Saturday, December 11, 2010

Arrivals reach all-time high


The highest arrival record of 1999 was broken on December 9


SANGAM PRASAIN
KATHMANDU, DEC 11 -

Tourist arrivals have bounced back in 2010 breaking all past records. Arrivals by air in the second week of December 2010 have surpassed the ever-highest number of 421, 243 recorded in 1999.

The country received 421,902 tourists in 2010 until Dec. 9, according to the tourist arrival statistics provided by Tribhuvan International Airport, Immigration Office. The highest arrivals record made in 1999 was exceeded on Dec. 9.

The second week of December saw about 1, 000 tourist arrivals daily. Travel trade entrepreneurs said that if the tourist inflow continues at the current rate, Nepal might well receive over 450,000 air tourists in 2010. However, they said tourist arrivals would drop in the third week of December due to Christmas. In the first 11 months, the country received 412,446 visitors. The figure was 378,712 in the same period last year. The country had witnessed record arrivals of 491,504 tourists (land and air) in 1999 on the back of the Visit Nepal Year 1998 promotional campaign. It was a steady slide thereafter.

Tourism entrepreneurs said three factors—increased air capacity, confidence build-up in tourist generating markets and the political commitment and investors encouraging investment in travel trade sector—boosted arrivals. “Looking at the recent arrivals trend, we can estimate that there will be over 600,000 tourists by both surface and air at the end of 2010,” said Prachanda Man Shrestha, chief executive officer of the Nepal Tourism Board.

The country has targeted attracting a million tourists in 2011. Of the total target, 700,000 have been estimated to arrive by air and the remaining by surface transportation.

Shrestha said that things were going in a positive direction. Prevailing peace has boosted the tour and travel operators’ confidence in the international market, as a result, they had been referring visitors for Nepal. Likewise, over two dozen international airlines connectivity has also made the things happen. However, the only setback in the tourism sector here is the ongoing issue of the national flag carrier. “Due to hitches in Nepal

Airlines’ fleet expansion, it has become hard to make attractive tour

packages and also reduce the airfare rendering competition with international carriers.”

Soaring tourist arrivals have brought smiles to the faces of travel entrepreneurs and hotel operators. “Things are looking very promising,” said Abinav Rana, general manager of the Radisson Hotel.

According to Rana, room occupancy of the hotels has bounced back. He said hotel occupancy in the last three month was encouraging. Hoteliers said that the last three-month period saw all the star properties being booked.

“Increased arrivals had a positive impact on hotels and the arrivals were result oriented this year,” he added. Prevailing peace in the country after many years and the Nepal Tourism Year 2011 hype has spurred visitor arrivals, Rana added. After some decades, the hospitality sector has revived with investors injecting massive investments in hotels.

The existing hotels have begun refurnishing their rooms and upgrading their services. All sorts of businesses, from handicraft, restaurants and hotels to trekking have experienced a significant growth this year. “Business of all the tourism sectors has increased,” said Arjun Prasad Sharma, president of the Nepal Association of Tour and Travel Agents (NATTA).

He, however, said that the only hindrance in the tourism sector would be Nepal Airlines’ weak performance and connectivity. There are two dozen international airlines connecting Nepal, which is encouraging.

However, visitors arriving here have the issue of high travel cost. The government should think of expanding the fleet of Nepal Airlines in order to discourage monopoly by international airlines, Sharma said. Entrepreneurs said that if NAC had not been mired in controversy, things would have been even better.


Visitor Arrivals by Air

Year Tourists

1998 398,008

1999 421,243

2000 376,914

2001 299,514

2002 218,660

2003 275,438

2004 297,335

2005 277,346

2006 283,819

2007 360,713

2008 374,661

2009 378,712

2010-Dec. 9 421, 902

Tuesday, December 7, 2010

Rice, maize output grows by 11pc

SANGAM PRASAIN

KATHMANDU, DEC 07 -
Production of rice and maize, the major food grains of the country, saw a robust 11 percent growth this year. It has been estimated that the growth in production of the food grains will propel the country’s economy growth and help avert food deficit.

According to the Ministry of Agriculture and Cooperatives food grains production report released on Tuesday, the country produced an additional 436,000 tons of rice and 200,000 tons of maize this year as compared to last year’s production. The production has been attributed to early monsoon and regular rainfall in major food producing districts. This year’s total rice output amounted to 4.46 million tons, while that of maize amounted 2.67 million tons.

Maize production this year has made a new record. Output of the second largest food grain after rice hit a whooping 2.67 million tons, which is equivalent to Rs. 44.65 billion.

