“Survive 2020, revive in 2021 and thrive in 2022”

Photo: KUNDA DIXIT

2020 is not our year. It isn’t anyone’s year.

The spread of the novel coronavirus has brought the world to a standstill. Airlines have grounded their entire fleets. Like other countries whose economies depend in large measure on tourism, Nepal has been badly hit.

Ironically, 2020 was supposed to be Visit Nepal Year, and the Nepal Tourism Board had spent millions of dollars on promotion to attract 2 million tourists this year. But trekking and mountaineering expeditions were called off in mid-March at the height of the spring climbing season, domestic and international flights have been stopped at least till 27 April and that is likely to be extended till end-May.

“2020 is a write-off,” says Raj Tamang of Responsible Adventures who was promoting his business in Europe when the epidemic hit Italy, got back on one of the last flights, and has been in self-quarantine since. “It will take at least one year for Nepal to recover.”

Some airlines are hoping to restart flights over the summer by not selling middle seats to maintain physical distancing, but prices will be much higher than usual. Nepali travel groups expect high-end trekkers to trickle back in the autumn because they already see Nepal as an adventure destination, and they are more used to risks.

“We will also have to reorient our promotion to regional markets like India and China as well as encourage Nepalis to travel more within Nepal,” says Tamang.

As with all other countries, the government has had to find a balance between protecting public health and keeping the economy afloat. The collapse of tourism and remittances from Nepali migrant workers overseas has wrecked the economy, with the World Bank lowering Nepal’s economic growth forecast from 7.1% to 1.5-2.8% this fiscal year.

There are at least 1 million Nepalis that depend on tourism, and the sector makes up nearly 8% of the GDP. The hardest hit are porters and guides who depend on seasonal income during the spring and autumn seasons, employees in the service industry, as well as Nepal’s hotels and restaurant owners who have invested with bank loans.

“We were just gearing up to a healthy spring season, but everything looks dim and empty now,” says a despondent Mingma Sherpa of Seven Summits, that handles expeditions to Mt Everest.

The former CEO of Nepal Tourism Board, Deepak Raj Joshi predicts that Nepal’s civil aviation, trekking and hospitality industry could lose overall  Rs160 billion this year, of which hotels and resorts stand to lose Rs85 billion, trekking, mountaineering and adventure tourism losses will top Rs55 billion. Domestic airlines will lose Rs5 billion, restaurants and bars up to Rs5 billion.

At this time of year, big hotels in Kathmandu, Pokhara and Chitwan would have occupancies of 80% or more, and it would be difficult to get seats on flights. Now, the business owners have to bear the cost of paying salaries and keeping their companies running.

“The entire hospitality industry is in deep depression,” says Shreejana Rana, president of the Hotel Association of Nepal and executive director of Hotel Annapurna, adding that many new hotels have huge loan exposure as well as having to pay operating costs of empty businesses.

The HAN is currently working on four areas: survival and revival of the industry, helping citizens, ensuring food supply,  and looking for revenue to address employee issues. 

“In terms of supplies, I think the government has done a fair job so far, but we have to pay employees on humanitarian grounds at a time when there is no revenue. April is going to be problematic in terms of salary payments and we are looking for a solution,” Rana added. The HAN proposed to pay employees 50% of their monthly salary on 20 April.

Domestic airlines have also been hit by the grounding of all aircraft, and they have also lost the dollar tariff on foreigners that used to partly subsidise domestic passengers. Buddha Air is set to announce a calibrated pay cut for employees depending on seniority, and Yeti Airlines is still discussing financial issues in the board.  

Photo: BIKRAM RAI

“COVID-19 is the crisis of the century, the global tourism and aviation industries will have a hard time,” Buddha Air’s Birendra Basnet told Nepali Times. “But we have been around for 20 years and the underlying philosophy of our company is to provide a platform for employee benefits. We understand the crisis, and are trying to take it as a challenge to prepare for new opportunities into the future, and rely on increasing the volume of domestic travel.”

Evoke restaurant in Jhamsikhel has a deserted look, and its Pokhara outlet is also empty. Many events at the venue have been cancelled, and owner Sushant Thapa says there is no option but to ride out the crisis, and everyone is in the same boat. Plans to open a third outlet in Lazimpat are shelved.

For Deepak Raj Joshi formerly of the Nepal Tourism Board, the only option is to hunker down, consolidate, cut costs and plan for the future. The government can help ease the pain by waiving customs and income tax, and also announce a rebate on bank loans.

“Sooner or later, the pandemic will be controlled, and we have to plan so that in 2020 we survive, in 2021 we revive, and in 2022 we thrive.”

With additional reporting by Raju Banskota

Read also:  Nepal prepares for economic fallout of pandemic, Kaustubh Dhital

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