March 21: Hotel Association of Nepal (HAN) has said that the hotel industry has reached a situation where it cannot afford the operating expenses. HAN claimed that the hotel industry is on the verge of collapse due to inflation, lack of liquidity, lack of environment for tourists and customers, and financial institutions putting pressure on them for payment of interest.

HAN, the umbrella organization of big hotels, made such an announcement at a press conference in Kathmandu on Monday. During the event, Shreejana Rana, president of HAN, said that most of the hoteliers are worried about how to run their business in this situation. She said that restructuring or rescheduling of loans as well as extension of time period for the payment of loan and interest is absolutely necessary to revive this sector.

HAN has also demanded the authorities concerned to reduce the interest rate to a single digit. Binayak Shah, senior vice president of HAN, said that the hotel industry, which was badly affected by Covid-19 pandemic for almost three years, has not been prioritized in the state's policies and regulations. "The fact that only half of the tourists came in 2022 compared to 2019 has given a positive message," he said. "However, every businessperson is not able to take benefits compared to the past."

HAN said that although the responsibility of paying the principal and interest of the loan is on the borrowers, the government should facilitate them during the current situation. Shah said that the business has dropped to zero due to the government's control-oriented policies such as health protocols and lockdowns during the Covid-19 period. According to Shah, the hotel industry has been deprived of the facilities provided to other industries. According to him, even though the hotels are running now, they are at a loss because they are not able to generate income to meet the operating expenses. He also said that due to the entry of many new hotels in the market, the competition has increased and there has been a pressure to reduce the price. HAN also complained that it is very regrettable that the government has not recognized the hotel sector of Nepal as an industry even though they have already invested more than the annual budget of the country.