By Tamish Giri

When China included Nepal in its list for outbound group tours on March 15, 2023, Nepali tourism entrepreneurs were filled with high hopes for an influx of tourists from their northern neighbour. However, one year later, these hopes have yet to materialise, with no significant increase in arrivals from China.

Despite the reopening of outbound travel for Chinese citizens, the numbers have not reached pre-pandemic levels, even though there has been an increase compared to 2022 and 2021. Nepal welcomed only 60,878 Chinese tourists in 2023.

Nepal received a monthly average of 7,367 arrivals from China over the past five months, from October 2023 to February 2024, with February marking the highest figure of 9,180 Chinese tourists.

Before the COVID-19 pandemic-related travel restrictions in early 2020, China was the largest source market for Nepal after India. In 2019, Nepal welcomed 169,543 Chinese tourists, contributing to a total of 1.19 million foreign tourist arrivals. However, Chinese arrivals drastically declined to 19,257 in 2020 and further plummeted to 6,198 and 9,599 in 2021 and 2022, respectively, due to the pandemic-related restrictions.

The downturn in Chinese tourist arrivals has had a stark impact on Nepal's travel businesses. Travel agencies that previously facilitated the arrival of around 1,000 Chinese tourists per month are now only bringing in 100-150.

Bishwesh Shrestha, the executive director of C&K Nepal Travels, said that his company, which used to handle 800-900 Chinese tourists in Nepal every month before COVID, is now bringing in around 100-150 per month. According to Shrestha, his company, serving predominantly Chinese tourists, is handling only 15% of the Chinese tourists at present compared to 2019.

Similarly, Kalyan Raj Sharma, managing director of Adventure Outdoor Excursion, which specialises in Chinese tourists, has also experienced a decline. Sharma said that his company only received around 2,000 Chinese nationals in 2023, reflecting the broader trend of decreased Chinese tourist arrivals.

The influx of Chinese tourists in Nepal had been steadily increasing since China granted Approved Destination Status (ADS) to Nepal in 2022. Nepal first received Chinese group visitors in June of the same year. Nepal was the 18th country and the first in South Asia to get ADS status from China. Following this, Chinese restaurants began appearing in Thamel, Kathmandu, and Lakeside, Pokhara. Additionally, language centres started to offer Mandarin classes tailored for trekking guides, restaurant staff and salespersons.

In 2013, Chinese arrivals to Nepal surpassed the 100,000 mark for the first time, largely attributed to enhanced air connectivity between the two nations. Nepal received 123,805 visitors from the northern neighbours in 2014. However, in 2015, consecutive events – a devastating earthquake and an Indian blockade – resulted in a significant drop in arrivals from China, reaching a four-year low of 64,675 individuals.

To revitalise declining arrivals from China, on December 25, 2015, Nepal announced a 'free visa' policy for Chinese tourists, granting them the same privileges as South Asian visitors. Following this, tourist arrivals from China steadily increased. Nepal experienced robust growth, with a 46.8% increase in arrivals from China in 2018, reaching 153,633 visitors. The positive trend continued in 2019 with a record 169,543 Chinese tourists.

Travel trade entrepreneurs specialising in Chinese tourists say the growth has been hindered by the lack of promotional activities in China.

Travel trade entrepreneurs specialising in Chinese tourists say the growth has been hindered by the lack of promotional activities in China. According to them, Nepal's sales and marketing efforts in the Chinese market have not reached a level that would effectively attract Chinese tourists. While Nepali businesses actively participate in travel fairs in India, leading to increased Indian arrivals, similar promotional activities have remained stagnant in China.

Since the COVID-19 pandemic, Nepal has not undertaken any major promotional activities in China. Shrestha attributes the current Chinese tourist numbers solely to the efforts of private travel companies. "Promotional work in one of Nepal's largest source markets is currently at a standstill," he added.

Sharma, however, remains optimistic about Chinese tourist growth this year but points out that the inefficiency of the tourism body is affecting arrivals from China. Both Shrestha and Sharma agree that the lack of effective tourism promotion and marketing activities from the Nepal Tourism Board (NTB) targeting China has contributed to the slow growth in tourist numbers from the northern neighbour.

The NTB, Nepal's tourism promotional body, is currently without a leader and has failed to engage in tourism promotions in leading expos like ITB Berlin and WTM London. "We don't see the NTB going in the right direction. Tourism organisations and entrepreneurs are individually participating in expos for promotion, while the authority established to promote Nepali tourism is inactive," said Sharma.

Due to the unexpected stagnation in Chinese tourist arrivals, Chinese airlines have scaled back their flights to Nepal. Tourism entrepreneurs say flight frequency between the two countries at present is less than a third of the pre-COVID days. Shrestha says that if there had been an increase in Chinese tourist arrivals, Chinese airlines would have adjusted their flight schedules accordingly. Presently, there is a notable reliance on chartered flights between the two countries rather than regular scheduled flights, he added.

Sharma also noted that due to low tourist arrivals, flights to and from China have declined, resulting in drastic airfare increases compared to 2019. In 2019, there were 30 weekly commercial flights between Nepal and China, but this has been reduced to nine. "With the rise in airfare to Nepal, Chinese tourists have diverted to other destinations," Sharma added.

The negative news surrounding major tourist destinations like Pokhara and Lumbini, coupled with ongoing road upgrades making travel difficult, has adversely affected Chinese tourist arrivals. Besides Kathmandu, Pokhara and Lumbini, the birthplace of Buddha, are popular destinations for Chinese visitors.

Although the government recently declared Pokhara as the tourism capital of Nepal, Shrestha said it is unlikely to significantly impact Chinese tourist arrivals. Tourism entrepreneurs like Shrestha say the announcement lacks substance without improvements to infrastructure and tourist programmes. He emphasised the need for tangible initiatives like free bicycle rentals and Wi-Fi to make the designation meaningful.

Another concern is the profile of current Chinese tourists visiting Nepal. According to Shrestha, the Chinese nationals currently visiting Nepal are predominantly budget travellers with very few opting for five-star accommodations.

Additionally, Nepali travel businesses bringing Chinese tourists face challenges from Chinese tourism operators based in Nepal who bring in their own clients. Shrestha warns that if authorities don't address this issue promptly, it could lead to market collapse.

While domestic tour operators contribute to the state coffer, Shrestha said that transactions by Chinese tour operators through platforms like WeChat do not benefit the country. He calls for regulating Chinese tourism businesses operating illegally in Nepal to protect local business interests and ensure proper oversight.

Tourism experts also urged the government to expedite road upgrade works on the Mugling-Pokhara road and the Narayanghat-Butwal stretch of the East-West Highway. Additionally, they called on the government to facilitate the operation of international flights in Pokhara and Lumbini and launch effective promotional campaigns in China.