw a steady growth of 6% in 2018, led by China which was the largest tourism source market. Visitors' trend indicated interests in Asia was rising, a high potential growth market, followed by Europe and America. Holiday trips were generally popular while the business travel sagged signaling shifting trend.
The top ten travel destinations in Asia during 2018 were China (62.9 million visitors), Thailand (38.3 million visitors), Japan (31.2 million visitors), Hong Kong (29.3 million visitors), Malaysia (25.8 million visitors), Macau (18.5 million visitors), India (17.4 million visitors), Vietnam (15.5 million visitors), South Korea (15.3 million visitors) and Singapore (14.7 million visitors).
Likewise, the top ten tourism beneficiaries in Asia, during 2018, were Thailand (US$ 63 billion), Australia (US$ 45 billion), Japan (US$ 41 billion), China (US$ 40 billion), Macau (US$ 40 billion), Hong Kong (US$37 billion), India (US$ 28 billion), Singapore (US$ 21 billion), Malaysia (US$ 19 billion) and South Korea (US$ 15 billion).
Like every industry travel and tourism also faced ups and downs with shifting industry trends impacted by innovations, technology, social, political, environment and economics. Changing human behavior, social context, geopolitical development, advancing technology and shifting demographics would generally drive future travel trends. This was already evidenced by shifting trends of the recent past when compared with past decades.
Rich and affluent Asians are traveling in large numbers, but they are different than most Europeans and North American travelers’ preferences, and as with the retiring baby boomers who have a different travel outlook and lifestyle perspectives compared with Millennials, generation X and Y-and Gen-Z. One must be cognizant of this trendsetters if the industry is to accrue additional advantages both from source and destination markets. The solo traveler may choose short adventure experience while the baby boomers may prefer family travel as friendly affairs with a combination of elements of fun, entertainment and a bit of luxury.
Ever-changing visitors profile would determine travel destinations, type of accommodation, mode of transportation and activities which are not similar across all travel markets. Travel-friendly destinations could include experiencing a bit of exploring local culture along with a short visit to historical, cultural and heritage sites.
In an era dominated by generation X, Y and Millennials, this industry may need to keep adjusting activities and attractions reflecting elements of conservation of the environment, and eco-friendly activities as the world are becoming more aware of the impending impacts of Climate Change effects. And, some segments of holiday travelers may prefer greener and environment-friendly destinations.
The concept of combining business travel with holidays or spending short leisure time is equally relevant to high spending business travelers. This trend includes travelers opting for organic and nutritious food on their table as a new brand of travelers is smart, health-conscious and demand quality and wellness in life over opulent luxury surrounding them.
What tourism in general means for Nepal?
As I narrate this, there are rising fear around the globe, rich and poor, of sudden of collapse the industry due to global spread of novel coronavirus (COVID-19) disease which has crossed all national borders, high seas, coastlines, white sandy beaches, majestic Alps, Jura and towering mountains of Himalayas sparing none. Unfortunately, this unexpected development has collapsed the government of Nepal’s “Visit Nepal 2020” campaign before it commenced. This pandemic likely to bring down Nepal’s tourism-driven economy to the knees because of a lack of adequate preparedness for control contains and prevention procedures for mitigating impacts of the infectious disease, and the possibility of returning migrant workers.
Tourism has provided significant cash in the foreign currency of the country in the past. It is much less now than the foreign exchange revenues received from overseas remittances (about US$ 30 billion annually). But, the direct impact on the local businesses and domestic job market from the tourism sector was visibly larger as compared to the volume of money recorded by Nepal Rastra Bank. The government report shows it earned some US$703 million in 2018, an increase of 6% over 2017, but with declining per capita tourist expenditure. Travel and tourism reportedly support one million people according to one estimate of World Travel and Tourism Council (WTTC) and provides local communities additional means of earnings.
The Government of Nepal has been laying emphasis on tourist arrival numbers rather than quality tourism. This simplistic approach to tourism campaign pushing for high numbers of tourist arrivals has not produced desired results.No doubt, the year 2018 showed improvement in tourist arrivals by 25% as compared to 2017. This increase should be seen in the context of a gradual rise in arrivals after the major earthquakes of 2015. This incremental phenomenon might have encouraged the government to set a target of two million visitors under the ‘Visit Nepal 2020’ campaign.
