Tourism Resurgence and Carriers
By madan lamsal and keshav gautam
Francesco Frangialli, the Secretary-General of the World Tourism Organization, had once remarked that tourism not only has a unique resilient characteristic that enables it to brave all odds but also has the potential to bounce back. Performance of Nepal's tourism industry in 2007 has once again proved that he was absolutely true to make such a remark. The number of foreign tourist arrival in the country that was plummeting after reaching its peak with 491,504 arrivals in 1999 shot up in 2007 and reached 513,350. Arrivals by the land route are not added to the 2007 figure.
Meanwhile, the number of airlines operating flights to and from Nepal has increased substantially and this resurgence in the number of airlines serving Nepal is credited to a large extent for the resurgence in the tourist arrival as well.
According to figures released by Nepal Tourism Board (NTB), arrivals of 2007 by air is a whopping growth of more than 27% compared to 2006 when the figure stood at 283,516. Compared to the lowest arrivals of 275,468 in 2002, the last year's number is really something to cheer about. As a result, the hotel companies listed in the stock exchange have reported a growth in their net profits or whopping reduction in the losses compared to the previous years. From January 2008 they have also raised the rates they charge to the travel agencies though tariff rates as mentioned in the hotel brochures are the same.
This encouraging growth in the arrivals of the tourists has instilled confidence among the tourism entrepreneurs that they will be welcoming one million foreign tourists by 2010.
Amidst the cheer, there are voices of caution as well. For example, the arrival of Indian tourists, who normally constitute about one third of the total arrivals, grew only by 2.7 percent in 2007 compared to 2006. The trend in the first month of 2008 was still worrisome as the Indian arrivals declined by 13 percent over the same month previous year. Moreover, while the arrival from China has increased sharply, the total number of Chinese tourists is still minuscule, which points to the need to do a lot in that market. Insufficient air connectivity and lack of visa offices in the major cities are cited as the major hurdles to prevent the Chinese from coming to Nepal in droves.
Added to it is the problem of insufficient infrastructure at home. Some big as well as small hotels had closed down in the past years when tourism was stagnating. That has resulted in the reduction of the hotel beds in the country. Some of the closed down hotels have reopened (e.g. Bluebird of Pokhara has reopened as Hotel Grand under new ownership and management) and some others are reportedly planning to reopen. The former hoteliers are reportedly preparing to set up new hotels. However, the hotel bed shortage will still be there, particularly in the peak seasons, say the industry analysts.
The constraints at the Tribhuvan International Airport are pointed out as the other major bottlenecks. With the resurgence of the tourism, a large number of foreign airlines have started flight services to Nepal. Now they are planning to increase the frequency of flights. While Air Arabia and Etihad Airways started flights creating more air seats from the Gulf region, China Southern Airlines, Dragonair, Hongkong Express, Korean Airlines, Orient Thai and Silk Air started providing increased connectivity to the Far East and South East Asia. Added to the list was GMG Airlines which flies in from Bangladesh.
Meanwhile, Cosmic Air that had halted international flights for some time has resumed its service to India. Additionally, airlines like Jet Airways, Qatar Airways, Indian Airlines and Air China that were already flying to Nepal have also increased their flight frequencies. Yeti Airlines International, in collaboration with Air Arabia, has recently started flights under the name flyyeti.com to Malaysia and Sharjah. It plans to bring in more planes soon. The airline has received permission to fly to 14 destinations covering Asia and the Middle East. Still the travel agencies say the people willing to come to Nepal are finding it difficult to get the seats. This problem is bigger in Kathmandu-Delhi-Kathmandu sector, according to them.
However, increased number of airlines coming to Nepal has created a heavy congestion in the airport causing a number of craft to stay hovering around the Kathmandu sky waiting for their turn to make a landing. The government has speeded up the process to develop the Bhairahawa airport (near Lumbini) as a regional international airport and to construct a new international airport at Nijgadh in Bara district. However, the developments in this regard are still at the planning stage.
The airport congestion problem is however more of managerial in nature and its solution may not need huge investment like building a new airport, think some industry analysts. For example, the problem is mainly during the day and it can be reduced if airlines are allowed to land and take off during the night, they say.