The encouraging output, according to economists, is estimated to help meet the government envisaged 4.5 percent economic growth in the current fiscal year and avoid food deficit to some extent. However, they said the government’s food distribution channel should be more effective.

“At the time when the entire economic indicators are in a poor state, encouraging rice and maize production remains vital to propel the economic growth,” said economist Bishwambor Pyakurel.

Drop in food grains production last year had resulted in shortage of 316,465 metric tons of food, affecting over 1.6 million people. Rice and maize production had dropped by 11 and 4 percent respectively last year. Fall in the production of these major food grains had constrained the agriculture growth rate to 1 percent and the impact was largely reflected in the country’s overall economic growth.

The government has targeted to increase the economic growth rate to 4 percent in this fiscal from 3 percent last year. “Increased food grain production will at least raise the country’s Gross Domestic Product (GDP) by 0.5 percent,” said Pyakurel.

Pyakurel added that prevailing doubt about whether the country will achieve the 4 percent growth has been cleared with the agriculture production status. Agriculture sector contributes about 23 percent in the country’s total GDP. Major food grains’ production has a direct impact on the country’s GDP.

Puskar Bajracharya, a member at National Planning Commission, estimates that the GDP might increase by 1 to 2 percent. “We were uncertain about whether the country would meet the projected 4 percent economic growth rate this year when budget was delayed; however, now it seems possible,” added Bajracharya.

This additional rice and maize output is likely to play a key role in decreasing food deficit. However, economists express skepticism about government’s distribution policy.

“Unless the government adopts effective food distribution policy, districts reeling under food crisis will not get respite,” Bajracharya said, adding that the increased production could stabilise the market, but it cannot bring the price down.

“Early monsoon and continuous rainfall this year has boosted production,” said Hari Dahal spokesperson for the Agriculture Ministry. Dahal added that increased productivity in major districts also contributed to increase production.

“If paddy had been planted in all districts, an additional 178,000 tons of rice would have been produced,” Dahal said.

NAC unions warn of stir

FIFTH FREEDOM RIGHTS ROW
SANGAM PRASAIN

KATHMANDU, DEC 08 -

Trade unions of Nepal Airlines Corporation warned on Tuesday that they would shut down Tribhuvan International Airport if the government did not revoke its decision to allow Air Arabia to operate Kathmandu-Kuala Lumpur flights.

The unified trade union committee said that the Slot Committee meeting of the Civil Aviation Authority of Nepal (CAAN) had made an unilateral decision to grant Fifth Freedom rights to the carrier. The right allows an airline to pick up passengers at one destination and continue to another destination

The union said that the move was legal but against the national interest. “Selling NAC’s air route reflects an intention to make the national flag carrier go bankrupt and feed vested interests,” said Rajendra Regmi, president of the Nepal National Employees Union, central committee, NAC.

He added that although the country was celebrating Nepal Tourism Year 2011, NAC had been compelled to wage war against the government. “The government should be responsible for all the happenings,” Regmi said.

The Kathmandu-Kuala Lumpur route is one of the lucrative sectors for NAC that earns Rs. 8 million on a single flight. A NAC official said that the carrier had been incurring losses for three years on the route and that it only started generating profits from 2008.

Air Arabia is scheduled to launch its service to Malaysia from its hub in Sharjah on Dec. 16. The airline has already started selling tickets for the flight directly from its two official agents in Kathmandu.

The Ministry of Tourism and Civil Aviation and CAAN had awarded the route considering the weak performance of NAC which now has a single Boeing to serve all its international destinations. The ministry and CAAN had aimed to fill the gap on the eve of Nepal Tourism Year.

NAC had also operated flights on the Kathmandu-Bangkok-Singapore route under Fifth Freedom rights some 15 years ago, but it had to pay a royalty to Thai Airways, said NAC deputy managing director Raju Bahadur K.C. But NAC will not receive any royalty from Air Arabia, he added.

The union said that the parliamentary International Relation and Human Rights Committee had called NAC to discuss the issue. The union said that the committee had told it that any protest by NAC could harm diplomatic relations and the objectives of the Air Service Agreement (ASA) signed between the two countries. Nepal has signed ASAs with almost 36 countries and all of them allow Fifth Freedom rights.

Recently, the Commission for Investigation of Abuse of Authority (CIAA) had summoned the Ministry of Tourism and Civil Aviation secretary Kishor Thapa, joint secretary Ranjan Krishna Aryal and NAC chairman Sugat Ratna Kansakar over the issue of allowing Air Arabia to operate flights. The unions at NAC had filed cases against them.