Tourism earning in Nepal is rather low if compared with Asian neighbors despite claiming that Nepal is one of the top tourist destinations. In this, policy attention somewhat seems to have misplaced with mere focus on tourist arrival numbers for years, rather than qualitative improvements of the travel industry and promoting quality tourism.
Traveling in any country should be smooth sailing in a tourist-friendly environment. But this requires a robust and efficient network of infrastructures, quality accommodation, and security. Hence, investments could have been made in expanding and upgrading travel destinations ranging from adding additional places of visits to cultural and heritage sites to traveling through spectacular natural scenic countryside combined with an authentic local culinary feast, to adventure events, to sports and relaxing activities, to access to health facilities and wellness services. These elements are no less important for foreign travelers and domestic visitors intending to undertake stress-free longer stays.
Nepal ranks above Bangladesh, Myanmar, and Bhutan in terms of contribution to GDP. According to one estimate of the World Travel &Tourism Council (WTTC)India contributed 9.2% of GDP in 2018 and supported 42.6 million jobs, Pakistan contributed US$ 7.6 billion and the tiny island of Maldives earned over US$ 2 billion in 2017 from the travel industry. Noteworthy is per capita average tourist expenditure in Sri-Lanka was US$ 174.It was only US$ 44 in Nepal.
Nepal is one of the cheapest destinations in the world. If we are to continue with a policy of least costly travel destinations with a focus on arrival numbers, it would not raise significant revenues with a low per capita expenditure rate. This policy is questionable if we are to consider the impacts associated with high numbers of low-paying visitors that may have on Nepal’s fragile eco-systems.
According to government data tourists were choosing mainly three activities like leisure holidaying, adventure mountaineering and trekking, and cultural pilgrimage.It was noted there was a noticeable change in the visitor origin profile for more and more Chinese were traveling to Nepal but not so much for mountaineering and trekking. Most visitors from source markets chose pilgrimage and historical sites linked to faith-related to destinations. Interestingly, these sites were equally popular with domestic visitors (76%), followed by Indian (13%) and the rest from other peer countries.
The 2018 data showed the bulk of visitors (including Asians) going around pilgrimage and heritage sites, some 70%, and then pleasure holiday trips. The top six source markets were India (17%), China (13%), USA (8%), Sri Lanka (6), United Kingdom (5), Thailand (4%). On average some 2 to 3% each from Australia, South Korea, Germany, France and Japan who visited Nepal. The noteworthy trend was a large number of visitors were from Myanmar (4%), followed by Malaysia and Bangladesh, 2% each, showing promising new emerging source markets. Among the visitors 53% were male and 31% were from the age group of 31 to 45 years. These emerging markets and trends are to be fully explored if more tourist’s arrivals are a primary goal of the government.
Tourist arrivals data of the past five years show arrivals numbers ranged from 500,000to 800,000except for 2015 when Nepal experienced major earthquakes and the number fell sharply. The highest peak of 1.2 million arrivals was recorded in 2018, an increase over 2017. This could go upward if more attention is accorded to the emerging source markets.
Nearly 66% of the total foreign visitors preferred visiting national parks, conservations sites like Annapurna Conservation Areas, Chitwan and Sagarmatha National parks while 2.4% chose trekking with the highest number heading to Humla, and some 32% of the visitors to pilgrimage sites. A small number visited Langtang, Manasalu and Bardia National Parks. This should inspire the development of these sites as new destinations, including areas like Shivapuri Nagarjan National Park, Gaurishanker, Kanchenjunga Conservation Areas, Shuklaphata National Park, and Koshi Tappu Wildlife Reserve, Shey Phoksundo Lake and Rara National Park. Clearly, policy strategies need to be reoriented at attracting visitors from emerging source markets, as prime market targets areas, for tourism promotion and development of popular destinations within Nepal.