Despite the increase in the number of Nepal bound airlines and whether the new international airport is developed or not, the country will still face problems in the international marketing. At present, the challenge is in marketing in India as the increase rate in the arrival number via India was very low in 2007. Nepal Tourism Board (NTB), the national promotional body has formulated a number of strategies for marketing in India (see an article by NTB's new CEO Prachanda Man Shrestha in Nubiz January 2008 issue).
As regards promoting Nepal in other markets, Nandini Lahe Thapa, the Director, Tourism Marketing & Promotion in NTB, says while it will focus on promoting spiritual tourism (e.g.. meditation tourism), it will also be strongly promoting Nepal also as the birthplace of Lord Buddha. "Till now Lumbini is promoted as the birth place of Buddha and very easy border formalities makes tourists feel that Lumbini is a part of India. That has to be changed," she says.
One major constraint in Nepal in promoting the country as international tourism destination is the lack of budget. But the new CEO of the NTB said in an interview with Abhiyan weekly (a sister publication of Nubiz) that lack of budget has been an easy excuse for those who try to avoid the work. This indicates that there will be a lot of creative promotional activities from the Board this year onwards.
One important development is the growing realisation that the benefits of tourism should spread wider across the country. Almost everybody in the tourism industry now agrees that one of the major reasons for the conflict that the country went through was the unequal distribution of the benefits of economic growth.
SWOT Analysis of Nepali Tourism
Strengths
• Natural advantage due to geography: mountaineering, trekking, wild life.
• Rich cultural diversity
• Indian market: proximity and easy access
Weaknesses
• Tribhuvan international airport in Kathmandu remains the only entrance point for international air travellers. The geographical constraint of Kathmandu valley makes it especially challenging for large aircraft to land at the airport.
• Low seat availability: Air flights have increased but still the seat availability is lower compared to growing number of tourist arrivals. Plus there is an increased movement of Nepalis working abroad.
• The closure of almost all non-stop direct air access from Europe to Nepal has weakened the tourism industry.
• Local airports and flight availability to remote places.
• Marketing and research
• Lack of stability and security. Some countries have not stopped issuing travel warning to their citizens. Strikes and general closedowns have had a negative effect on the industry, tourist infrastructure and services have also suffered loss.
Opportunities
• China, South Korea emerging markets. China expected to be the world's largest generator of outbound tourists by 2020.
• Religious and spiritual tourism
• Rural tourism
• Peace treaty between the Government and the Maoists
Threats
• Other eco-tourism destinations
• Environmental degradation (garbage on the streets and deforestation and its negative impact on wildlife and natural scenery, two of the main tourist attractions. |
Challenge to Sustain Arrival Growth
By Prachanda Man Shrestha, CEO, NTB
There is no question that we have to sustain the growth trend of 2007 in the tourist arrival number in the years to come. The only thing is that there are quite a few challenges.
Basically, I see three challenges. The first is infrastructure upgradation, the second is supply capacity and the third is management efficiency so as to bring about visitor satisfaction. In fact, sustaining visitor satisfaction is more challenging than sustaining the growth. Sustaining growth and visitor satisfaction go together. If we can sustain visitor satisfaction then we can automatically sustain growth.
Nepal witnessed a 27% growth (by air only) in 2007 compared to 2006. Now, if we are to sustain the same growth rate over the next three years (2008 through 2010) then it is necessary that we address the three challenges - infrastructure constraint, supply capacity from ground handling to hotel rooms and maintain visitor satisfaction through improved quality services, qualified human resource etc. If the number of visitors increases then the existing human resource may not be sufficient to deliver quality service.
In this regard, Nepal has two types of tourism - site specific and activity specific. Site specific tourism refers to the places that tourists visit like Bhaktapur, Pokhara, Hanuman Dhoka and so on. However, the problem lies in the fact that the agencies or organizations like VDCs, DDCs, Municipalities, Tourism Development Committees and other such bodies responsible for maintaining the attractive elements of that particular site are not geared up enough to carry out their function. Therein lies the problem. Similar is the case when it comes to activity specific tourism like trekking, rafting etc.
