Two associations of travel agents, Nepal Association of Tour Operators (NATO) and Nepal Association of Travel Agents (NATA) are divided over the issue of the bank guarantee they are required to deposit into the national coffer.

NATO has proposed to the government that any travel agent working as a tour operator should deposit Rs 2.5 million as a bank guarantee to ensure quality service to clients. NATA argues that a majority of travel agents cannot afford to deposit that amount.

NATO's chairman Basanta Mishra says the idea had to be pushed because of complaints from tourists of fraud and bad service. "We have to respond to such complaints before Nepal becomes a destination for hippies again," Mishra says. "Once the deposit is fixed, tour operators will be forced to maintain quality."

NATA says NATO just wants to monopolise the business. "The majority of travel agents are dead set against the idea," says Rabi Poudel president of NATA which has 250 travel agents. "How can we pay 2.5 million when our business has slackened, why should only big operators be allowed to do business that way?" he asks.

More than 600 travel agencies are registered with the Ministry of Tourism, but only 200 are in business. Travel agents get their operating license only after they deposit Rs 50,000 as the bank guarantee. But the government is already working on revising the amount. After NATA came to know that the revised bank guarantee would be Rs 300,000, it approached the government to lower the amount. "We have been assured that it will be lowered," says Poudel.

NATO officials argue that since travel agents deposit bank guarantees to different airlines for ticketing transactions, there is no reason why they cannot do the same for tour operations as well.

Despite its four-decades of experience, Nepal's tourism industry does not have any accreditation program, either from the government or from the private sector. None of the tourism related organisations and government agencies have fixed criteria for services offered by travel and trekking agents.

But Poudel argues: "How can you guarantee quality by increasing the deposit?"