Based on the annual World Travel and Tourism Council research report, Nepal’s tourism sector generated Rs 240.7 billion in revenue and supported more than 1.05 million jobs directly and indirectly last year. With the initiation of VNY 2020, there was wide optimism amongst the travel industry hoping that there would be a growth in numbers and foreign exchange earnings even though it was quite certain that its target figure of 2 million was an impossible task.
However due to the lockdown because of the pandemic caused by COVID -19, the scenario has totally changed. It has plunged the whole world in an unprecedented situation, has hit hard on business sectors globally. Taking into account the unparalleled introduction of travel restrictions across the world, the United Nations specialized agency for tourism expects that international tourist arrivals will be down by 20% to 30% in 2020 when compared with 2019 figures but it could be worse. This could translate into a loss of US$ 30 to 50 billion in spending by international visitors. If we consider the figure of WTTC for 2019, this itself would be a loss between Rs. 50-70 billion in Nepal. Not a single sector of tourism from hotels, airlines, tour operators, transportation etc. has been able to operate its services due to the lockdown. Between 24 January to date, 48 cases of coronavirus positive patients have been confirmed and in comparison is considered a safer destination. With the strict measures in place, it is likely that the situation in Nepal will improve significantly in the near future. However, once the lockdown in Nepal is over and when borders/airports are opened, the situation may again be the same if it is still not under control in other countries. This has brought uncertainty on how things will evolve for tourism in Nepal in the near future.
Nepal’s Tourism Transportation and Vehicle Industry is also a major shareholder in terms of its capital investment and services. Currently, more than 65 members are associated with Nepal Tourism Vehicle Association while many more are operating independently also. Due to the VNY 2020, the investment increased more because of the expected demand for its services. With the unexpected spread of the pandemic, the entire sector is worried about the repayment of the huge loans. Although Nepal Rastra Bank has announced a number of relief measures, including rescheduling of loan repayments deadline, for businesses affected by the Covid-19 pandemic, there are no clear guidelines that have been directed. If there are no concrete measures such as postponing the repayment cycle and providing substantial assistance, it is likely that the sector will go bankrupt leading to non-repayment of the loans and interests. It should be noted that other non-tourism industries in Nepal are likely to rise slowly (agriculture, manufacturing, service, construction etc.). Comparatively, the tourism industry is directly related to the demand and supply of tourists would be the most affected amongst all industries. The Government of Nepal should, therefore, take this seriously and come out with measures to support the tourism industry. According to an article published in The Independent, Coronavirus’s economic danger is exponentially greater than its health risks to the public. If the virus does directly affect your life, it is most likely to be through stopping you going to work, forcing the employer to make you redundant, or bankrupting your business. Coronavirus will bankrupt more people than it kills — and that’s the real global emergency. Nepal’s entire travel industry to include the transportation industry will also be impacted severely.
However, if it gets contained, we may not receive guests from Europe, Australia and the Americas in the near future. Consequently, we could focus on our neighbouring markets India, China, other South Asian Countries as well as some of the countries in South-East Asia. We must, therefore, start our planning now and start the marketing efforts in these areas once the situation normalizes. We must be able to brand ourselves as a safer destination apart from all of our destination attributes.
Although the situation looks bleak, let us still hold on to our optimism and hope for the best. Nepalese are known for their resilience and like in the past, we will rise again.
Mr. Mohan Bahadur Prasai
Chairman & CEO – Ashiyana Vehicle Service
Former Marketing Manager – Nepal Tourism Board
Former Village Tourism Advisor – UNDP’s Partnership for Quality Tourism Project