Nepal Needs Concerted Efforts To Revive Tourism: Binayak Shah

Nepal’s tourism industry has been facing the most difficult time in its history due to the effect of Covid-19. However, the government is yet to come up with a recovery package. BINAYAK SHAH, the senior vice president of Hotel Association Nepal, spoke to KESHAB POUDEL on the issues related to the state of tourism and the hotel industry in Nepal. Having been involved for over 30 years in the construction of the Nepali Pavilion in Expo, Shah also spoke on the ongoing Expo 200 Dubai, UAE and Nepal’s participation in it. Excerpts of the interview:

April 10, 2022, 8:36 a.m. Published in Magazine Issue: VOL. 15, No. 16, April.08, 2022 (Chaitra,25,2078) Publisher and Editor: Keshab Prasad Poudel Online Register Number: DOI 584/074-75

How do you view the Expo in UAE?

In terms of the construction site of UAE’s Expo, out of 36 thousand workers involved in it, 12000 are Nepal related. Interestingly, the name of all the workers written in the replica is pasted in the building. United Arab Emirates government normally charges 2600 dirham as royalty to the workers from other countries. However, UAE’s companies pay just 250 dirhams while hiring Nepali. The UAE government has been offering generous support to Nepali workers. Had Nepal’s President and Prime Minister attended Nepal Day and highlighted this generous support given by UAE, it would have done a great service in Nepal’s interest. Even the foreign minister did not find time to visit UAE Expo started in October and is close to shutting down next week.

Why did the PM not visit?

Although Prime Minister Sher Bahadur Deuba was scheduled to attend Nepal Day, the plan did not materialize because of national conventions and elections of the Nepali Congress. With his busy schedule, the foreign minister also did not find the time. Then the responsibility shifted to the secretary. However, the joint secretary took part on Nepal Day. At a time when Nepal desperately needs foreign investment and the promotion of tourism, Nepal’s political leadership needs to cash in on such a global event. Unfortunately, Nepal’s political leadership is yet to see the economy as a priority. Nepal Day was highly important for the country to promote it as a tourist and investment destination in the global market. We have missed it. March 3 was Nepal’s Day. The Ambassador of Nepal attended as the chief guest.

Based in Paris, the Bureau of International Exposition (BIE) has been organizing the Expo every five years since 1851 with different themes to depict human progress and to show what humankind will do in the future. Nepal has been continuously participating in the expo since 1970. Our private company ITG has been appointed by the government to construct and manage Nepal’s pavilion at Expo.

What was the theme of this year?

This year’s theme was Connect potentials for sustainable growth. Showcasing the vast opportunities arose from Nepal’s unique location between India and China, the two fastest-growing super economies in the world.

There are 500000 Nepalese working in UAE. Nepalese have a good reputation in UAE. Expo helps to enhance the image of the country. There are 198 pavilions from different countries. UAE has highly appreciated the contributions of the Nepalese people in the construction of the UAE. This is my 12th expo.

How has it been affected by COVID-19?

COVID-19 Pandemic has affected the Expo as large numbers of investors are still in a watch and see state. However, the host UAE has made all possible efforts to bring major investors into the UAE. Expo helps to introduce the country profile of Nepal. This kind of expo also gives opportunities for a country like Nepal to showcase its potential. Situated between two major economic powers with huge potential for hydropower development and natural heritage like the Himalayas, cultural heritage to attract the tourist, Nepal is a sellable destination for the investors.

What did Nepal project in Expo in the last six months?

Expo is a global forum. Along with family, diplomats, businessmen, intellectuals and investors also visit the expo. As mentioned earlier, the expo provides immense opportunity for a country like Nepal to showcase its potential areas for investment. At the expo, 192 countries and 50 international organizations like United Nations are participating with their own pavilion. As every country is presenting its own progress, there is a feeling of competition. Making a pavilion is very important. Our presentation is quite good.

