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Nepal Investment Summit 2017

Tourism

  • Sector Overview

  • Opportunities

Sector Overview

Nepal officially opened its door to tourists in 1951. The first Tourism Master Plan in 1972 showed the government’s commitment to developing this sector. The Government of Nepal and the private sector have been working together to develop tourism: the private sector has taken the operational lead and the government has introduced regulatory reforms and developed infrastructure. The Tourism Policy of 1995 aims to develop tourism as a priority sector in Nepal.

Tourism has grown considerable in Nepal in recent years. The number of tourists jumped from 380,000 in 2006 to about 800,000 in 2013. Recent data shows that more than two-thirds of tourists come for holidays, trekking expeditions, or pilgrimages. About a third of tourists are between the ages of 30–45 and about 20% are from India. The average length of stay for a tourist in Nepal is about 13 days. More tourists visit in March, October, and November than other months. 

The Nepal Tourism Board, the body responsible for promoting tourism in Nepal, has launched a plan, in which it aims to achieve an increase in annual international tourist arrivals to Nepal to 2 million by 2020, as well as employment in the tourism sector of one million.
 
There are currently 105 star hotels, 625 standard tourist hotels, and 226 homestay facilities. Out of the 105 star hotels, 8 are 5-star. Room occupancies in 5-star hotels generally hover between 40–80% during peak season. 

Eight out of the 10 highest mountains in the world are in Nepal. Nepal also has 20 protected areas, which cover 23% of its land area: 10 national parks, 3 wildlife reserves, 6 conservation areas, and 1 hunting area. Nepal’s land accounts for only 0.1% of the total land mass in the world; however, in terms of biodiversity, the country has about 2.8% of plants, 4% of mammals, and 3.72% of butterflies, as well as 8.9% of birds found globally. 

Although tourism is an important sector for Nepal’s overall development and has achieved higher growth rates than those achieved by the overall economy, it accounts for only about 2% of GDP. In 2012/13, the tourism sector earned approximately USD 400,000.

Opportunities

Hotels and restaurants

  • The Government of Nepal has been stimulating investment in tourism infrastructure. 
  • The impressive rate of growth in tourist arrivals, especially in the business travel category, coupled with the high occupancy rates for 5-star hotels in Nepal, signal opportunities for investment in this sector.
  • The Marriott International and Starwood Hotels and Resorts have initiated plans to build 5-star properties in Kathmandu. 
  • Plans to upgrade the current international airport are already underway, which would increase the tourist traffic significantly. 
  • The Nepali population has responded well to franchise restaurants like KFC, Pizza Hut, and Dominos; more opportunities for investment exist in developing themed restaurants serving specialty food.
  • The potential increase in the inflow of tourists will require more specialty restaurants to cater to their needs. 
  • The growth of hotel management institutes across the country means that there will be a steady supply of skilled manpower for this sector.
     

Adventure tourism

  • Nepal is an ideal destination for adventure tourism and adventure seekers can enjoy a number of outdoor activities ranging from paragliding to spotting Bengal tigers in the forests of Chitwan. 
  • Mountaineering, trekking, jungle safaris, mountain biking, bird watching, canoeing, rock climbing, white water rafting, canyoning, hot air ballooning, bungee jumping, and paragliding are some of the popular adventure tourism activities.
  • There is huge potential for the development of ski resorts in the Himalayan slopes. 
  • Indoor recreational activities are virtually non-existent, creating opportunities for investment in theme parks, water parks, amusement parks, skating rinks, bowling alleys, golf driving ranges, laser tag centres and the like.