SANGAM PRASAIN
KATHMANDU, APR 08 -
Tourist arrivals to Nepal may be increasing, but foreign exchange earnings from tourism has been declining. The statistics of Nepal Rastra Bank (NRB) show that income from the travel trade has dipped in the first seven months of this fiscal year. According to NRB, tourism revenue amounted to Rs 14.80 billion during the review period, down 21.36 percent from Rs 18.82 billion in the same period last year.
Tourism income has fallen despite increased arrivals from the start of Nepal Tourism Year 2011. The first two months of 2011 saw tourist arrivals swelling 18.35 percent while income declined 28.67 percent.
According to the central bank, the country earned foreign exchange amounting to Rs 3.93 billion in January and February against Rs 5.51 billion in the same period in 2010.
Travel trade entrepreneurs attribute the decrease in collection to limited tourism activities and unhealthy competition resulting in low-priced tour packages.
However, NRB officials suspect that companies involved in foreign exchange transactions might have given incorrect data on income from tourism. They are baffled that while all the major hotels have reported a growth in their business, income from tourism is decreasing. “They may have classified tourism income under other categories while reporting their income to the central bank,” said a senior NRB official.
Raju Bikram Shah, general manager of the Shangri-La Hotel, said that his hotel’s tariff had been increasing by 15-20 percent annually and that occupancy was 97 percent. “Even during the off-season, we have increased our room rates,” Shah said.
The continuous decline in tourism income has raised the question whether Nepal is turning into a destination for budget travellers.
Travel traders said that it was too early to conclude that Nepal was turning into a budget destination. “It’s all about demand and supply,” said Arjun Prasad Sharma, president of the Nepal Association of Tour and Travel Agents. “Tourist expenditure decreases during the off-season.”
According to tourism entrepreneurs, unhealthy competition to offer packages at very low rates has also led to a fall in income. “Even when tourist arrivals increase, we have to provide cheap packages due to competition,” said Sharma. “This has also contributed to the decline in income.”
According to the Economic Survey 2010, the length of stay of tourists and their daily expenditure both have gone down as of mid-January 2010 compared to mid-January 2009. The length of stay went down to 11.6 days from 11.78 days and daily expenditure fell to US$ 36.88 from US$ 48.68. An analysis of annual income figures shows a meagre growth of 0.63 percent in earnings from foreign tourists in fiscal 2009-10. Tourism income in 2009-10 stood at Rs 28.13 billion compared to Rs 27.95 billion in the previous year.
Entrepreneurs say policy makers need to do some soul searching on why income from tourism is declining. They have stressed the need for programmes to lengthen the stay of tourists, encourage them to spend more and attract high-end tourists.
