Nepali Times
Economic Sense
Look north


The Beed is not in a mood for sarcasm and sly beginnings this week. So here goes. It is widely believed that the agreement signed between Nepal and China this week will end our over-reliance on visitors from south of the border. That relation is, of course, important, but affected by such a gamut of some bizarre and some not-so bizarre factors, that it is wise to finally have a back-up. China has listed Nepal as an outbound destination for its citizens. This means Nepal will get more Chinese tourists all right, but it also allows Nepal to develop into a transit destination for tourists from third countries visiting China.

The announcement was no doubt greeted with semi-hysterical whoops of joy and relief by the demoralised Nepali tourism industry. Surely, the whisper goes, wonders will now happen.

China is a large emerging market for outbound tourists-estimates say that from the 12 million now, this number will increase to 50 million in 2010, and as much as 100 million in 2020. Over the years, many venerable experts predict, China will surpass all countries, emerging as the largest source of outbound tourists. The purchasing power of many Chinese is increasing as the economy opens up. Potentially, China could spend billions of dollars on tourism.

And yes, there is great potential for Nepal but this Beed, gimlet-eyed as always, sees room for bungling. Indeed, it sometimes seems to one in especially bleak moments as if it is becoming a bit of a national pastime, to get up, yawning, for another cup of tea, just as a wonderful opportunity lands in our laps.

Past experience, which ye olde columnist has in abundance, suggests we might not make the most of such an agreement. For instance, in 1996, after a big hue and cry the number of weekly airline seats was increased between Nepal and India, but since then this has remained stagnant. Private operators have opted out of India and the national flag carriers have not increased their frequency. Similarly, Nepal has bilateral airline agreements with many countries, and theoretically we have over 60,000 seats a week. But what part of this do we really use? The China agreement should not die down with the initial euphoria. Perhaps, the Nepal Tourism Board and other travel associations should start planning right away how they will take advantage of this new arrangement.

We need to examine what the Chinese tourists really want and what can Nepal offer compared with other destinations. They've seen plenty of mountains, religious pilgrimage is pass?, and as for adventure sports, there are plenty of options even in China. So why would they come to Nepal? A young bourgeoisie group, getting larger as we speak, is looking for the kind of exoticism that stems from a cosmopolitan lifestyle that they cannot enjoy in China. The United States is still a dream destination, and with its ever-effective branding, no doubt the west will continue to be a premium option. Why would a young Chinese who can fly to Australia as easily come to Nepal? We need to work and work hard to provide a wonder product.

Once again, we come to the issue of understanding the market and providing quality service. The Beed will repeat his rhetoric: open up the travel trade to foreign operators, if we continue to protect Nepal's travel industry, we will lose out. It is better to have a handful of travel companies of international repute providing quality services than hundreds of local ones that exist to perish swiftly. The China Agreement cannot be allowed to remain a paper tiger.

(11 JAN 2013 - 17 JAN 2013)