Nepal tourism may take 5 years to recover

Nepal’s tourism sector has hit rock bottom this year due to the Covid-19 crisis, and it will take at least five years to fully recover, according to hotel owners, airline executives and trekking agencies.

Taking part in a webinar on Monday, they said most companies are facing collapse, and even if visitor numbers started picking up next year the industry will have to confront new realities in global travel, with major changes in customer concerns and preferences.

“The age of mass tourism is gone,” said Prachanda Man Shrestha, former CEO of Nepal Tourism Board. “Tourists will now prefer niche products with specific personalised preferences. And Nepal’s promotional activities have to adapt accordingly.”

Although Nepal is still a valuable tourism brand, with mountains, wildlife and culture being the main draws, the emphasis from now will be on safety and comfort, a unique travel experience, and wilderness tourism.

“People are not going to be too fond of roughing it out anymore, they will want to minimise risk to themselves and will be demanding a level of wellbeing and predictability at the destination,” added Shrestha at the webinar organised by the Society of Economic Journalists of Nepal (SEJON). “The good news is that 2020 has been such a bad year that there is nowhere to go but up.”

Participants at the online discussion agreed that while Nepal recovered fairly quickly from the 2015 earthquake, this time it was going to be much more difficult because holiday patterns will change after the pandemic.

“It is going to take four to five years for tourism to get back to normal in Nepal, there is just so much uncertainty that I do not see any positive trends till 2025,” said Yogendra Shakya of Ambassador Hotel and Club Himalaya in Nagarkot.

Shakya said the government would have to work much more closely with the private sector to plan a strategy to revive visitor numbers. He says it is more important than ever before to remove the negative image that Nepal has got in recent years from the poor state of Kathmandu airport, crumbling highways and urban pollution.

Nepal may also need to look to its neighbours for tourism since many people will not want to fly long distances because of the danger of infection. In that, Nepal is well placed to tap India's pilgrim market, and the growth in outbound Chinese travellers.

Other webinar participants said they had laid off staff, and were too busy trying to keep afloat to think about a future strategy. But they agreed that the government, Nepal Tourism Board and the private sector needed to use the pandemic period to strategise about “a better normal” in tourism.

Deepak Raj Joshi, formerly of the Nepal Tourism Board, says the government needs to help investors in the tourism sector with tax waivers and rescheduling bank loans. “We have to plan to survive in 2020, revive in 2021 and thrive in 2022.”

Nepal’s hotels have been very badly hit, with business almost down to zero. Most employees have taken salary cuts and 25% have been laid off.

With more than $700 million in annual earnings, tourism makes up an equivalent of 8% of Nepal’s GDP. It employs 500,000 people directly just in trekking and mountaineering, with 2 million others benefiting from tourism indirectly.

In 2019, 15% of the 1.2 million tourists went trekking or mountaineering in Nepal. Many support staff, guides and porters have been unemployed since the spring season. The Ministry of Tourism says Nepal will lose 70% of the revenue from tourism this year, and the situation may persist till spring 2021.