Tourist Arrival in Nepal (By Air Only)
Calendar Year: 2006-2007 |
Country of Nationality |
January-December |
% Change |
% Change |
2006 |
2007 |
ASIA (SAARC) |
|
Bangladesh |
5,229 |
7,892 |
50.9% |
2.2% |
India |
95,271 |
96,275 |
1.1% |
26.7% |
Pakistan |
1,931 |
2,566 |
32.9% |
0.7% |
Sri Lanka |
856 |
1,303 |
52.2% |
0.4% |
Sub-Total |
103,287 |
108,036 |
4.6% |
30.0% |
|
ASIA (OTHER) |
|
|
|
|
China |
6,531 |
14,426 |
120.9% |
4.0% |
Japan |
18,574 |
21,989 |
18.4% |
6.1% |
Malaysia |
3,141 |
4,027 |
28.2% |
1.1% |
Singapore |
1,872 |
3,185 |
70.1% |
0.9% |
S. Korea |
7,002 |
12,513 |
78.7% |
3.5% |
R.O.C( Taiwan ) |
3,286 |
4,412 |
34.3% |
1.2% |
Thailand |
3,632 |
5,247 |
44.5% |
1.5% |
Sub-Total |
44,038 |
65,799 |
49.4% |
18.3% |
|
EUROPE |
|
|
|
|
Austria |
2,596 |
3,087 |
18.9% |
0.9% |
Belgium |
2,644 |
3,975 |
50.3% |
1.1% |
Denmark |
1,534 |
2,683 |
74.9% |
0.7% |
France |
12,528 |
16,770 |
33.9% |
4.7% |
Germany |
12,098 |
16,920 |
39.9% |
4.7% |
Israel |
2,836 |
3,630 |
28.0% |
1.0% |
Italy |
6,834 |
9,193 |
34.5% |
2.6% |
Netherlands |
4,888 |
6,781 |
38.7% |
1.9% |
Norway |
1,119 |
1,608 |
43.7% |
0.4% |
Switzerland |
2,770 |
4,098 |
47.9% |
1.1% |
Spain |
9,291 |
13,000 |
39.9% |
3.6% |
Sweden |
970 |
1,504 |
55.1% |
0.4% |
U.K. |
19,292 |
26,814 |
39.0% |
7.4% |
Sub-Total |
79,400 |
110,063 |
38.6% |
30.5% |
|
OCEANIA |
|
|
|
|
Australia |
6,762 |
9,615 |
42.2% |
2.7% |
New Zealand |
1,151 |
1,467 |
27.5% |
0.4% |
Sub-Total |
7,913 |
11,082 |
40.0% |
3.1% |
|
AMERICAS |
|
|
|
|
Canada |
3,751 |
5,718 |
52.4% |
1.6% |
U.S.A. |
16,886 |
24,576 |
45.5% |
6.8% |
Sub-Total |
20,637 |
30,294 |
46.8% |
8.4% |
|
OTHERS |
28,241 |
35,076 |
24.2% |
9.7% |
Total |
283,516 |
360,350 |
27.1% |
100.0% |
Compiled & Analysed by: Nepal Tourism Board
Source: Immigration Office, TIA and MoCTCA |
Enthusiasm of half a million tourists
By Prasidha Panday
The year 2007 resulted to be an encouraging year for the country’s tourism sector with some cheering indications. The number of tourist arrivals crossed half a million mark. But this growth has, at the same time, set a new challenge—a challenge to maintain the growth in the years to come. The disturbances in different parts of country which we have been experiencing for about a year may again damage the sector if sincere efforts are not made to address them in time.
However, many feel that time has come to give this growth a further impetus and try to have one million tourists within a couple of years through different mechanisms like organizing national campaign such as Visit Nepal and so on. But a policy alone wouldn’t suffice to meet the target. We should prepare our domestic capability to service those numbers of tourists. We need to build and prepare necessary infrastructure like increasing the numbers of hotel rooms and renovating the airport. Also we have to ensure that national campaigns like these have a wider reach to the poor. In other words, the poorest of the poor should have their shares in the benefits the country achieves through tourism.
Attitudinal changes among the villagers have been noticed in the recent years. Earlier they had a notion that tourists visit their villages only during Visit Nepal Year. Their competitive attitude might act as a catalyst in terms of attracting larger number of tourists in their villages. Instead of relying on hydropower alone for the economic development of the country, efforts must be made to promote tourism in a massive scale. It would take a longer time and larger amount of fund to harness hydropower. As such, tourism can provide much faster relief to the economic downturn. We only have to think about ways to increase the numbers that we had in 2007. I think such an increase is attainable.
