Yogendra Shakya is a hotel entrepreneur and a member of the Nepal Tourism Board. He spoke to Nepali Times on the crisis in the tourism sector and how it is affecting the rest of the economy.
Nepali Times: So, how bad is it?
Yogendra Shakya: Very bad. The year 2000 saw a decline of almost about 11 percent compared to 1999. This year (2001) June was 56 percent less than last June, November was 42 percent less, December is even worse than November, and we already had surplus rooms compared with arrivals. Nepali hotels can cater to 1,200,000 tourists a year (the average stay in hotels is three nights) and we have less than 400,000 tourist arrivals. Hence, all year round, average occupancy is about 30 percent.
Is there a silver lining at all for 2002?
I am desperately looking for one, but the lining is very slim-especially because of over supply of hotel rooms, security, and the Maoist problem. More air seats are needed to balance the internal growth of tourism. A strong national carrier is necessary to support the tourism industry.
Shouldn't we be planning new strategies now for next year and beyond? What are you doing in the Nepal Tourism Board?
I agree that the mood in the tourism sector is at its lowest ebb. We have had one nasty incident after another within the country as well as outside. As the saying goes, when problems come, they come in swarms. When the going is bad in any business, income shrinks, because income shrinks, you cut down on expenses, because you cut down on expenses, you compromise on your product, and that in turn shrinks your business further. You get caught in a Catch-22 situation.
The NTB's annual budget of Rs 100 million may not be too big for national tourism promotion, but it is definitely much more than what the Department of Tourism was operating with. As a co-ordinator of the promotion department, my first effort was to have better participation of the private sector, who are the real experts, in their respective countries. We narrowed our promotion to 12 countries only, rather than going everywhere with limited funds: Primary markets: USA, UK, India, Japan, Germany. Secondary markets: Netherlands, France, Spain, Italy. Potential markets: China, Middle East. The new managers have been given a free hand to come up with more vibrant gimmicks.
Are there new non-traditional tourist markets we are now looking at?
When tourism was recognised as a business in the early 60's and 70's, tourists were referred either as "Americans" or "hippies" or "goras"-denoting that tourists are all white. It was only after the 80's that non-westerners were also recognised as tourists. In fact till date, Nepali law still defines tourists as non-Nepalis. Domestic tourism is really a new non-traditional market. The NTB's classification of "potential markets all fall into the non-traditional market". China and the Middle East are our two new potential markets.
Personally I think there is a huge potential in one non-traditional market: retired or "silver age" people who want to migrate and live the rest of their lives in an affordable and beautiful country. But this requires revolutionary thinking on the part of the government and our laws. Spiritual and MICE (meetings, incentive holidays, meeting & exhibitions) tourism are also other new markets for Nepal.
How do we revive Indian arrivals?
First, Indians must feel that they are welcome, and that Nepalis do not have anti- Indian sentiment. All frontier formalities should be eased, such as the ID requirement, Indian vehicles should be able to enter with ease, and there should be no currency restrictions. After the fall in Indian arrivals, I made a very informal study: 30 percent of the fall was really the MICE (meetings, incentive holidays, meeting & exhibitions) component of the Indian market. This was not all our fault, but had as much to do with the cost control measures of the Indian corporate market in the year 2000/2001. We must focus on the MICE market for bigger volume from India.
You want the government to help rescheduled tourism industry loans. Is that fair to the rest of the economy? After all, everyone is suffering.
In the US and all over the world, there were job cuts, layoffs, even shut downs in all segments of tourism-hotels, airlines, travel agencies, etc. Here the industry is only asking for rescheduling loans. I think that is not really asking for too much. Other industries are also suffering, they should be offered similar schemes. If the situation gets worse, it is better that they be allowed to shut down, so at least the remaining may survive.
I may have built my hotel, but the hotel is built on Nepali soil and ultimately belongs to the country. I am only the present caretaker. If we can think from that perspective, then we can understand why we may need help in bad times. After all, these industries provide employment and pay taxes in good times.
How crucial is Royal Nepal Airlines to a tourism revival?
A strong national carrier is the backbone of the country's tourism. Singapore, Thailand and Malaysia, all have strong tourism because of their national carrier. RNAC is plagued by politicking. It is a lost cause, but as I don't see another national carrier being born, our only choice is to revitalise RNAC. But havingsaid that, we should encourage foreign carriers to fly in and have a friendly civil aviation policy.