KATHMANDU: When the COVID pandemic broke out last year, tourist officials had no idea it would suffer such a massive loss. While the first wave of COVID had tapered out and the tourism sector had gradually resumed activity, the outbreak of the second wave has thrown tourism businesses to sleep once more.
Hotels, airlines, tours and trips, treks, transportation, guides, adventure tourism, and other tourism-related businesses have now gone bankrupt. According to entrepreneurs, it is currently challenging to sustain their businesses. Furthermore, new variations of COVID that have recently been detected pose additional hazards to tourism businesses.
The state of hotels is essential.
All businessmen are receiving COVID blows. However, major and small tourist-based hotels have taken the brunt of the damage.
Domestic tourists supported all but five-star hotels following the initial wave of COVID last year. Domestic tourism, on the other hand, has come to a halt with the second wave of COVID. According to Sajan Shakya, General Secretary of the Hotel Association of Nepal (HAN), the second wave has inflicted more damage than the first. He stated that he had not anticipated such a catastrophic second wave occurring after the first wave had faded.
After the first wave’s effects diminished, there was a lot of optimism as the number of domestic tourists climbed in newly opened hotels. Foreign tourists began to arrive in September of last year. That gave us hope. However, the second wave has brought the hotel business, which has a Rs 1 trillion investment, to a halt for a few years,” added Shakya.
According to him, the speculations about the third wave have made businessmen more concerned. He claims that if the government does not consider and plan ahead, not only tourism enterprises, but other sectors of the economy, will suffer severely.
According to Shakya, there is no alternative to ‘vaccine’ if the tourism industry is to be promoted.
“The sooner the government is able to vaccine people against COVID, the sooner we will be able to exit this pandemic,” he stated.
According to Shakya, huge five-star hotels will lose millions of rupees in 2020. The first season of 2021 has concluded. There are no bookings for the upcoming season (September to October), and Nepal is experiencing a COVID second wave problem. This means that there will be no room for tourists to visit during the forthcoming autumn season.
It remains to be seen how the third wave will affect things. As a result, tourism operators will have to wait until the end of 2023, according to Shakya.
“If Nepalese people get immunizations today, the tourism industry can be ‘revitalized,’” he says.
There are now three types of hoteliers in HAN. There are large five-star hotels, medium-sized hotels, and tiny hotels. All three are currently in the grip of a major crisis.
The daily cost of large (five-star, four-star) hotels, according to General Secretary Shakya, are in the hundreds of thousands. Their expenses are primarily personnel wage allowances and motel maintenance. Because the hotels have been closed for a long period, merchants are concerned about hotel management.
The state of recently opened medium-level hotels is likewise dismal. The hotels were compelled to repay the bank loans. Similarly, modest hotels are in jeopardy. Hotels in high-priced regions such as Thamel are unable to pay monthly rent.
The NRB has made concessional loans of up to Rs 200 million to large hotels at a rate of 5%. According to Shakya, 93 large hotels in HAN have received concessional loans so far, but this sum is insufficient for major hotels. According to Shakya, the government should grant these hotels with a concessional loan of more than Rs 500 million.
Small hotels with an investment of Rs 50-70 million are ineligible for concessional loans. According to NRB standards, only hotel owners are eligible for the loan. As a result, even tiny hotels must take out loans based on their assets. Entrepreneurs suggest that the government spend the money placed by hotels in the social security fund to revitalize the hotels at this time. Otherwise, he claims, there is no choice but to leave the hotel business if the third wave breaks out.
Airlines are in trouble.
Airlines are another major player in the tourism industry. Nepal’s airline businesses, which have invested Rs 1.1 trillion, are nearly at a halt.
According to Yograj Kandel, Spokesperson for the Airline Operators Association, the second wave of COVID is significantly impeding airline operations. According to him, Nepal’s domestic airlines were 40-45 percent in debt prior to the pandemic, but that debt has now risen to 70 percent.
According to Kandel, the current loss for Nepali airlines is between Rs.18 and Rs.20 billion. He also stated that the government should send vaccines as quickly as feasible to address this issue.
“It will be difficult to ‘revitalize’ the tourism industry unless the government vaccinates 80 percent of the population,” he warned. The third wave of COVID is also expected. The capacity of Nepal’s airlines to endure the third wave is insufficient.
The trekking business has come to a halt.
The trekking industry is regarded as the lifeblood of Nepal’s tourism industry. The region’s umbrella organization is the Trekking Association of Nepal (TAAN).
According to TAAN Chairman Khum Bahadur Subedi, entrepreneurs and their employees have been in a lot of problems over the past year as a result of COVID. The initial wave of COVID, he claims, completely decimated the tourism business in a short period of time. This has been pushed even further by the second wave. According to Subedi, if the third wave arrives, the business may fail.
Even now, 17% of entrepreneurs have abandoned the tourism industry. Chairman Subedi claims that if this tendency continues for a long period, 70/80 percent of enterprises will emigrate. He claims that the government must provide up to Rs 2.5 million in loans without collateral on the basis of tax clearance in order to keep the businessmen afloat. He also stated that the government should take care of the employees involved.
Tourists would not rush to Nepal, according to Narayan Parajuli, President of the Society of Travel and Tour Operation Nepal (SOTTO). Tourism entrepreneurs’ businesses such as Sotto, Natta, and TAAN have closed. Some of the existing businesses must be run from home.
“If all processes had been followed and regular flights had been conducted, we, the business travelers, would have lived. However, a third wave is also expected. So, how are we going to stay in the industry?”