Target: 1 Million Tourists
After the success of Visit Nepal Year 1998, the private sectors went ahead to add infrastructure in the anticipation that the trend would continue. It is noteworthy to mention here that about half a million tourists visited Nepal during 1999. But the tourist arrivals began to fall following 2001 owing to the political instability and growing violence in the country.
Participation of private sector in building infrastructure yielded marvellous results within four or five years. We had the basic infrastructure to cater to the targeted number of tourists. But unfortunately, political and economic turmoil the country went through in the following years led to the closure of some hotels. However, in a way, we still have the capacity to accommodate 1 million tourists. Another major area we need to look upon is to increase the ‘fleet-holding capacity’ of our international airport and make it a 24-hour airport. Similarly, emphasis should also be laid on urban planning making the roads more open and wide. These are the supply side. We need to look into stimulating demand side as well. For that we should market our country as one of the best tourist destinations. We have witnessed an increase in the number of tourist visiting Nepal even during the time of bandhs, strikes and other major political demonstrations. This speaks of the popularity of Nepal as an ideal tourist site for many. Moreover, peace process has already taken momentum though the desired shape is yet to come. Therefore, we need to capitalize on the achievements so far and start a global marketing campaign that makes name “ Nepal” synonymous with safe and exhilarating tourist destination.
New Trends
The eagerness witnessed among the international airlines to enter the Nepali market and the large numbers of tourists we were to attract last year have been highly encouraging developments. We have received numerous inquires from the international community regarding the upsurge in the number of tourists. Among the airlines willing to enter the Nepali market are Kingfisher Airline, Malaysian Airlines and Air Asia. Some European airlines are also showing their interest. All this has changed the image of our country across the world. Now as I have heard, more airlines are eager to come to Nepal. Similarly, some foreign travel agencies too are planning to come to Nepal.
In the domestic front, we have been hearing the Tourism Minister saying about the plan of building an international airport at Nijgadh. Similarly, Hetauda-Kathmandu fast track road is also on the pipeline. National Planning Commission has already put it in its programme. Moreover, the government is also planning to build regional international airports at Pokhara and Lumbini. Some hotels that were shut down during the period of tourism downturn have either reopened or are planning to reopen. We in Shangri-La are thinking of going ahead with the plan of building hotels in the lands we have acquired in Chitwan and by the side of Begnas Lake near Pokhara if the surge in the tourist arrival witnessed in 2007 sustains.
To support the private sector’s such enthusiasm the government should indulge itself in building necessary infrastructure like building airport, expanding road connectivity, organizing national campaigns like Visit Nepal. When the government undertakes such activities, it will soon be followed up by the private sectors by adding rooms, building new hotels and so on. Nepali people as a (whole not only the tourism entrepreneurs) will benefit from such national campaign. Once it was calculated that one tourist can create employment to nine locals. As such, one million tourists will create employment to nine million people.
Tourism is the sector that can make the economy vibrant very soon. So, I think only the tourism sector can be the backbone of our economy. We have not been able to do anything in hydropower sector which is supposed to be as important as tourism. But tourism sector has already proved how it can support the economy. The rate of retaining the earning is very high in tourism. Therefore, it can lift the economy very soon.
Decline in Indian Arrivals
Despite very high growth in overall number of tourist arrival in 2007, the Indian arrival has declined and I think it is because NTB is still following old practices to attract Indian tourists. Despite participating in various international trade fairs, NTB has not been successful in undertaking any commendable programme. NTB should open a permanent office in India and organize various promotional programmes there from that office. Since the news from Nepal travels very fast to India, we feel that the lack of an official Nepali tourism body to take care of such news, filter them and disseminate clarifications is the reason for the dismal rate of growth in the arrivals of Indian tourists. We also don’t have any networking with New Delhi, Chennai and Mumbai corridors.
Rebranding
Voices are being raised to come up with a new brand for Nepal as a tourism destination. But as we have not till now reached the saturation point of the existing brand, I think there is still no need of rebranding. We should go for new branding only after the tourist arrival reaches three or four million. The existing infrastructure is already enough to accommodate one million tourists. As the tourist arrival continues to go up, the additional capacity will be automatically created to accommodate the additional guests. The existing infrastructure is created by the private sector alone with a very few exceptions. Therefore, it is now the turn of the government to expand infrastructure. At least the government must have a vision that is at par with that of the private sector. Though NTB was established with that very mission, it is unable to live up to that mission.