Situated between the two countries, Nepal has immense possibility to increase the investment in agriculture, tourism, mountain and hydropower. 25 million direct visitors and almost 25 percent of others watched through social media. This has worldwide coverage. Due to the presentation of Nepal, the expo will encourage investors in Nepal in the long term. Many ex-pats living in Dubai have already visited Nepal following the Expo. The good part is that currently there are seven flights a day between Dubai and Nepal. It is good to say that all the flights are packed. This also gives relief to Nepal. Despite the Covid-19, the flights are operating at full capacity. Nepal has very good flight connectivity. As a company, we did our best. However, it should have been done at the national level by organizations like Nepal Tourism Board, Nepal Investment Board, and Nepal Airlines. We did our best. Our plan was to build Kathmandu. However, we failed to construct it due to the Covid-19 lockdown. This will give good benefits to Nepal.

What is the state of Nepali tourism following the crisis in Ukraine?

The positive part is that the Covid-19 pandemic has globally subdued and many countries have already announced opening plans with relaxation in restrictions. The confidence of the people has increased following the administration of vaccines. It is good to say that 92 percent of eligible Nepalese have already secured a vaccine against Covid-19. With this, Nepal’s tourism has started to move. The immediate market is domestic tourism. At a time when the country has to wait for a few more years to the see revival of long-haul tourists, the indication of a gradual revival of domestic and regional tourism is good. However, this trend is not enough to recover the tourism industry in Nepal. Short-haul tourists are from India, China and Southeast Asia.

Where does Nepal need to focus now?

Our current focus should be based on internal tourism. At present, domestic holidaymakers are traveling to tourist destinations like Pokhara, Chitwan and other parts helping the hotel industry for surviving. Sizable domestic tourists are visiting hotels in Nagarkot, Dhulikhel, Pokhara and Chitwan on weekends supporting the hotel industry to survive. Although long-haul tourism is yet to start, Nepal needs to start planning for the future. All of us need tourism because this is the sector that provides the necessary support for quick economic progress and prosperity. This provides immediate benefit to the people. There is stiff completion for tourism in the regional market. The question now is how we manage the post-covid-19 situation. For example, Maldives and Azerbaijan have shown the way.

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How do you see the possibility of luring Indian tourists?

The good news for Nepal’s tourism market is that Indian tourists are coming again. Even a large segment of Indian tourists are coming by bus. Since Nepal is closer to Indian tourists, they will start to visit Nepal. However, this is not with Nepal’s northern neighbor China which is yet to allow its citizens to travel outside the country. Here, Nepal should use its goodwill with China requesting them to open Nepal to their citizens. The Nepalese government has already requested the Chinese foreign minister to consider opening to Nepal. Since South East Asian countries are yet to open their door to Chinese and Indian tourists, Nepal can sell the destination. Similarly, Nepal also needs to sell its natural paradise destinations like trekking and mountaineering to lure more and more tourists.

What is the state of tourists from Europe and America?

Recently, the arrival of foreign tourists has also increased. With the receding of tourists, Nepal’s die-hard lovers from Europe and America have already started to arrive for trekking and mountaineering. This is not enough alone. Although the delta variant has gone long back and Omicron also subsided, many developed countries still put Nepal in their travel advisory. As Nepal is still in travel advisory of the United Kingdom, United States of America, Japan, Australia, Canada and other countries, the government should take diplomatic initiatives to remove travel advisory. At this juncture, no tourist can visit the country with such a travel advisory where the premium of insurance is high. This is one of the negative areas for a revival of Nepal’s tourism sector.

How do you see the package of the Government?

The government has announced 10 days of tourism leave for each civil servant. As almost eight months have already passed, the working procedure is yet to develop. The government is just paying lip service. Nepal’s tourism sector has been passing through a difficult period but the government has not changed anything. The government has completely ignored and neglected the tourism industry. We were unable to organize Visit Nepal Year 2020. The government needs to announce an international mega event by 2024. This kind of event will bring all stakeholders to the same place and send a message all over the world that Nepal is back on track. A tourism revival committee has been working in the ministry for the last four months. The private sector has already put forth its demand and concern before it. The committee should reveal the finding as soon as possible. If it gets slow, other countries will hijack the agenda. There is still uncertainty about the tourism sector. All countries have been facing hardship; there is much competition among nations.