Monday, December 6, 2010

Tourism bodies for win-win situation

Airlines fix uniform fares

SANGAM PRASAIN
KATHMANDU, DEC 06 -
Three tourism associations have decided to adopt a win-win situation in response to the move by the Airlines Operators Association of Nepal (AOAN) to fix uniform fares and commission rates for travel agents for long-haul routes.

A joint meeting of the Nepal Association of Tour Operators (NATO), the Trekking Agents Association of Nepal (TAAN) and the Nepal Association of Tour and Travel Agents (NATTA) on Monday discussed a new modality that will be presented to the AOAN.

“We have decided on a ‘win-win’ situation, but considering that Nepal Tourism Year is approaching, we have decided to wait until December-end,” one of the association members said.

“We have asked the AOAN to postpone the decision until December-end,” said NATTA treasurer C.N. Pandey who represented the association at the meeting.

He added that the meeting had endorsed a proposal to be submitted to AOAN soon. The association is mulling publishing seasonal airfares and revising some of the decisions made by the AOAN for a win-win situation. NATO president Ashok Pokhrel said that the AOAN’s move to stop the practice of charging excessive commission by travel agents from customers was a positive one. However, implementing the decision immediately could create problems for all the agencies operating here.

“We have asked that the old provision be continued until the end of 2010 as the agencies had already submitted the quotations for their tours at the old rates,” he said.

A change in the commission rate and airfares in this situation will result in massive losses to tour and travel operators, he added.

Domestic airlines have fixed uniform fares and commission rates for travel agents for long-haul routes, which they said was an effort to make the aviation industry sustainable and ensure healthy competition.

From Dec. 1, Buddha Air, Yeti Airlines, Guna Air and Agni Air have been charging the same fares for flights between Kathmandu and Pokhara, Biratnagar, Bhairahawa, Nepalgunj, Bhadrapur and Dhangadhi. The fares have been adjusted to match Buddha Air’s tariff. The differences in ticket prices range from Rs 50 to Rs 300.

Similarly, the commission for travel agents has been fixed at its upper limit. Travel agents get a commission of up to 12 percent. However, the commission on Buddha Air’s tickets has been fixed at 7 percent and the commission on Yeti Airlines tickets at 11 percent.

“The uniformity in fares and commission will not be sustainable in the current scenario where airline passenger movement has been swelling every passing year,” a tour operator said.

The move by the airlines reflects cartelling when the country has a free market economy, said a travel agent. Pokhrel said that it was their business; and that if it looks like cartelling, it was the government’s job to stop it.

Fuel prices go up for the fifth time this year

SANGAM PRASAIN
KATHMANDU, DEC 06 -
Nepal Oil Corporation (NOC) has hiked petroleum prices for the fifth time this year. The state-owned monopoly jacked up the prices of petrol, diesel and kerosene by Rs 3 per litre each effective from Monday. Similarly, liquefied petroleum gas (LPG) has become dearer by Rs 75 per cylinder.

Petrol now costs Rs. 88 per litre, diesel Rs 68.50 per litre, kerosene Rs 68.50 per litre and LPG Rs 1,325 per cylinder.

NOC said that a rise in international prices and increased road maintenance and upgrading charges levied on petrol and diesel by the government had forced it to raise the rates. The government recently doubled the road maintenance and upgrading charge on petrol to Rs 4 per litre and on diesel to Rs 2 per litre. NOC managing director Digambar Jha said that the international price of crude oil was US$ 74 per barrel in July when NOC last revised fuel prices. “The price has risen to US$ 90 in the last five months.”

Similarly, the price of LPG in the international market was US$ 590 per ton in September which soared to US$ 783 in December, Jha added.

The price hike means NOC will collect monthly profits of Rs 30 million from petrol, Rs 110 million from kerosene and Rs 30 million from aviation fuel. However, the corporation will be incurring monthly losses of Rs 200 million on LPG and Rs 140 million on diesel. “In total, we will be losing Rs 170 million each month,” Jha said. NOC said the government’s decision to double the road maintenance charge had added Rs 28.44 and Rs 11.56 to the price of a litre of petrol and diesel respectively. The government will now be taking in Rs 180 million each month as road maintenance charge. Similarly, the government will be collecting Rs 149 on each cylinder of LPG.

Prem Lal Maharjan, chairperson of the National Consumers Forum, said that the government’s decision to double the road maintenance charge was not reasonable. “The government is fuelling inflation when consumers are already suffering from double-digit price rises,” he added.

“Everyone knows about the condition of the roads. The government is collecting Rs 20 million each day in the name of road maintenance, but it has been doing nothing,” Maharjan said. “The hefty tax levied on LPG shows how the government is increasing the burden on the people.”