Domestic vs Foreign Tourists
Tourism is not only about international tourism. In India 60 to 70 percent of contribution is from domestic tourism. We haven’t yet started domestic tourism in a proper way. Now a trend has started towards promoting it, which is a very good sign. If it can contribute only up to 20 to 30 percent in overall tourism revenue, it will be very good. Talking about Hotel Shangri-La, domestic business contributes sizable amount in its food and beverage sales. Different banquet, parties and corporate events contribute 20 to 40 percent.
Hotel Rate Debate
Following the surge in tourist arrival, the top-rated hotels have revised their room rates by some 20-30 percent. Other hotels which had decreased their rates significantly during the down phase of tourist arrival have now doubled or even tripled the rates. The travel agencies are protesting against it. We, hoteliers request the travel agents not to forget that the previous rates were very low – lower than the cost. We had to surrender the rates to the travel agents in the past. If we are compelled to continue selling below the cost, it will be unfair. Such cases in other countries attract the competition law. It will also have negative impact in other sectors as well. If hotels continue selling at the rate lower than the cost, it will hamper the service quality. As a result, the quality of the package that the travel agents sell will deteriorate. It is not a win-win situation. I believe most of the travel agencies understand it.
Change in tourist pattern
The number of high spending tourists is going up. This year I have heard that series of incentive tourists are arriving. They are high paying ones. They are coming from Europe ( France, Germany, Italy, Spain etc.). The number of Americans too has increased but it is not as much as that of the Europeans.
(Based on conversation with Panday, the MD of Hotel Shangri-La)
Nepali Tourism: Slogans sans Policy
By Ashok Pokharel and Shikhar Prasai
We are now talking of inviting one million tourists in a year. But we hardly think about the need of a policy and infrastructure to meet the demand of one million tourists.
Let’s begin from the international airport. Though our international airport has a capacity to handle much higher number of tourists than it is handling today, poor management of the essential services there irritates the tourists. There are 15 counters set up to handle the immigration formalities. But most of them remain closed. Only a few immigration personnel are available. All these counters should be open. If the problem is that of insufficient staff, their number should be increased and if they are not trained to handle the immigration, they should be provided needed training and orientation. It is not a difficult job to train them. It is not like buying aircraft or building a new airport.
We have been listening since long time about the plan to build a new international airport at Nijgadh. It is good if a new airport is built. But that is a long term project. A new airport alone is not sufficient. The infrastructure surrounding the airport should also be sound.
When the government is not able to run properly the existing airport, how we can believe that it will make new one and run it properly. Other international airports have double runways, but we have a single runway. It is not difficult to make second runway at Tribhuvan International Airport itself.
Our roads are not well maintained. There is lack of sufficient public spaces suitable to handle one million tourists. In 2007, we received half a million tourists and all the hotels were sold out. To double that number of tourists we must double the capacity of our hotels. In other words, we cannot accommodate one million tourists with the available infrastructure.
According to the data officially being circulated, we have capacity to handle 1.6 million tourists in a year. But that number is arrived at by an arithmetical magic. The number of the beds available in the hotels is multiplied by 365 days to come up with this figure. Therefore, this is not a logical calculation.
The special feature of our tourism is that there are peak and lean seasons and they are our advantage as well as weakness. There is always a great demand for more beds during October-November. This period is special not only because the main festivals of the country fall during this period (there are festivals in other countries too). The main reason for the peak in this period is that the views for which Nepal is famous in the world tourism market (and are not available in any other country of the world) are spectacular during this period.
Tourism & Slogan
Last year, the World Tourism Day’s slogan was “Tourism opens door for women”. Now a question arises: Did Nepal follow it? That slogan was very interesting. What is seen from the history of tourism in Nepal is that from July till the World Tourism Day is celebrated in late September, people talk a lot about the slogan, but after September nobody cares about it. One wonders whether the Ministry of Tourism endorses such slogans and if it does endorse it, whether it is incorporated in the Ministry’s policy. We have to ask whether Nepal has now really opened its door for the women travellers. If yes, where are the policies?
