Is Nepal turning to a cheap destination?

A majestic view of Upper Mustang in Nepal. The place is well-known for its ancient artifacts and culture. Photo: File photo
A majestic view of Upper Mustang in Nepal. The place is well-known for its ancient artifacts and culture. Photo: File photo

KATHMANDU, Nepal- The tourist arrivals to Nepal have seen marked growth since the end of the decade long civil war in 2006.

However, the decrease in the per day per tourists’ spending and their length of stay is cause for concern as it indicates that Nepal could be on the way to becoming a cheap mass destination.

According to official figures, the spending of foreign visitors to Nepal has slumped steadily over the past decade.

Income from foreign tourists per day is estimated to have fallen to USD 35.60 in 2012, the lowest yearly figure since 2003, which stood at USD 79.10, according to Ministry of Culture, Tourism and Civil Aviation (MoTCA). The average income per visitor per day is calculated at the exchange rate of Rs 85.5 per USD one.

This translates to the foreign visitors now spending approximately 55 per cent less per day on tourism linked services than they did 10 years ago. The spending figures are in sharp contrast to the tourist arrivals into the country. In 2003, the total number of tourists’ arrival via land and air was 338,132.

In the year 2012, the numbers had almost tripled and stood at 803,092. In 1996, when just 393,613 tourists visited Nepal, they used to spend USD 31.9 per day on an average.
However, tourism entrepreneurs are skeptical about the statistics and deem it misleading and unnatural.

“Compared to 2003, the price has been hiked in every sector, be it in hotel, air tickets and other tourism related activities. The statistics of MoTCA seems to be `unauthentic’ as it seems to have disregarded inflation in every sector,“ says Pavitra Kumar Karki, president of Nepal Association of Tour and Travel Agents.

According to Karki, the mode of transaction has also changed. “Earlier, tourists could only make their payments through cash, but with the facilities of online payment and other various transaction facilities, hard cash may not be changing hands. However, this doesn’t mean that the spending has gone down,” he argues.

Echoing similar concerns about MoTCA data, Yogendra Shakya, coordinator of Nepal Tourism Year 2011, says, “The hotels have been reporting good occupancy and the costs of tourism related facilities and services have also become dearer. So, the data seems to be inaccurate, since the number of tourists coming in has grown significantly.”

A Nepal Rastra Bank official, under the terms of anonymity, revealed that the bank is also looking into the matter and review ing the study as the drastic fall in income generation from tourists.

On the other hand, Aditya Baral, spokesperson of Nepal Tourism Board, explains that a couple of factors are responsible for the reduction in tourists spending and the length of the stay. He says, “In the past, private players used to under invoice their services, which automatically pulled down the spending amount of the tourists. Similarly, global players are keeping a certain per cent of the profits outside Nepal, thus bringing in only the `necessary’ portion under such transactions.” While Baral states that tourism entrepreneurs are at the mercy of suppliers, he is hopeful private players will be more stringent in quoting the price for their services.

He says, “Private players are finally putting their foot down and charging visitors according to their standards and services. This system will definitely have a positive impact on the spending of tourists and the result of price acknowledgment will be seen in the coming years.”

A beautiful view of mountains and their reflections in the Lake in Pokhara, a famous tourist destination in the country. Photo: File photo
A beautiful view of mountains and their reflections in the Lake in Pokhara, a famous tourist destination in the country. Photo: File photo

According to The Travel and Tourism Competitiveness Report 2013 published by the World Economic Forum, Nepal ranked at the 112th spot -far below India and Sri Lanka, which grabbed 65th and 74th positions respectively. The report ranks selected nations according to the Travel and Tourism Competitiveness Index, which scores from one to six the performance of a given country in each specific sub-index.

The overall index is made of three main sub-indexes: regulatory framework; business environment and infrastructure; and human, cultural, and natural resources.

Lamenting the lack of effective marketing, Megh Ale, tourism entrepreneur, adds, “Throughout the year, our focus is only on traditional marketing, we lack innovation and any significant steps in branding Nepal as a must visit destination to attract quality tourists.“ He also claims that it is rather unfortunate that we have no new packages to offer for second time visitors.

On this, Baral alleges that both the private sector and the government are not really enthused to explore the new products and formulate effective programmes in the current situation. “It all comes down to the financial aspects of such steps and budget crunch,“ he explains.

Rich in geographical and cultural diversity, Nepal is also one of the top 25 least restrictive destinations. Yet, most foreigners who choose to visit the country are budget tourists. Shakya says, “Nepal lacks recreational activities such as theme parks and other attractions, which is necessary to lure in Asian tourists.“

Adding to it, Ranjan Krishna Aryal, joint secretary at MoTCA says, “There is also a dearth of vision and clear state policy whether on adopting mass or eco tourism. And the tourism sector is not a priority sector for the government”. According to Aryal, to really attract quality tourists, there is no other option than to identify new resources, build infrastructure and finally market the products in collaboration with international tour operators.

Talking about the branding of Nepal as a major tourists destination, according to Nepal Tourism Board, the slogan `Naturally Nepal’, which was formulated in 2006, is doing well in the international market. Baral says, “Naturally Nepal as a brand is giving quite good returns. Since a brand has its lifespan, we are testing how successful it was and will be within two years.

Based on the review, we will either fine-tune it or scrap it”. According to him, it is unfeasible to expect `high value’ tourists right away, when the country has till now only focused on the volume.

But Aryal argues that effective marketing is a crucial factor in attracting quality tourists. “Budget tourists had and will continue to pour in even if we don’t have any marketing, so our current strategies need to be reworked for any concrete results,“ he asserts. Stating that unless there is political stability, a strong national carrier, flexible civil aviation policy, proper infrastructure and concrete long-term vision, there will be no real change in the tourism sector, Ale says, “International carriers are bringing in tourists and they will operate only when they are in profit. And in the peak tourist season airlines hike their fares which will have a negative impact on tourists’ arrival in the country.

Echoing similar concerns, Baral adds, “The triggering effect is Civil Aviation Policy. Once it is flexible and adopts open sky policy, it will be easier to tap the untapped market.“ (-with inputs from the Himalayan Times)


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