Tourist spending decreases despite increase in arrivals

Published On: September 12, 2017 07:59 AM NPT By: Arpana Ale Magar

Cut-throat competition among hotels behind low tourist expenditures: Entrepreneurs

KATHMANDU, Sept 12: Nepal has welcomed around 500,000 tourists in the first half of 2017, signifying an increasing trend in tourist arrival over the past few years. 

Tourist arrival had stood at 359,672 in the first half of 2016, whereas the number was 238,591 for the same period in 2015. 

However, despite the increase in numbers, tourists are spending less these days, government data shows. According to the data compiled by the Ministry of Culture, Tourism and Civil Aviation, a tourist spent US$ 68 per day on average in the Fiscal Year 2015/16, whereas they spent only US$ 52 in the Fiscal Year 2016/17. 

Nepal has never seen remarkable expenditure from the tourists ever since 2000. According to Nepal Tourism Statistics 2016 prepared by the ministry, Nepal had witnessed comparatively higher expenditures in fiscal years 2002/3 and 2008/9 when each tourist spent US$ 70 and US$ 79 per day on average, respectively.  

Entrepreneurs have said that although the arrival numbers were important, the amount they spent here mattered more. 

In recent years, the tourism industry has been flourishing in the country. The number of hotels and resorts has been increasing massively of late. However, tourism entrepreneurs are not upbeat about it. 

According to Vinayak Shah, spokesperson for Hotel Association Nepal (HAN), the Nepali tourism sector is witnessing over supply and less demand these days.

“These days the number of hotels and resorts is increasing and so has the competition among them,” Shah said: “The increasing number of hotels has provided different options to the tourists. Obviously, they go to the hotels that provide them good services at minimum costs.”
Sudarshan Neupane, treasurer of Nepal Mountaineering Association (NMA), also said that hotel rates have been decreasing these days. 

“An unhealthy competition among the hotels is the reason behind less expenditure by the tourists,” he said: “Short stay and availability of different options have reduced the tourist expenditure. Hotels compete to provide better service at lower price.”

Apart from the cut-throat competition among the hotels, various travel packages provided by the travel agencies is also a reason for decreasing revenue from the tourists.

“Travel agencies are giving travel packages in coordination with hotels and resorts. To increase the number of customers they reduce their service charge, resulting in decreased tourist expenditure,” Neupane said. 

According to Neupane, tourists who used to pay up to US$ 1500 for a trekking package, but these days they are paying no more than US$ 800. Expenses under other titles have also decreased, he added. Tourists’ expenditure matters as much as the tourists’ arrival, since it contributes to our economy, he said.

Decreasing of tourist expenditure is affecting tourism revenue, which directly contributes to the country’s economy. Entrepreneurs say that the government should come up with appropriate policies to ensure balance in the demand and supply sides.

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