This slogan is timely and highly relevant in the present situation of Nepal. At present ‘inclusive’ has become a buzzword in Nepal. But such slogans cannot be incorporated in our national philosophy right away. Since such developments cannot happen overnight, we should groom it from grassroots right now so that after a certain period it could be incorporated. At present the involvement of women in tourism business is very limited. A trekking company called Three Sisters is operating in Pokhara led by three young ladies and a couple of hotels in Kathmandu have ladies in the leading position. Other than that, the involvement of women in this industry in Nepal is almost nonexistent. Yes, almost all the tour operators and travel agencies have equal employment opportunity policy. They hardly hire women as tour guides. The government should implement some policies which may guide the private sector to give priority to women while appointing new staff.
This year, the World Tourism Day’s slogan was “Tourism sector responds to the challenges of climate change.” An official stand of the government on it is sought for. Has the climate really changed? If it has changed, how serious is the problem for Nepal? The government must show the common people proven data. If the government shows such information, the tourism industry will certainly respond to it.
Definitely the pollution has increased. The number of vehicles plying along the roads in the cities and highways has soared up. But the state has not told us anything. The tourism industry has taken some initiatives like tree plantation. We realize that when we bring a tourist in Nepal, that will surely contribute to increase the carbon emission. We want to neutralize it and bring to zero. We want to adopt environment friendly practices, such as running environment friendly vehicles. But we don’t know whether what we are doing is just enough, more than enough or too little. If the problem is really serious, we may have to start asking every tourist to plant a tree or two or contribute a specified sum of money for that.
Reasons for Resurgence
The resurgence felt in the tourism arrival in 2007 is an immediate outcome of the ongoing peace process. Neither the government nor NTB did anything more for the growth of tourism. Only at the end of the year they did facilitate the entry of new airlines for which they may be commended because the process was expedited very quickly.
Hotel Rate Hike
Since January, the hotels in Kathmandu have increased their room rates and that has caused a debate. Some hotels that were selling at a low rate (say $30) have increased it to $120. Hyatt and Fulbari are the examples. Also Soaltee’s rate has gone up, but it had not lowered it much in the past. The hiked rate has really created problems to the tour operators. We as Nepali tour operators are honouring the same contract now that we had signed with our foreign counterpart tour operator when the cost of a litre of petrol was Rs. 57.
Role of airlines
In the recent past there was an acute shortage in air seat availability. In 2007, the seat availability increased substantially after a number of new airlines started flying into Nepal. However, contrary to the general belief, this has not resolved the problem. In 1999, when half a million tourists came, Nepali scenario was quite different. People travelling out of Nepal were quite few and the Nepali migrant labour market was not that developed. Now half a million tourists are coming into Nepal and 600 thousand Nepalis are travelling overseas. That means the market has doubled. What we have to look at is the size of aircraft that are flying into Nepal. It is always better to operate bigger aircraft. Most of the airlines that recently commenced service into Nepal operate narrow-bodied aircraft.
They are targeting the labour market from the Middle East, Malaysia and Thailand. The migrant Nepali labourers return to Nepal mainly for the Dashain and Tihar festivals. It directly affects our tourist season business as the festivals and the tourism season coincide. That is why still there is difficulty in getting air seats to and from Nepal.
National Flag Carrier
A new management has taken over the Nepal Airlines Corporation. But effectively it is the same management as the new people at the helms now are appointed by the government itself. There is also the problem of proper authority delegation to the management.
The best thing to do will be to start everything afresh. We can learn from what was done for turning around the Sri Lankan Airline.
If the property of NAC is managed properly, we will have enough resources for reviving it and making it a successful domestic as well as international carrier. In domestic front, the private airlines are doing good, so why can’t NAC? NAC is still a major player in the domestic market, but the problem is the huge investment required to make it successful. For domestic operations, you don’t need to invest as big as you require for international operations.
Now we have to be clear as to whether we need a viable national carrier or not. If the answer is yes, we need to do everything to have a viable national carrier. We should look at the issue of national flag carrier from a different angle. The national flag carrier is needed for the strategic national interest. We need a national carrier which is capable of carrying passengers as well as cargo. Being a landlocked country, our link to the outside world is mainly through air. Tomorrow, there may be a tension in the border area. To be prepared for handling that unwanted situation, it would be better to have a viable national carrier which can carry passengers as well as cargo.
In the past when NAC was strong, it was providing good support to the country. When there was economic blockade against the country, NAC brought in the daily necessities from the overseas.