Mountaineering is a popular sport in North America and Europe, and most climbers originated from the United Kingdom, France, United States, Germany, Spain, Switzerland, Russia, Austria, Italy, Poland, Norway, Netherlands and Canada, although numbers were not astonishingly high. Mountaineering expeditions were also from Australia, China, Japan, India and South Korea dominating the numbers originating from Asian countries. Principal destinations, as always, have remained the Everest, Amadablam and Manaslu.
Tourist arrivals data of the past decades show visitors from European countries, North Americas and Australia have largely unchanged while arrivals from emerging source markets Thailand, Myanmar, Malaysia, Sri Lanka, South Korea and Bangladesh increased. Tourism promotion in these source market countries could be more beneficial than a high focus on traditional markets that have not delivered the expected high numbers. But again, most Asian visitors might not be enthusiastic about mountaineering expedition and adventure trekking with the exception of limited interests from India, China and South-Korea. Young Asians generally preferred leisurely holidaying in combination with pilgrimage and visiting cultural heritage sites.
Apart from accruing multiplier economic effects, tourism could be an important source of pride for the promotion of the community’s history, culture and religious traditions. For years, tourism has played an important role in Nepal’s development by creating and sustaining domestic employment and local communities also benefited. If this sector is better organized focusing on the qualitative aspects of the industry, as noted in some destinations in South-East Asia, in addition to revenues it could foster better relationships between people of different identities and regions, develop awareness and respect for one another’s cultures, traditions and heritage. A combination of these elements would positively contribute to sustainable development through socio-political harmony and enriching common cross-cultural understanding. The government of Nepal should, hence, prioritize tourism development strategies with emerging elements and focus on qualitative investments in developing new tourist destinations - going beyond just the number crunch and mountaineering expeditions.
Even though the travel trend, as seen from the recent past, is unlikely to change significantly it is worth re-consideration investing more in the industry by unleashing foreign direct investments through the development of quality infrastructures for ease of access to national parks, conservation sites, restoration of religious and heritage complex, historical locations and other recreational facilities for high spending visitors. This must include high-quality accommodation, efficient tour organizations, operational safety, security, reliability and world-class transportation networks.
Nepal is blessed with a mosaic of multicultural local traditions, rich attractions and cultural heritage beyond having some of the world’s highest mountains. Nepal has a stunning landscape in a natural setting of low rising hills to medium to the high Himalayan range. However, this potential has not been fully explored and developed due to restrictions on foreign direct investments for the development of topmost world-class travel destinations for high spending travelers, like many other Asian countries have achieved.
Travel and Tourism is a highly competitive capital-intensive service industry. The creation of a niche travel destination will require foreign investment fine-tuned to global market trends. If we are to accrue comparative advantages from tourist-friendly destinations and market synergies there is a need for investment that includes sector expansion to top new destinations, building quality infrastructures, transportation, accommodation, and site development. Countries in Asia are targeting the same source markets, as Nepal, but with different strategies and offering a range of options, choices, and possibilities alluring potential visitors. Undoubtedly, this requires creative imagination, innovation,and the development of multitudes of possibilities for the unparalleled travel experience. Backpack travel era of the 60s is already over because the transformative 21st century is driven by generation X and Y-ers, and the Millennials.
Nepal’s traditional tourism interest continued to focus on adventure tourism with mountaineering expeditions and trekking. Government data show this focus has neither delivered high numbers of visitors nor increased foreign currency income even though the growing number of tourists are traveling around the globe in recent years. On the contrary, excessive reliance on mountaineering expeditions and adventure promotion resulted in an adverse perception emanating from the worldwide television images of amateur travelers clogged on top of the Mt Everest trail during the 2019 season. This has produced a profound but negative perception about the government’s environmental priority demonstrating shortcomings and a serious dent in organizational and management skills within the industry.
Nonetheless, Nepal remains a desirable travel destination from non-SAARC countries, but the challenge will be to manage it sustainably with consideration of protection of the environment, preservation of ecosystems and economic growth. It is obvious that changing traveler profile and travel trend it is unlikely mountaineering expedition will boom much further and produce high numbers of arrivals than what it is now. More and more visitors showed holidaying interests at locations shrouded with pristine natural surroundings of national parks, conservation sites,and other intriguing religious and inspiring cultural heritage sites. The future tourism activities, thus, may need to be fine-tuned differently than hitherto.
