A country that sells itself, poorly

Nepal's travel-traders seem to know how to run every sector of tourism into the ground.

The two biggest problems of Nepali tourism are over-supply and under-cutting. The market is saturated with 'vendors', and each tries to under-price the other —among lodges, hotels, airlines, travel agencies, trekking agencies, rafting agencies, wildlife safaris, and even porters and riksa-pullers. A five-star hotel in downtown Kathmandu will provide bed and breakfast for as little as 20 dollars, and nowhere in the world be, in the Thamel tourist quarter can you have clean in sheets and attached-bath for as low as two dollars a night.

In whichever sector, Nepal's tourism has always started the high end, but then the 'service provider', proliferate and the asking price pummels. The country becomes a tourist heaven and tourism hell — enough to begin asking whether the industry is here to serve Nepal or vice versa.

The oversupply of 'capacity' itself is not a problem (and it does represent a more 'democratic' sharing of the pie). The issue is a terrible failure to market the country so as to fill all those extra beds. There are by today more than 300 trekking agencies in Nepal, vying for about 100,000 trekkers annually, many of whom actually prefer to walk unorganised. The hotels in Kathmandu are running at 36 percent occupancy — it has been years since the top hotels got top dollars. There was a time when high-end trekking used to go with ease for USD 150 a day, but the average now is about 20-25 dollars. White-water rafting, even till five years ago, was at USD 40 a day, but today the asking price is less than half of that.

It is true, as Edmund Hillary once told this writer, that even the "impecunious" have a right to travel, but the interest of the host country, Nepal, is to, first, maximise income from tourism, and, two, maximise spread of that income. The way things are today, Nepal seems to be focused exclusively on pandering to the impecunious, as a result of which there is precious little to share around. Last month, some European millionaires were reveling in the Everest region of Khumbu for USD 40 a day. When snow blocked their progress, they casually chartered a helicopter for USD 2000 an hour and toured the Everest Base Camp area, and then returned to rejoin their trek group.

No one can deny that Nepal's tourism has a lot going for it— a small country of South Asia blessed with great variety in culture, antiquity and geography. The Himalayan mountains are a permanent asset and the quality of service in Nepali tourism— warm and natural—is by all accounts one of the best in Asia. When occasionally a policy goes right, the response is immediate— as with the surge in domestic civil aviation when it was deregulated in 1991-1992.

But when you speak of international aviation, that is where the problem begins. The government-run flag carrier Royal Nepal, despite having competent management, has been bled by the politicians and bureaucrats over the last decade, to such an extent that its fleet today is half the size of 12 years ago. The airline is in the doldrums, its international 'network' stretching laughably from Osaka to London, supported by two narrow-bodied Boeing 757s. The glut in supply in every sector of tourism would be taken care of if Royal Nepal were to be allowed to fly as a real airline, but travel operators have waited two decades for this to happen.

Besides Royal Nepal's incapacity, the other major lack is in marketing the country. Over the years, Nepal has essentially 'sold' itself, but today's traveller has discovered so many more 'exotic' places in the Orient— and not just Bhutan, Ladakh, Tibet and Mongolia. Nepal now needs marketing, which is why a couple of years ago the government hived off its Department of Tourism and created an autonomous Nepal Tourism Board. With two percent of the total turnover of the private industry dropping into its coffers, NTB was to be a dynamic agency 'selling' Nepal. Suffice it to say that it has not quite worked out that way, and Nepal's marketing is actually done gratis by films like the large-format IMAX presentation Everest, which led to a surge of arrivals to theHimalaya over the 1998-1999 seasons and is spilling over into 2000.

When it comes to holistic promotion, the NTB and private sector as a whole do precious little other than to hope for such promotional bonanzas like Everest to land on their laps. (The travel traders do, of course, market their own businesses.) They lack commitment and creativity, as seen in the inability to adjust to Kathmandu Valley's changing cultural landscape. The holistic ambience of medieval urbanism has vanished over the last 15 years, sacrificed to pollution and cement-concrete, but the travel agencies are still trying to sell the Newar inner-cities as they did in 1980. The need now is to introduce 'micro-tourism', focusing on individual temples, monastic courtyards (bahals) and palaces,where Kathmandu's old-world charm can still be found.