With the negligence of the government, the hotel industry has been facing all kinds of the financial burden alone. Without any relief packages and incentives from the government, how will the hotel industry survive?

This is the question everyone has been asking us. You also raised a valid issue. However, problems come with opportunities also. The hotel industry is a risky industry. We do invest huge money in the hotel but the rate of return is lengthy. The bigger the hotel, the bigger the risk will be. Risk recovery is also a long-term process. The plans are made to make recovery targeting 20 and 25 years. Tourism is an integrated business that involves hotels, banking, government policy, trekking agency, airlines, rafting and travel agency. We have been facing a very hard time. There is a very difficult uncertainty in the tourism business. What I have been suggesting is a need for an integrated policy. For instance, the Ministry of Home Affairs, Finance Ministry, Tourism Ministry and Health Ministry have their own interest and policies. There is virtually no coordination among the ministries which is sending uncertain signals. There is a need to have national policy and guidance. The Ministry of Tourism needs to be followed by other ministries. All three tiers of government and the private sector should go together.

Don’t you think forthcoming elections will have an impact on the revival of tourism? How local elections will affect the revival of the tourism industry?

As local elections are coming closer, it will affect the tourism sector. Visitors will avoid the elections period. This means more setbacks for us. The current Russian-Ukraine crisis has also badly affected Nepal’s tourism sector. Problems will come and go. The only thing is how to manage it. Government should take the private sector side by side. It is unfortunate to say that the government has failed to build business confidence. We are in the lowest ebb. The government should provide certain incentives in the coming budget to enhance the business confidence.

Government, Ministers and politicians always say the tourism sector is the second-best foreign currency earning center employing the largest numbers of people. However, the same government and political leaders also press the hoteliers to pay full salary to employees even during the period of closure of hotels. Is not it contradictory? If so, how will the tourism industry survive?

Definitely, there are so many contradictions. We are compelled to pay our salary even during the period of closure. Besides, we have to pay our bank installments, electricity, taxes and water bill. Despite expressing optimistic views, there is a very hard time surviving. Government and policymakers are showing apathy towards the recovery and revival of the hotel industry. With lapses of a period of the ordinance, CCMC is no more legally existing. However, visitors are compelled to fill in CCMC forms developed during the peak time of the pandemic. This has been adding hassles only. Although no one needs to present the CCMC at TIA, the airlines do not allow passengers without the code because CCMC is still mandatory in the travel advisory of the Nepal government. We have been paying taxes, and bank installments as a normal period. If you see the government policy and programs, they have not realized the current unprecedented time. The government has announced a one-month free visa for the tourists. However, the government is yet to prepare procedures and change the regulations.

How government is responding to the demand of the industrial sector?

In his recent interview, the president of the Federation of Nepalese Chamber of Commerce and Industry Shekhar Golchha has made it clear that the business sector is on the verge of ruin. Suggesting to the finance minister, he said that the sector will collapse in case of failure to provide tax and other incentives to them. His statement also spoke volumes. The time has come to give priority to the economy and business.

How many hotels were shut down during the pandemic?

Between 15-20 percent of small and medium-scale hotels have already shut down due to the crisis. Many others are watching the next moves of the government. Look at Thamel, almost all hotels are shut down. Many Chinese investors who invested their money in Thamel left Nepal. Those who are living in Nepal also are losing their confidence. How to revive the hotel industry when even some branded hotels are shut down? In the current situation, one has to lose huge money in the operation. It is better to shut down to avoid the accretive costs. It will reduce the loss.

What do you suggest?

This is a global problem and it needs to move all the parties together. The government, business community and the employees need to go together. We need each other’s support to revive our industry.

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