KATHMANDU: The government has identified energy, tourism, agriculture, and information technology as priority sectors for Nepal’s development and prosperity. However, experts argue that the massive investments in tourism, exceeding Rs 1.8 trillion, are under threat due to mismanagement and underutilization of key infrastructure, such as airports.
During a policy discussion jointly organized by the Institute for Strategic and Socio-Economic Research (ISSR) and Khabarhub on “Banking and Financial Concerns: Hydropower, Agriculture, and Tourism,” stakeholders criticized the state’s indifference toward tourism development, which has jeopardized significant investments.
Nepal Hotel Association President Binayak Shah stated that the country has 116,000 hotel rooms, sufficient to accommodate the same number of tourists daily. However, Nepal struggles to attract even a minimal number of tourists.
“Besides Tribhuvan International Airport, two other international airports were expected to bring in more tourists, leading domestic and foreign investors to open hotels. However, since these airports are not operational at full capacity, many hotels are facing financial difficulties, with some on the verge of liquidation,” Shah said.
Tourist arrivals and challenges
According to the Nepal Tourism Board, 1,147,567 foreign tourists visited Nepal in 2024. Despite this, hotels targeting operations around Pokhara and Bhairahawa International Airports have failed to thrive.
Shah emphasized that the blame for this crisis does not rest solely on hotel operators. “Hotels in Bhairahawa are struggling because the airport itself isn’t functional. Can we hold only the businesspeople responsible for this? Doesn’t the state share any accountability?” he questioned.
He added that poor transportation infrastructure further exacerbates the problem, citing the 10-12 hours required to travel the 200 km road from Kathmandu to Pokhara.
Additionally, he stated that due to the rising operational costs of older hotels, some large hotels have recently reached the point of potential closure. He urged the government and the banking sector to address this issue.
“With international-standard infrastructure, Nepal’s tourism industry could serve up to 3.5 million tourists annually. If airports and roads were improved, private sector initiatives could double the tourist numbers within 1-2 years,” Shah claimed.
Soaring costs and land scarcity
Soaring land prices in urban and semi-urban areas have created additional challenges for investors. Over the last two decades, land values have doubled or tripled, making it difficult for entrepreneurs to develop tourism-focused facilities like hotels.
Former Trekking Agencies Association of Nepal (TAAN) President Jyoti Adhikari highlighted that inflated land prices prevent businesses from expanding or meeting infrastructure demands. “Land in Thamel costs NPR 40-50 million per anna. How can hotels expand or add facilities like swimming pools under such conditions?” Adhikari asked.
He called for government intervention, suggesting that the state acquire land to create an investment-friendly environment for entrepreneurs.
Promotion and diversification
Banker and entrepreneur Pawan Golyan criticized Nepal’s lack of international promotion for its tourism potential, especially regarding Hindu pilgrimage sites and Lumbini, the birthplace of Gautam Buddha. He also stressed the untapped opportunities in agro-tourism and eco-tourism, urging the government to focus on diversifying tourism development initiatives.
Without immediate action from the government, industry stakeholders fear Nepal’s tourism sector will continue to underperform, risking the livelihoods of thousands and the country’s economic potential.
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