--By Suraksha Adhikari 

 

Nepal has again become a very lucrative country for hotel business. A number of leading global hotel chains have already declared to expand their presence in Nepal while many others are planning to enter in this small Himalaya country. 

 

Multinational hotel brands Sheraton (the largest and second oldest brand of Starwood Hotels and Resorts Worldwide) and Marriott International (a leading hotel chain based in Maryland, US) recently announced the decision to enter Nepal. 

 

Shesh Ghale, the Australia-based Nepali millionaire businessman, has entered into joint venture with Sheraton to operate a five-star hotel in Kathmandu. His MIT Group Holding Nepal recently signed an agreement with Starwood Hotels and Resort Worldwide Inc and set the project rolling. 

 

Slated to open in February 2018, the 225-room Sheraton Kathmandu Hotel will be managed by Starwood Hotels & Resorts. This project will bring around Aus $ 75-80 million in Nepal. 

 

Similalry, Maliram Shivakumar (MS) Group has signed an agreement with Marriot International, a globally renowned chain of hotels, to open a four-star hotel in Nepal. Named “Fairfield Marriott Kathmandu”, the hotel will be located in Thamel which will start its commercial service in the beginning of 2016 with around Rs 650 million investment. 

 

Various other 5- star hotels like Sambala Holdings at Maharajgunj, Chhaya Devi Complex at Thamel and Shree G Hotel are also planning to start soon. Similarly, luxurious hotels have also been established outside Kathmandu valley mainly in Pokhara, Bhairahawa, Lumbini and Nepalgunj. 

 

With the tourism industry’s growth in Nepal, it is certainly no surprise that the hotels have mushroomed in recent years. As the number of tourists and foreign business travelers in Nepal are growing, Nepal’s rapidly maturing hotel industry is one of the key beneficiaries. The country is booming the world of five-star hotels offering best services. 

 

Apart from 5 stars hotels, the hotels labeled as 4- star, 3- star, 2- star, other informal hotels and even home stay system have been witnessing rise in the investment with the increasing number of tourists in Nepal. Though selected number of tourists emphasize on their living standards also during their visit, most of the tourists entertain themselves on spending money on recreational activities rather than their lodging which is the main cause of flourishing the business of non star hotels and home stays. 

 

Rising Investment 

According to the statistics provided by Nepal Rastra Bank, the total investment in hotel sector in Nepal till the date is Rs 16.91 billion. About 75 per cent of the entire investment in tourism sector is being done in hotel sector. The data shows that yearly investment in hotel sector only in 18 per cent while only 18 per cent of investment can be seen in other sectors of tourism.

 

As a positive impact of Nepal Tourism Year 2011, the investment in hotel industry have started to boom. Stars hotels in Kathmandu are investing over Rs1 billion to build up their capacity and upgrade the facilities. Most of four stars hotels in the country are working hard upgrading themselves by adding new rooms and uplifting their amenities. It was crucial for such investments in hotel industry to cope up with the increasing numbers of tourist entering into Nepal. 

 

According to the information from Ministry of Tourism and Civil Aviation, the hotels in Nepal have the capacity to accommodate around one million tourists at present. Similarly hotels are boosting up their occupancy level to accommodate the expected number of tourist. 

 

The existing five star property Hotel Soaltee Crowne Plaza has renovated 130 rooms. It is replacing the TVs in all its rooms with 42 inch-LCD TVs. Similarly Radisson has already added 100 rooms. According to the hotel, the new rooms will be spacious and have contemporary looks, lighting and furniture. Hotel Yak & Yeti is giving a new look to 150 rooms in the Durbar Wing while the Everest has renovated 40 of its 160 rooms. Hotel Annapurna is now working to refurbish its 150 rooms. The record number of tourist in year 2010 has made hoteliers optimistic to pick up the pace. 

 

 

Home Stay System 

The concept of home stay program is considered to be the best alternative to hotel accommodation in the hospitality industry. Basically home stay systems are planned to increase the flow of tourists in the villages or the remote areas where the hotels are not established. But these days the home stay systems are also being urban centered. Around 60 per cent of investments of home stay system are being done around the city in the areas like Kavre, Sitapaila, Dhulikhel etc. 

 

Tourists’ inflow 

According to the data provided by economic survey FY 2012, Ministry of Finance, the rate of tourist arrival in Nepal has increased by 9.08 per cent by 2011 to 2012. A total of 7,36,215 tourist entered to Nepal in the year 2011 which increased to 8,03,092 in 2012. 

 

Though the number of tourist visiting to Nepal has been increasing, their average stay in Nepal has been decreased by 0.25 percent this year.

With the increment of tourist in the country, the hotel industry doesn’t have to see backward. Experts in the hospitality industry opine that the establishment of hotel in the area becomes the major root for the urbanization. Prasidha Bahadur Panday, former president of Hotel Association of Nepal (HAN) said that the hotel business will flourish more in upcoming days as the tourist offer first priority to lodging. The government of Nepal has prioritized tourism sector and started implementation its announcement to provide the same facilities to this sector as provided to any industry