Increased tourist arrivals push NTB's budget up to Rs 616m

Nepal Tourism Board’s (NTB) projected budget for this fiscal year has jumped 59 percent to Rs 616 million as a result of surging tourist arrivals. The country has been seeing a continued growth in the number of tourists for the last three years.

The budget for the last fiscal year was Rs 388 million. NTB generates most of its resources from fees collected from tourists. Although, NTB has been mandated to spend its revenues to promote Nepal in the global arenas, travel trade entrepreneurs say it has not been able to fully utilise its resources. Around 40-45 percent of NTB’s annual budget is spent in promotional activities.

The healthy revenue growth has given NTB ample opportunity to formulate an effective marketing strategy and carry out other necessary work to lure more tourists. But travel trade market watchers and even top NTB officials doubt whether the resources would be utilised fully as it is not sure when the NTN board would endorse the proposed budget.

The NTB board has been unable to endorse a full budget due to its internal problems. It has however spent one-third budget. NTB officials and the travel trade entrepreneurs said the ongoing power tussle among NTB board members has been affecting all promotional activities.

Dhurba Narayan Shrestha, a board member representing the private sector, admitted internal problems on the board has affected timely budget endorsement. He, however, expressed hope that the board would soon call its meeting to pass the budget. However, given the present scenario on the NTB board, top officials doubt about the attendance of all board members in the meeting to endorse the budget.

On the top of that, NTB has been without a chief executive for more than a year, and it looks nowhere near getting one soon.

According to the board, last fiscal year, more than Rs 170 million was spent for international promotional activities. And, the budget for the purpose for this fiscal year has been proposed Rs 250 million.

Arjun Prasad Sharma, immediate past president of Nepal Association of Tour and Travel Agents, said the delay in appointing a chief executive, internal problems on the board and political interference, among other issues, have restricted NTB to hold effective campaigns to attract tourists.

“As NTB has been promoting in conventional markets such as India and others for the last few years, its efforts in exploring new market hasn’t been effective,” Sharma said. “Moreover, problems on the board for the last year have made the promotional body more static.”

Tourist movement has increased significantly over the last two years, but volume what can be termed as ‘mass tourism’ failed to increase the country’s revenue. Nepal Tourism Year (NTY) last year may have brought a record number of tourists, but their average per day spending dropped to a 10-year low.

Arrivals reached an all-time high of 735,965 in 2011, up 22.1 percent compared to 2010. But average spending by tourists dropped to $39.90 last year against $43.20 in 2010, according to government statistics. Tourist numbers are projected to touch 800,000 this year.

“The numbers are adequate. And now, it’s time to attract high-end visitors rather than pouring money into the mass tourism segment,” Sharma said, adding NTB should now develop an effective strategy to go beyond its traditional markets.

At present, NTB has been focused on Indian and Chinese markets. “Visitors from different parts of the world are willing to come here, but there are no promotions as well as flight connectivity,” added Sharma.

Aditya Baral, spokesperson for NTB, said they more focused on the two neighbouring markets as they are responsive and consistent. He said they have been conducting promotional activities in other areas, but irregularly. Some NTB officials said a delayed budget was the major reason that forced NTB to stick to the conventional markets. “NTB’s revenue has increased substantially and is projected to increase more if our plan to collect Rs 1,000 is materialised,” Baral said. 

NTB gets Rs 500 per tourists coming via air. “The plan to double the fee is under consideration on the NTB board,” Baral said, adding the Finance Ministry already gave its go-ahead for doubling the fee.

Of the total income, NTB has projected collecting Rs 375 million from tourists. Similarly, Rs 149 million has been raised from distribution of the Trekkers Information Management System card and Rs 17 million was raised from travel trade participation fee.

source: The Kathmandu post,9 Dec 2012