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Hospitality Industry in Federated Nepal

With the successful completion of local, provincial and federal elections in the country, many positive developments are expected in the hospitality sector in the coming days.

Considering the data on the status of hotels since 2012, the rising influx of tourists in the country has resulted in a substantial demand for hotels as shown in the table below:

Source: Department of Tourism, NepalNote: The time period is taken from January to December

Likewise, the number of homestays have increased by more than double since the year 2012.

Note: The total homestays figure includes both private and community homestays

Source: Department of Tourism, Nepal

With the increment in the number of tourists, many global hotels have been considering the Nepali market. In this context, a number of hotel chains including Aloft by Marriott Starwood, Doubletree Hilton by Hilton Hotels and Resorts, Sheraton by Marriott Starwood and Holiday Inn by InterContinental Hotels Group have already signed management contracts with Nepali entrepreneurs.

Most of the good hotels in Nepal are clustered in Kathmandu, Chitwan and Pokhara. However, other highly potential tourism destinations lack good hotels mainly due to the absence of proper tourism infrastructure, transport facilities and road networks. As the country has achieved its political aspiration, no colorless phraseologies should stand against the development of infrastructure. The provinces should focus on revamping their infrastructure by utilizing allocated budgets and competing against each other.

Besides competing for infrastructure and road development, federal structure will allow each provinces to highlight and promote their respective tourist destinations. For instance, with the federal structure in place, province 6 is likely to promote Dolpo region as a major tourist destination. Additionally, budgets are expected to be utilized accordingly for the development of tourism infrastructures and road networks. Apart from revamping infrastructure, development of hospitality sector will also depend on the policies endorsed by the new government in support of the promotion of hospitality sector.

The advent of federalism in Nepal will bring about a plethora of positive changes in each of the provinces ranging from the development of tourism infrastructures to the promotion of Foreign Direct Investments.

Evleen Shakya
Evleen is a MBA graduate from Ace Institute of Management with a major in Finance. She is currently involved in the management consulting division at beed and Nepal Economic Forum.
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