Indeed, private industry has exhibited a remarkable capacity to squeeze tourism income out of each sector without evident concern for long-term sustainability. Thus, the industry kept quiet over the 1970s when the Valley lost much of its free-standing statuary to idol-theft; over the 1980s when the streetscape crumbled to the concrete onslaught; and over the 1990s when air and water pollution devasted Kathmandu's environment. All of these downturns affected tourism before anything else.

There are many ways in which Nepali tourism can innovate, but it requires creative savvy. Like the Himalaya, Lumbini as the birthplace of the Sakyamuni has an eternal potential to attract pilgrims and tourists. However, the East Asian tourists in particular seem to be staying away, perhaps because they realise the potential of Nepal's tourism mandarins to convert the place from a spiritual haven to a crass Disneyland.

Kathmandu's Thamel has evolved from a budget-traveler's refuge into a destination in its own right — probably the most cosmopolitan place in all South Asia, where Western 'cafe culture' can be enjoyed at middle-class prices. The place is a magnet not just for Western tourists, but also for English-speaking, travel-oriented, high-spending city elites from Dhaka, Karachi, Bombay or Bangalore, who would come to Thamel if they were told about it.

Like Lumbini or Thamel, so with casinos. Largely limited to the Punjabi weekender from New Delhi, the four casinos of Kathmandu have not been able to entice the other great gamblers of Asia, the Chinese who populate the east and the southeast. Trekking, the home-grown industry, has yet to 'upgrade' itself from a backpackers' delight to high-value tourism injecting better income into the villages.

True, there are some matters which are beyond the control of Nepal's tourism operators and government. For example, tourism is an industry that is extremely sensitive to bad news on the telly, and it does not help that Nepal is right in the middle of the volatile northern half of South Asia, a region described aptly by William Jefferson Clinton as "the most dangerous place in the world". Nepal's travel trade is therefore at the mercy of little wars and potential big wars, bomb blasts, nuclear tests and sectarian killings. Even if they happen hundreds of miles away, before you can say 'Chomolongma', the fax machine will be spewing a slew of cancellations.

The extended nature of the IC-814 hijack drama in December, the fact that the flight originated in Kathmandu, and that the Indian government chose to punitively and summarily cancel all Indian Airlines flights to Nepal, has affected tourism grievously. The summer tourist season in Nepal has been mostly filled by Indian tourists, many of them honeymooners, but the first quarter of 2000 saw a drop of 38 percent over the previous year of Indian tourists arriving by air.

The summer tourism season is by now a certified disaster, and so the need now to salvage at least the autumn season, which for Nepal is the peak. And therein lies the whispered prayer of all Nepali tour operators—that the violent Maoist insurgency of the past five years will once again spare tourism. But this year the prayer may not be answered. The long-dreaded US State Department 'travel advisory' went out on 21 April, stating that "the level of civil unrest and terrorist violence throughout Nepal has escalated in recent weeks and is expected to remain at heightened levels". It continues, "In a breakfrom past practices, in three recent incidents, Maoist insurgents have targeted tourists or tourist facilities in different parts of Nepal… Although no injuries have been associated with these confrontations, the targeting of tourist groups and facilities indicates a heightened level of risk for travellers in Nepal."

Tourism will be devastated, and all the attendant impact visited upon Nepali society, if the underground Maoist leadership fails to understand that, even at its most inefficient, the industry does help the economy and the population. There is a lot of room for the government, the NTB and the private sector to improve their performance, but they will have no space to perform if the threat of violence, tragically, keeps tourists from the one-time and would-be Shangri-La that is Nepal.

The impact of Indian Airlines' hijack and flight suspensions on air-tourist arrivals in Nepal; data for the first quarter of 1999 and 2000 (courtesy Immigration Office TIA and Nepal TourismBoard).


1999                2000                % change

94353              83561              -11.4%

(% change for same period in 1999 over 1998 was +5.4%)


1999                2000                % change

68.238             67,376             -1.3%

(% change for same period in 1999 was +6.8%)


1999                2000                % change

26,115             16,185             -38%

(% change for same period in 1999 was +1.7 %)

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