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Tourism & Hospitality Sector

Overview

Nepal offers a unique comparative advantage for profitable and impactful investment in diverse areas of the tourism sector, including adventure, cultural, religious, and MICE (meetings, international conferences and events) tourism. Nearly 1 million recorded tourists visited Nepal in 2017 with an average receipt of about US$ 892 per arrival. Nepal has seen consistent growth rates in the number of tourists in the last 3 years with impressive growth rates of about 33%, 35% and 29% in 2015, 2016 and 2017, respectively. This has come about due to booming outbound market of emerging and neighbouring economies and from the sector receiving high priority from the government. The government’s Vision 2020 for the sector envisions to double the number of tourists to 2 million per year by 2020. Tourism is one of the priority sectors of the government in the National Trade Integration Strategy. Planned improvements in tourism infrastructure, especially with the new international airports in Pokhara and Lumbini, technology, and technical and vocational education will make the sector more attractive. Moreover, the market for domestic tourism has grown rapidly in recent years. According to the latest figures from the World Travel & Tourism Council, the sector contributed USD 1.9 billion (7.8% of GDP in 2017) to Nepal’s economy. The contribution is expected to reach USD 2.95 billion in the next decade, even by conservative estimates. The sector supports about half a million jobs directly and more than a million jobs indirectly. The Travel and Tourism Competitiveness Report 2017 ranks Nepal high in terms of price competitiveness (19th), international openness/ visa requirements (8th) and abundance of natural resources (27th). This represents an unparalleled opportunity for investors.

Investment Opportunities

  1. 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.

 

  1. 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.

 

  1. Meetings, Incentives, Conferences, Events (MICE) Tourism
  2. Cultural and Religious Tourism: There is huge potential for religious tourism in Nepal. Pashupatinath, Muktinath, and Lumbini are most popular religious tourism destination in Nepal.

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