Year Petrol Diesel Kerosene LPg
(Rs/Lt) (Rs/Lt) (Rs/Lt)
2003 56 33.50 27 700
2004 62 41 36 750
2005 67 46 39 900
2006 67 52.50 47.65 ----
2007-Oct 73.50 56.25 51.20 1,100
2007-Dec 80 56.25 51.20 -----
2008 100 70 65 1,200
2008-Dec 85.50 60.50 60.50 -----
2009 77.50 57.50 57.50
2010-Feb 77.50 59 59 1,250
2010-Mar 80 61 61 -----
2010-Apr 82 63 63 -----
2010-July 85 65.50 65.50 -----
2010-Dec 88 68.50 68.50 1,325

Sunday, December 5, 2010

Domestic Airlines fix uniform fares for long-distance routes

SANGAM PRASAIN

KATHMANDU, DEC 06 -

Domestic airlines have fixed uniform fares and commission rates for travel agents for long-haul routes. The carriers said the move was an effort to make the aviation industry sustainable and ensure healthy competition.

From Dec. 1, Buddha Air, Yeti Airlines, Guna Air and Agni Air have been charging the same fares for flights between Kathmandu and Pokhara, Biratnagar, Bhaira-hawa, Nepalgunj, Bhadrapur and Dhangadhi. The fares have been adjusted to match Buddha Air’s tariff. The differences in ticket prices range from Rs 50 to Rs 300.

Similarly, the commission

for travel agents has been fixed

at its upper limit. Travel agents

get a commission of up to 12 percent. However, the commission

on Buddha Air’s tickets has

been fixed at 7 percent and the commission on Yeti Airlines tickets at 11 percent.

“The uniformity move has been taken to stop uncontrolled overcharging by travel agents when tickets are scarce,” said Rupesh Joshi, senior marketing manager of Buddha Air.

Meanwhile, travellers fear that the standardised airfare policy will mean the end of competition among airlines regarding fares.

“The flat airfare provision will stop the fare war, but it will encourage airlines to upgrade their services,” said Binay Shakya, manager of Yeti Airlines.

He added that overcharging by travel agents would be stopped while carriers would be encouraged to provide improved services. “Fliers will now select the airline that provides the best service as the fares are the same for all,” Shakya said.

Guna Air marketing manager Prajwal Thapa said that

uniformity in airfares would

result in greater punctuality,

more efficient service and healthy competition.

“We are thinking of making domestic airlines sustainable. Fleet expansion could lead to unhealthy competition in terms of airfare among carriers with small and large fleets,” said Yog Raj Kandel, member of the Airlines Operators Association of Nepal (AOAN).


From Kathmandu Revised Yeti’s Past Guna Past Agni Past

Pokhara 2,780 2,700 2,660 2,660
Biratnagar 4,160 4,100 4,000 4,000
Bhairahawa 3,585 3,485 3,285 3,385
Nepalgunj 5,335 5,035 ------ ------
Bhadrapur 4,800 4,750 ------ 4,650
Dhangadi 7,560 7,560 ------ ------

Saturday, December 4, 2010

Swelling arrivals spur investment in resorts

SANGAM PRASAIN
KATHMANDU, DEC 03 -
Increased tourist arrivals and hopes of lasting peace coming to the country have inspired investors to build new resorts. Sukute Beach Adventure Camp in Sindhupalchok, Balthali Village Resort in Kavre and Kinnari Resort in Naldunga, Kavre have obtained operating licenses from the Tourism Ministry’s Industrial Division.

Nirajan Ghimire, section officer at the division, said that the applications of another three resorts -- Narayani Resort, Chitwan, Pristine Paradise Tent Resort, Dhulikhel and Two River Lodge, Melamchi -- were being processed.

There has been a significant rise in the registration of new hotels since 2009, but there have been few resorts. According to the Tourism Ministry, registrations of new hotels exceeded 1,100 in 2009-10.

The resort sector, worst hit during the decade-long conflict, has been making a slow recovery. “Hotels can be erected anywhere in the city or suburbs, but a resort property requires a scenic setting like near lakes and rivers or on hills and mountains,” said Arun Shrestha, executive director of Dhulikhel Mountain Resort. He said resorts are spread over a larger area and contain all the facilities found in hotels. Moreover, a resort has to provide recreational opportunities like golf, spa, amusement park and sports.

Resort operators said they were more vulnerable during the conflict period because of their isolated and far-flung locations. “Travel traders are upbeat that the situation is improving, and swelling arrivals in recent times have encouraged investment in resorts,” said Shrestha.

He claimed that some small hotels and restaurants were calling themselves resorts even though they did not fulfil the requirements. The government should consider this before issuing the operating certificate, he added. Nepal received 412,446 tourists by air during the period January-November, the highest since 1999.