The Nepal Weekly 
March 28, 2023
Hotel Association of Nepal (HAN) stated that hotel industry in Nepal has been badly hit by hiked interest rate on loans taken from commercial banks and financial institutions. The banks are calling them for immediate payments of principal and interests, member hotels from across the country have informed the HAN.
HAN had repeatedly approached the policy makers at the Government of Nepal, related governmental agencies, Nepal Rastra Bank for amicable solutions. The association also had organised meetings, submitted memorandums but not any fruitful results come out so far.
The association states that the borrowers are liable for settle of principal and interest, but the coronavirus pandemic situation paralysed the industry for nearly 3 years by lockdowns and health protocols. That control mechanisms were imposed by the government, so that the government has to consider and manage to relief the industry through monetary policy and fiscal policies. Thus, the state is pushing the industry to a disable condition.
In the current situation, the hotels are not even earning to bear operational expenses and running at loss. Moreover, new hotels are entering to the limited market made existing ones to bring tariff down.The investment is extensively larger but the hotels are not given status of ‘industry’ so far, the press release argues.
Thus, HAN demand with the government that hotel industry should be relieved by extending time for reconstituting loan policies and rescheduling of repayment. The association also strongly demand to limit the interest rate at a single digit.
Moreover, regain the revenue capacity, the government mechanism should support tourism industry to revive by enhancement of airport services, highway management, promotion activities in the international markets are essential but it may take as long as year 2025. The Government of Nepal, related governmental agencies, Nepal Rastra Bank, commercial banks if not consider in the real situation of hotel industry, this will collapse one by one soon. As such, the industry may have only option to close down.
President of HAN Shreejana Rana, in addition, said that the data revealed by the government sources say that tourist arrival has increased to 614,000 in the year 2022 which certainly increased in number in comparison to the year 2019. But that is not good number for individual hotelier to get benefit.
“The industry is recovering, but the government thinks the tourism industry is fine, that everything is in order. But actually it is not so.” Rana informed.
HAN has informed that there are 2,000 hotels across the country as its members. They altogether have 10,000 room nights of which only 25% have been sold. The latest scenario illustrates that nearly 20 per cent of small and medium-sized hotels have closed.
Tourism is Nepal’s fourth largest industry from the point of view of employment creations. This was stated in a study conducted in 2021.The study on tourism released by the Central Bureau of Statistics then showed that Nepal’s tourism industry provides 371,140 jobs.
The largest industry by employment is wholesale and retail trade which accounts for 30.6 per cent of the total employment in the country, followed by education with 15.9 per cent and manufacturing with 15.8 per cent, as the report says.
The report further says that Bagmati Province, which includes the Kathmandu Valley, accounts for the largest number of tourism personnel in the country, 161,674 persons or 43.6 per cent.
The development of hotels has been seen to have started after 1950 AD with the dawn of democracy. Foreign tourists were officially allowed to enter Nepal after democracy, which led to the growth and development of hotels. In Nepal, the concept of hotels was developed around 65 years ago with the opening of “Himalayan Inn” and “Paras Inn” on the new road in 1950 and 1951 AD. Thus, these hotels are considered the first hotels in Nepal. But the actual development of the hotel took place only after the establishment of a hotel called the “Royal Hotel” at Kantpath by a Russian chef, BooritchLissanevitch. It was the first international standard hotel, which was established in 1954 AD. Similarly, other hotels have also started to come into existence with the increase in tourist arrivals. To meet tourist demand, the hoteliers decided to build standard hotels. As a consequence, Mr. Ram Shankar Shrestha opened a hotel called “Hotel Shankar” at Lazimpat, Kathmandu, at the old Rana Palace. This hotel was the first four-star rated hotel in Nepal.
Similarly, in the year of 1965 AD, Hotel Del Annapurna came into operation, which was the first five-star hotel in Nepal, which was formed under the management of “The Taj Hotel”. In 1966 AD, the hotel Soaltee was established, which was under the management of the Oberoi group of hotels, called Soaltee Oberoi. It was established as a deluxe five-star hotel. Likewise, six years later, in 1973 AD, another five-star hotel was established called “Hotel Yak and Yeti”.
To promote tourism activities, the “Nepal Tourism Committee” was constituted in 1970 AD. The Nepal Tourism Master Plan, developed in 1972, was the basis for developing the tourism sector. In 1966, NATTA (Nepal Association of Tour and Travel Agents) was established by a group of travel agents. HAN was established in 1966.
