Upbeat about tourism, pvt sector pours money in hospitality sector

KATHMANDU, March 22: As the government accords high priority to infrastructure projects to woo foreign tourists and investors, the private sector is increasingly attracted to the hospitality industry. There are about a dozen star-rated hotels, including four of five-star standard in the pipeline, targeting high-end tourists. The existing hotels are expanding their capacity, too. Talking to Republica, President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Suraj Vaidya said that most of Nepali investors have shown interest in hospitality business in recent days. “A lot of businesspersons are talking about opening hotels these days as they expect rise in the number of tourists following the government´s plan to build different infrastructure projects, including Tribhuvan International Airport expansion project and regional airports,” added Vaidya. Infrastructure is a major bottleneck when it comes to the flow of tourists. Three hotels in affiliation with international chains are in the pipeline. Industrialist Sashi Kanta Agrawal is preparing to establish a three-star hotel in Thamel and another five-star hotel in Naxal in association with Marriot International. Agrawal said that the construction of both the projects has started, and that they will cost Rs 3.8 billion in total. “We decided to institute both hotels assessing the prospect of tourism growth,” said Agrawal, adding that the number of foreign tourists is likely to grow by three times within the next five years. However, nobody has constructed a five-star hotel in the country after Hyatt Hotel was completed back in 2000. Agrawal further said that businesspersons are upbeat about the tourism sector as different international reports have also listed Nepal as a favorite destination for tourists. Another five-star hotel is in the offing, too. It is being promoted MIT Group Holdings, in association with Sheraton Hotel, another international chain of hotel. Sesh Ghale, President of Non-Resident Nepali Association (NRNA) is one of the promoters of MIT Group Holdings. NRNA had announced yet another five-star hotel in the country during its sixth global conference in Kathmandu in October. Another five-star hotel named Chhaya Center, also with all facilities of a shopping complex, is in the pipeline in Thamel area with an investment of Rs 3 billion. According to FNCCI officials, eight proposals of hotels and resorts targeting high-end tourists will be floated to foreign investors in a business conclave slated for Sunday and Monday in Hyatt Hotel. The total project worth is about Rs 8 billion. It is said that new project proposals also include of boutique resort and wellness hotel targeting high-end tourists. Ananda Raj Mulmi, former president of FNCCI, stresses on the improvement of infrastructure, better facilities for tourists and programs to increase per capita spending of foreign tourists. Foreign tourists spend only US$ 34 per day in Nepal which is one of the lowest among the South Asian destinations, said Mulmi. He also suggested that investors should devise a holistic approach while planning hospitality projects instead of merely focusing on the capital city. However, Vaidya doubts whether investors vying for hotel projects have assessed the market well. Citing huge investment in sectors such as ready made garment, carpet and real estate, hydropower, banks and financial institutions in the past two decades, he added, “Unfortunately, not many of such investors could sustain their businesses.” Ropeway is also another attraction for the investors as there are about half a dozen ropeway projects being developed in different parts of the country.

REPUBLICA