A significant part of the modern history of Nepal is linked with Kathmandu Valley which is endowed with rich tradition and heritage. This warrants preservation of crafts, culture, arts, traditions, temples, and stupas which are gradually overshadowed, if not disappearing, under the rising clouds of unfettered modernization and urbanization of the valley. The government should seriously contemplate the exclusive development of the valley into a prime travel destination through the restoration of Nepal’s historical, architectural and ancient glory.
If the government is keen to develop world-class visitors’ destination it must shift national capital Kathmandu out of the valley to anew site. Kathmandu is already becoming one of the least preferred living destinations in Asia because of the lack of several basic features that any nations’ capital aspires to possess. Kathmandu is be-set with problems like deteriorating air quality, water pollution, filth and garbage disposal problem, safe drinking water supply, poor sewerage and sanitation, rising respiratory diseases, poor transportation network system, low-quality infrastructures, congestion and damaging eco-system.
Nepal lies at the Himalayan tectonic fault line and prone to major earthquakes according to some projections. Overgrown, overcrowded Kathmandu valley sits on the lurched ground like a ship on high seas. Growing up and raising a family with a healthy living environment in Kathmandu is a big challenge for it poses aberrations to wellness, quality and standard of life of residents. It is reaching a tipping point when the valley chokes up with dust and air pollution. The situation could become life-threatening if this situation were to combine with a high possibility of a major earthquake, receding water aquifer and lack of clean energy supply to meets the needs of a growing population. Just imagine if the valley is struck by another major earthquake of the likes of the 1930s and/or 2015 it could be the Armageddon of Nepal’s civilization. This scenario is not a Hollywood drama sequel but a real possibility and deserves serious contemplation.
There should be no surprise that several countries have shifted national capitals to new locations. In Pakistan, the capital was moved from Karachi to Islamabad, and in Myanmar from Yangon to Naypyidaw. Last year, Indonesia decided to relocate flood-prone sinking capital Jakarta to a new site in East Kalimantan in Borneo island. India also moved its colonial capital from Calcutta (now Kolkata) to New Delhi. In South America, Brazil moved its capital from Rio de Janeiro to Brasilia. In Africa, Egypt relocated its ancient capital Memphis to Cairowhile Malawi relocated its old capital Zomba to Lilongwe. In North America, the USA moved its old seat of government from Philadelphia to Washington D.C.Canada shifted its old capital Toronto to Quebec City to finally in Ottawa.
Concluding Thought: Future Opportunities
Nepal can work on a comprehensive tourism masterplan to relocate national capital away from Kathmandu Valley and simultaneously develop pilgrimage sites, national parks and conservation areas for pleasure holiday destinations. More importantly, Nepal can be developed as a true retirement destination in collaboration with international entrepreneurs, attracting the aging world population, including the baby-boomers who may still have the old fond memories of traveling through 3-Ks (Kabul, Kathmandu and Kuta) of the 1960s.
Another area for consideration could be the development of a tourism theme “Reinventing Oriental Spiritual Circuit” incorporating pilgrimage site within Nepal that are spiritually linked with Hinduism and Buddhism, stretching from Janakpur Dham, to Devdaha, to Kapilavastu, to Siddharthanagar, to Lumbini, to Doleshwor Mahadeva,to Pashupatinath temples for spiritual enlightenment of visitors, from Asian countries and beyond. This travel circuit could be enlarged by incorporating additional sites such as Ayodhya and Sarnath, to Bodhgaya in Northern India. This is doable if there exists serious thinking behind the effective promotion and development of the tourism industry in Nepal.
Kedar Neupane is a founding board member of the Nepal Policy Institute, a retired senior UN official, and president of ‘We for Nepal’ association based in Geneva, Switzerland. He has worked in several countries in Africa, the Middle East, Asia and Europe in his 38 years of service with the UN system and was Senior Change Management Advisor to UN High Commissioner for Refugees. Email: Neupanek1950@gmail.com