Hopes On Hospitality

Mobilising domestic and foreign investment is crucial for building vital infrastructure, creating jobs and collecting targeted amount of revenue. The flow of foreign direct investment is necessary to give impetus to the economy. Currently, Nepal’s economy is on the recovery path from long recession caused by the COVID-19 pandemic. Trade deficit, inflation, low capital spending, and poor foreign direct investment and revenue collection are still affecting the economy. It is necessary to replace the import-based economy by investing in small and medium sized enterprises and agriculture sector. 

With unique natural beauty, rich cultural heritage, diverse climatic zones and affordable accommodations, Nepal holds a huge potential for the development of tourism sector that is also important source of foreign currency earning. Scores of snowy mountains, including the world’s tallest peak Sagarmatha (Mt. Everest) have made the country an exciting destination for trekking and mountaineering. It also hosts the offices of regional and internal agencies, with many international events. Located between the two giant neighbours, it has gained geopolitical traction. These factors have made Nepal the favourable choice for foreign visitors. 

These positive elements may be a reason why hospitality business is thriving in Nepal in recent years. With growing investment in the sector, five-star hotels are opening in major cities such as Kathmandu, Pokhara and Lumbini, catering quality services and facilities to the domestic and foreign tourists, according to a news report of this daily. They offer world-class conveniences, such as luxurious rooms, fine dining, spas, meeting and event spaces, and rooftop bars, which attract both high-end travellers and corporate clients. More than a dozen luxurious hotels, including four-star and five-star ones, have come into operation in a year. More than Rs. 19 billion was invested to set up these hotels.

 In addition to them, about 23 five-star hotel have been running in different parts of the country. There are approximately 10,000 hotels across the country that include budget accommodations and luxury resorts. They can accommodate 3. 5 million tourists annually but they are operating at around 33 per cent occupancy currently. The rising number of star hotels under construction and in operation shows that tourism in Nepal is moving forward with brighter prospects, drawing more and more investors to this sector. Investment environment has improved specially after the pandemic. At the same time, there is low risk of investment in tourism compared to other areas. 

Provincial governments have also accorded due priority to tourism, promoting the business people to invest in the hospitality sector. Similarly, the newly built Gautam Buddha International Airport in Bhairahawa and Pokhara Regional International Airport in Pokhara have also boosted the capacity of accommodating tourists in the country. About one million tourists entered Nepal during the first 11 months of 2024. Last year, around 918,000 tourists came to Nepal in the first 11 months of 2023. However, the Nepal Tourism Board at the start of this year had set a target of bringing in around 1.32 million tourists this year. 

It is estimated that around 200 million Chinese and 100 million Indians travel abroad yearly. If the government and private sector work in tandem to introduce measures to lure just two per cent of tourists from these countries, the tourism sector could make significant strides. The Nepal Tourism Board is set to announce Tourism Decade 2025-34, targeting to fetch around 3.5 million tourists yearly.  The tourism sector is currently employing more than 1 million people. With increasing investment in the hospitality industry, the national economy and employment will receive a new fillip.