Expert Speak: Hospitality Industry | Nepal Economic Forum

Mr. Pralhad Raj Kunwar
CEO, Hotel Himalaya

With divine and rich natural beauty, cultural heritage, history and religion, Nepal is considered as one of the most beautiful countries to visit. Because of this reason, tourism is one of the most important sources of foreign currency in Nepal. This also shows that the hospitality industry is one of the most booming industries in the country.

With Visit Nepal Year 2020 campaign at the doors at the beginning of the
year 2020, tremendous opportunities and positive changes were expected.
However, even in the tourist season, the hotel industry has turned upside down
due to the Covid-19 pandemic hovering above the country and worldwide.

To understand how the hotel industries are doing amidst the pandemic, NEF spoke to Mr. Pralhad Raj Kunwar, the CEO of Hotel Himalaya and prepared a brief excerpt as below.

Impact of Covid-19 pandemic and the lockdown on your business and hospitality industry

Hotel Himalaya, conveniently located 8 km away from Tribhuvan International Airport and only 2 km from the Kathmandu city centre, provides a perfect place for the guests to rest, work or socialize and enjoy the Nepalese hospitality. However, with international and domestic travel badly affected by the coronavirus outbreak, Hotel Himalaya has remained closed from 1 April 2020 and will remain closed until the business viability is seen to achieve a break-even point.

Amidst the outbreak, the occupancy rates of the hotel industry throughout the country have decreased drastically and hotels have shut down, which is why tourism will be the worst hit sector. In regards to this, Hotel Himalaya’s philosophy is about surviving until year end and then concentrating on revival thereafter.

Currently, the only international airport, Tribhuvan International Airport, has remained shut and all travels have been banned. Even after the opening of the airport, Hotel Himalaya stressed that the business will not flow instantly. Nothing will flow from Europe and America since travel agents have not made any brochure for this year. Travellers themselves might be taking precautionary measures to avoid overseas travel as well. Some low budget tourists may flow from China and India after a few months provided the airlines offer discounted tariff. Thus, for the survival and revival of this sector, the government needs to provide waive-offs, subsidiary and discounts.

Moreover, since payroll is the highest expense in the hotel industry, the old hotels will suffer the most. As it is currently, Kathmandu has surplus hotels. The competition will, thus, be fierce in future. Some hotels may even close down like it did during the Maoist insurgency period. With all of these hitting the industry to its worst, tourism will take time to bounce back unlike other manufacturing industries and factories. Given this, Mr. Kunwar believes that there are huge challenges to overcome yet very little opportunities for the industry until the end of 2022.

Key areas to be addressed after the lockdown

To address and take benefits of the opportunities that exist, international seminars, meetings, conferences, exhibitions if promoted can enhance the room and F&B business. For this, the government should not put restrictions on the number of attendees for social functions as it is one of the biggest sources of earnings for hotels.

Hotels are already cheap in Nepal but airfare is making the destination expensive. Thus, considering this, the government should not charge landing fee, airport tax and provide subsidy on aviation fuel in order to attract international tourists.

When all of these will be considered, the revival of the hotel industry can be expected post Covid-19 pandemic.

The above Expert Speak edition is based on the conversation with Mr. Pralhad Raj Kunwar. He is the CEO of Hotel Himalaya.

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