Tourist arrivals up, expenditure down

POST REPORT
KATHAMANDU, DEC 13 -

The good news is that the country is witnessing a significant rise in tourist arrivals. The bad news is, foreign exchange earning from travel trade is declining.

During the first three months of the current fiscal year, foreign tourist expenditure plunged by 33.4 percent to Rs 4.72 billion from Rs 7.09 billion during the same period last year. The country saw the number of tourists increase by 24.3 percent, 20.6 percent and 12 percent in August, September and October, respectively, according to the Ministry of Tourism and Civil Aviation. While analysing the annual income figures, a meagre

growth of 0.63 percent was recorded in earnings from foreign tourists

in FY 2009-10. The income in

2009-10 stood at Rs 28.13 billion, whereas it was Rs 27.95 billion in the previous year.

The figure which includes the income from tourists every month in its report on macro-economic situation of the country has surprised the Nepal Rastra Bank (NRB) also.

“We are surprised at the figure that has come at a time when the country is receiving an increasing number of tourists,” said Yubaraj Khatiwada, governor of NRB. It is disappointing for the central bank which has been working hard to reduce the Balance of Payment (BoP) deficit. The BoP deficit has gone up in recent months against the expectation of the central bank. The BoP deficit rose to Rs 6.8 billion as of mid-October from around

Rs 4.36 billon as of mid-September. The governor was not sure

whether it was due to the shortened length of stay of tourists or

the country’s failure to receive high spending tourists.

An NRB official also suspected that the companies involved

in foreign exchange business

might not given the correct data on income from tourists. “They may have classified the income from tourists in other categories while reporting to the central bank,” said a senior NRB official.

For Ashok Pokharel, president of Nepal Association of Tour Operator, the figure is not surprising. “Low income from tourists is a result of the flawed policy of those who are launching promotional activities. “There is no component of earning in the promotion of Nepal Tourism Year-2011,” he said. “The promotional activities are just focused

on how to achieve the target of bringing one million tourists during the tourism year.”

He stressed on the need for programmes that would lengthen the stay of tourists, encourage them to spend more and attract high end tourists. Big hotels are, however, not feeling hit. “Our income has grown with the increased charge and the trend of their stay in the country has remained the same,” said Bharat Joshi, sales and marketing manager of Hotel Yak and Yeti.

The figure presented in the Economic Survey-2010 also gives a glimpse of why income from

tourists is witnessing a decline. The stay of tourists and their per day expenditure both have gone down as of mid-January 2010 as compared to mid-January 2009, according

to survey. The length of stay went down to 11.6 days from 11.78 days and the per day expenditure fell to US$ 36.88 from US$ 48.68.

The size of the income from tourists as compared to the gross domestic product also went down to 2.4 percent in FY 2009-10 from 2.8 percent in the previous year, according to the report.