#COVID-19 Pandemic

Only 30 percent of hotels and restaurants operating in their full capacity: NRB report

Published On: January 14, 2021 06:50 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 14: Around 70 percent of the hotels and restaurants have still failed to operate in their full capacity even as the economy is already heading on the path of recovery after severe impacts of COVID-19.  

It has almost been four months since the government adopted a policy to loosen the economic activities after the outbreak and rapid spread of the COVID-19. Recently, the government has also allowed opening of hotels and restaurants until late evening. And, the movement of domestic visitors has also increased during the festivals like Dashain, Tihar, Christmas and the English New Year 2021.   

Despite increased economic activities, over 23 percent of the hotels and restaurants have remained closed while nearly 47 percent others have been operating in under capacity, according to a survey report unveiled by Nepal Rastra Bank (NRB) on Tuesday. 

The sector, however, has shown a silver lining in the recovery of its businesses. According to the NRB, around 91 percent of the hotels and restaurants had remained closed in the first three months of lockdown imposed on March 24.

The survey study of 604 industries carried out by the central bank shows that the production businesses are still struggling to recoup in their positions prior to the lockdown. As of now, only around 54 percent of the industries are operating in their full capacity.   

Nevertheless, many industries have resumed their businesses. The survey carried out in June showed that around 61 percent the production businesses had remained closed at that time. Now, only nine percent of these enterprises have failed to come to operation. While the production level of the firms has doubled to 50.51 percent, the employment level has gone up from 77.50 percent to 87.51 percent.

Mainly, the slow recovery is seen in cottage and small industries that are opened with a capital investment of less than Rs 150 million. Around 17 percent of the cottage industries and 14 percent of the small businesses have still remained closed.

The NRB survey report shows that a heavy fall in market demand is the main problem faced by the business enterprises. The firms have also complained that the soaring operating costs and failure to get refinance facilities are among the major problems seen in the revival of their businesses. 


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