The Government needs to recognize hotels as industry

Binayak Shah has been unanimously elected as the 14th President of Hotel Association Nepal (HAN) recently. The annual general meeting of the association has elected a new working committee led by Shah for the next two years. While he was being elected as the HAN president, the hotel sector, which was severely affected by the corona epidemic, could not return to normal. Here are some excerpts from a conversation between journalist Krishna Adhikari and President Shah on the current situation of the hotel industry and tourism as a whole. In this encounter Shah has focused on the current problems of the hotel sector which is in the stage of revival, the role of various stakeholders to resolve them and the measures to be taken for the development of the tourism sector in Nepal.

The Nepal Weekly: As the newly elected president of Hotel Association of Nepal (HAN), what are your plans for the revival of the hotel sector?

President Shah: My first duty is to take the 57 years long history of Hotel Association Nepal (HAN) to a greater height. In the HAN’s statute, the purpose of the organization is to strengthen the business of members across the country and to take initiatives to solve their problems, so we will do our job accordingly. I will try my best to solve the problems surfaced in the hotel sector. Besides that, I will try my best to recognize the hotel sector as a national industry. Till now the hotel is regarded as a service sector. As the government is currently engaged in preparing for the next year’s budget we are effortful so as to ensure that our demands are addressed in the upcoming budget.

TNW: What  do you think should be done to increase the inflow of foreign tourists into Nepal?

Shah: We are located between two giant neighbours like India and China with the combined population of more than 2.5 billion. Nearly 200 million Chinese and 100 million Indians visit foreign countries every year. Even if we can bring only five percent of them to Nepal, the number will be three million, which is more than sufficient for us. We should be able to develop packages to increase the number of foreign visitors. At present the temperature in most parts of India is over 40 degrees Celsius. Many schools and colleges have been closed at this moment. They want to come directly to Nepal, but due to the high cost of Delhi-Kathmandu air fare, Indians desirous to visit on vacation have turned to Singapore instead of the Himalayan nation. Nepal is well known for its excellent climate, flora and fauna, there is no problem of Covid and other conditions are also normal, which is favourable for attracting a large number of international visitors. But if Nepal government spreads positive message saying that the country has returned to normal and it is prepared to welcome tourists both from India, there is a possibility that tourists will come twice in number as we are receiving now. Similarly, a large number of tourists can be brought from China, but we do not have enough connectivity for that. China has only five flights a week. Chinese tourists cannot be brought in until connectivity can be increased. Now we should be able to introduce attractive packages to increase the inflow of tourists.

TNW: How do you see the role of the private sector in increasing tourist arrivals?

17 to 18 billion rupees have been invested in the hotel as much as the government’s annual budget.  Number of five-star hotels have reached 20. 17 of them are in operation and 20 five-star hotels are being added by 2024, nine of them are in preparation. In the year 2022, about six lakh tourists have come. But the capacity of the hotel is for 3.5 million tourists. In such a situation, even though domestic tourists have increased, hotels have not been able to earn income. It also feels that there is not enough marketing from the government mechanism. For this, the government can also work together with the private sector. It is necessary for the government to cooperate with the stakeholders and the private sector for the development of the tourism sector.

TNW: Has the government not paid proper attention to this?

Shah: NO, the government has not been able to pay attention to the necessary infrastructure to increase the number of tourists. Even today, when the impact of the Corona epidemic is minimal, the tourism of the world has not fully recovered. There was no idea of what kind of economic policy the country would have after Covid. A national plan or program could not come up because of political wrangling. It is necessary to promote Nepal as a best adventure destination. Another thing, the Tourism Act of Nepal made in 2035 has not been amended even now. The law brought in the context of that time cannot cover the current issues. When the country has gone to nationalism, it is necessary to change the law accordingly. Since the provincial governments also consider the tourism sector as an area of economic prosperity, they should make policies to attract investment for the development of the tourism sector.

TNW: The government has come up with a plan to celebrate the Nepal Visit Decade, what is your suggestion in this regard?

Shah: The government has come up with a plan to celebrate the year 2023-2033 as Nepal Visit Decade. It is planned to bring 3.5 million tourists by 2033. The government should be able to convey the message that Nepal is a safe destination for tourism in terms of bringing foreign tourists. Even today, not only hotels, but also airlines, travel trekking agencies are all working in their own way. It is not possible to combine it at the national level. If there is coordination at the national level, a lot of work can be done. In order to increase tourists in Nepal, it is necessary to hold two to three international mega events in the next two to three years. If Nepal Adventure is to be promoted as a good destination, two to three years are needed for preparation. If the work is to start from 2023, the work can be done till 2025. For this, the government has to address this area through the next year’s budget.

 TNW: Billions of rupees have been invested in the hotel sector. It is said that most hoteliers are affected by bank loans. What should be done to solve this problem?

 Shah: Due to the corona epidemic, after three years of tourists not coming, the hotel rooms became empty, and due to lack of income, the principal and interest of the loan taken from the bank was not able to be paid. Until the last fiscal year, the government tried to address it through monetary policy, but since the current fiscal year, it has not done that either. Therefore, we have submitted our problems to the government to solve the current problem. Adding one year to the current loan tenure will provide a lot of relief. When Bishnu Paudel was the Minister of Finance, the tourism sector was recognized as an industry for one year in the budget brought through an ordinance. It brought great relief to the hotel sector. But the government formed after that did not continue it. Due to lack of recognition of the industry, hotels have not got the facilities that other industries have today.