Spending by domestic visitors accounted for 71.5% of total tourism spending in the country in 2023, according to WTTC.

 Tamish Giri

For many years, foreign tourists were the primary drivers of Nepal’s tourism landscape. Tourism entrepreneurs prioritized marketing and promotion activities in the international source market accordingly. However, as more Nepalis began exploring their own country, there has been a paradigm shift in the industry, with domestic visitors now emerging as the biggest spenders.

The recent report of the World Travel and Tourism Council (WTTC) shows that domestic visitors have been the biggest spenders in the Nepali tourism industry over the past few years. According to the report, domestic tourists spent Rs 210.8 billion in 2023, with the figure expected to rise to Rs 226.8 billion in 2024. Domestic visitor spending accounted for 71.5% of the total tourism spending in Nepal in 2023, as stated by the WTTC in its report. The report shows that international visitors spent about Rs 83.9 billion ($633.7 million) in 2023, and this figure is expected to rise to Rs 102.6 billion in 2024. Of this spending, 83.4% was directed towards leisure activities, with the remainder spent for business purposes.

In 2019, domestic tourists accounted for 61.7% of the total tourism spending in the country, while international visitors accounted for 38.3% of the spending. By 2023, spending by domestic tourists constituted 71.5% of all tourist spending, while the share of international tourist spending fell to 28.5%. The surge in domestic tourism and their spending capacity has brought relief to Nepal's hospitality industry as it tries to overcome impacts of the Covid-19 pandemic. As more Nepalis explore destinations beyond the traditional leisure spots such as Pokhara, Chitwan, Lumbini and Nagarkot, engaging in activities like trekking, motorbiking, pilgrimage and heritage site visits, domestic tourism is becoming the backbone of the Nepali hospitality sector. Although there are no precise statistics on the movement of domestic tourists, government agencies estimate that over 3 million Nepalis embark on domestic trips each year.

"Domestic tourism was expected to rise due to expanded roadways and improved access to transportation, coupled with increasing disposable incomes," said Ashok Pokhrel, a leading tourism entrepreneur. "The large number of domestic travellers is simply because there are significantly more domestic tourists than international visitors." The increase in domestic travel is largely attributed to the higher spending power among local consumers. Along with income growth, infrastructure development and improved transportation facilities have played crucial roles in boosting domestic tourism. Many trekking areas now have accessible roads, and hotels and restaurants have been built to attract both foreign and Nepali visitors. 

In the past decade, Nepal saw the opening of hotels not only in major destinations like Pokhara and Chitwan but also in other towns such as Birtamod, Itahari, Biratnagar, Butwal, Bhairahawa, Nepalgunj and Dhangadi. According to tourism entrepreneurs, these new properties, along with the growth of the middle class and improved road networks, are driving a surge in domestic tourism. They believe the greatest momentum came after Covid-19 restricted international tourists but encouraged domestic travellers to explore the country.

Additionally, pilgrimage travel within the country has seen significant growth. Local tour operators are organising planned trips to popular pilgrimage sites such as Muktinath of Mustang and Halesi of Khotang and Manakamana of Gorkha, among others. Each year, more Nepalis are visiting these religious places. Promotional efforts aimed at domestic customers, especially during New Year and Dashain-Tihar holidays, are also driving Nepalis to travel to domestic tourist spots. While some tourism entrepreneurs question the accuracy of these figures, Bijaya Amatya, CEO of Kora Tours, said that domestic tourism generally surpasses international tourism in most countries. However, former CEO of Nepal Tourism Board, Deepak Raj Joshi, expressed scepticism about higher spending by domestic travellers compared to foreign tourists. “The expenditure of foreign travellers is not well accounted for," Joshi shared.

Pankaj Pradhananga, director of Four-Season Travels, said spending of domestic travellers surpassing that of international travellers could imply that the outbound expenses of students and migrant workers could also have been added to total spending. “Otherwise, I find it hard to believe that domestic travellers' spending within Nepal exceeds that of international tourists," Pradhananga added. The growth in the share of domestic tourist spending, according to Joshi, can be attributed to approximately three million domestic travellers compared to around one million international visitors. He added that spending by international visitors at unregistered service points and through informal economic channels may not have been adequately accounted for in the national tourism accounts. "A true Tourism Satellite Account (TSA) can provide a more accurate picture, which I believe is currently in development. Nevertheless, the low spending patterns of international visitors remain a significant concern and require thorough examination," Joshi added.

Pokhrel, however, said that the fact that more than 70% of total tourist spending is coming from domestic tourists is a positive indicator. However, travel trade entrepreneurs concur that the Nepali tourism industry cannot survive on domestic tourists alone. "There are significant high-value investments in airlines (STOL), luxury hotels and resorts, and transportation that heavily rely on international travellers. Both types of tourism need to be promoted and encouraged," said Pokhrel. The WTTC projects that Nepali domestic tourists will spend Rs 226.8 billion in 2024 and Rs 325.3 billion by 2034. In contrast, spending by foreign tourists is estimated to be Rs 102.6 billion in 2024 and Rs 166.9 billion in 2034.

Pokhrel suggests that Nepal should focus on economic diplomacy and implement reciprocal visa arrangements. Drawing on the example of Singapore, where Nepali nationals do not require visas, Pokhrel said that Nepal could extend the same visa-free access to Singaporean nationals. "They could arrive at Nepali airports and stay for up to 30 days," Pokhrel added. Tourism entrepreneurs regard foreign tourists as a crucial source of foreign exchange that can significantly contribute to the GDP. They say promoting Nepal as a leading global travel destination is essential to sustain and grow this important revenue stream. "We must provide high-quality experiences to encourage tourists to spend more," said Amatya.