Peace, NTY stimulate investment in hotels

Nine star-rated and 74 tourist-standard hotels opened in the country between 2010 and 2011 after the government announced the Nepal Tourism Year 2011 (NTY) campaign.

According to the Ministry of Tourism and Civil Aviation (MoTCA), the number of star-rated hotels in the country has reached 106 from 97 while the number of tourist-standard hotels rose to 721 from 647. MoTCA officials said that many new hotels and resorts across the country were operating without an appropriate license.

Government officials said that the level of investment being made in the hospitality sector was encouraging. Progress in the peace process and NTY have spurred investors to inject money in the hospitality sector, they added.

Shyam Lal Kakshapati, president of Hotel Association Nepal (HAN), said that improved tourist arrivals since mid-2009 had boosted the confidence of private sector investors. Since 2009, tourist arrivals in the country have been climbing by 20 percent per annum. “The private sector has realized that tourism could be a long-term industry if peace prevails, and this optimism is attracting more investors in the sector,” Kakshapati said.

Although there are 10 five-star hotels in the country, Kakshapati said that more such properties needed to come up, and that it would happen if the government became more flexible regarding its existing policy.

As developing five-star properties requires big money, the government should ensure the investment besides amending the existing Labour Act which has been a obstacle to growth of the hotel sector. Travel trade entrepreneurs said that the government should develop infrastructure in new destinations and encourage the private sector to invest there.

A number of luxury hotels have been established elsewhere in the country, mainly in Pokhara, Bhairahawa, Lumbini and Kanchanpur. The one million tourists targeted last year had prompted hoteliers to expand and upgrade their properties, they said.

The Implementing Expert Group (IEG) has opened the Airport Hotel at Sinamangal, Kathmandu. A four-star hotel the Siddhartha View opened in 2010 in Nepalgunj, a business hub in western Nepal. It was built with an investment of Rs 290 million. Another hotel in Nepalgunj, the Hotel Sneha, has been upgraded from one star to three stars.

The Hotel Kasai, a three-star property, has opened in Lumbini, one of the major destinations for Buddhist tourists. The Kasai Group of Japan has invested Rs 500 million in the 46-room hotel. Two more three-star hotels— Hotel Opera in Kanchanpur and Hotel Ratna in Biratnagar— have upgraded themselves to three-star category.

According to the ministry, there has been new momentum in registering resorts in the country. Three new resorts— Sukute Beach Adventure Camp in Sindhupalchok, Balthali Village Resort and Kinnari Resort in Kavrepalanchok— received their operating licenses in 2010.

Of late, the government has been planning to provide additional incentives including soft loans and interest exemptions, among other facilities, to the tourism sector. The freebies have been planned for both new investors and old players in the private sector that have been contributing to the country’s travel trade.

HOTELS IN NEPAL
Year    Star    Non-Star
2004    110    886
2005    110    896
2006    105    502
2007    105    512
2008    96    573
2009    97    647
2010    103    686
2011    106    721

(Source: MoTCA)
 

source: The Himalayan Times, 15 April 2012