Need for New Products
New tourist destinations should be opened up and developed if there are any. Langtang was made accessible for the tourists recently. Langtang’s advantage is that it is a mountain region that is easily accessible in any season. Still for those people who love mountains, the first demand is Mt. Everest.
As businessmen, we go there where we see benefits. Therefore, the government should first provide or build infrastructure in the areas where there is viability. The businessmen will be encouraged to explore new destinations if they are provided incentives for that.
In the history of Nepali tourism, the private sector has been introducing new products very frequently. The latest new product introduced by the private sector was ultra light flight. The government had had no idea about such a product. Similarly, bungee jumping, paragliding, cycling, rafting etc. all were introduced and publicized by the private sector. What we want from the government is simply not to create obstacles while the private sector is introducing new products.
On Re-branding
While developing the current brand for Nepal’s tourism “Naturally Nepal: Once is not enough”, a lot of effort was put on it. Cosmopolitan people were identified as our customers and the brand was developed targeting the cosmopolitan people of cosmopolitan cities. Nepal is unable to do global media campaign due to lack of funds. Therefore, the media campaigns were designed targeting separate cities. But now the promotional activities are not going as per the plan. In other words, it is not implemented properly. The viability of the brand promotion is not there.
Missing Indians
The arrival of the Chinese tourists has been increasing. But the problem of air seat availability is also there. But the arrival of the Indians has gone down. Earlier the Indians used to come here as they used to think Nepal as a foreign country and they could not go anywhere else due to various controls by the Indian government. But today they can go everywhere. The challenge for us is to offer something new to the Indian tourists. Pashupatinath temple premises that can be of big interest for the Indians is not managed properly. If they can go and gamble in Monte Carlo, why they would come to Nepali casinos. There is huge difference between Bangkok and Kathmandu. And another bottleneck is air seat unavailability. It is cheaper to go to Bangkok than to come to Kathmandu from New Delhi. Another reason is that when Nepal started experiencing tourism boom, those Indians who have a habit of booking the air seat at the last moment could not get the seat.
Therefore, we must update our product, enhance our image and do proper marketing focusing the Indian customer.
Attracting High Spenders
It is now time that we go for attracting high spender tourists. But if we bring a high spender and give him low quality service then he will run away. To give high quality product, the difficulty starts from the airport itself. The people at the immigration counters look as if they were there to scare away the tourists. After leaving the airport, the tourist experiences bad roads, polluted streets and old vehicles. Airport taxis are of 1970s. Hoteliers are not able to improve their infrastructure. Tour operators are operating old buses. In such a situation, it may not be a good idea to start luring the high spenders. Moreover, high profile people do not want to take any chance; until and unless they are 100 percent safe, they don’t want to come.
Change in tourist arriving pattern
Immediately after 9/11, long haul travel had dropped, and after the Tsunami there was further drop in the tourist movements. Now long haul travel is back again. Another trend that has started is travelling without long planning.
(Pokharel and Prasai are two of the biggest tour operators)
“Nepal today is a hot spot for tourism growth”
Anil Pathak is quitting the position of General Manager of Hotel Soaltee Crowne Plaza after serving for nearly a year and half. In this exit interview he shares his impressions about the tourism industry of Nepal. Excerpts:
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Anil Pathak |
How do you feel leaving Nepal at a time when the country’s tourism industry is showing a remarkable recovery? What do you attribute this recovery to?
Nepal today is a hot spot for tourism growth. When I came to Nepal it was hard for a hotel to break even. Today, as I prepare to leave this beautiful country that is set deep in my heart, the scenario is totally different. We saw a record number of tourist arrivals in 2007. Definitely leaving a country like Nepal and its wonderful people rich in cultures and warm hospitality is an unpleasant experience. But as a popular saying, ‘the show has to go on’ I have no option.
I firmly believe that the only way which we recovered ourselves is the trust in our belief that no one can ignore what Nepal has to offer, and we all as hoteliers, travel agents and allied industries worked to make Nepal “IRRESISTIBLE”.
What should Nepal do now to maintain the growth in tourist arrival?
It is very simple. We should focus on what’s unique and do away with the redundant. However, at this stage I must add that we have to make concerted efforts to divert our marketing to a true professional direction. I am sad to see that we still continue to market ourselves the way we did years back. Processes have changed, new destinations have emerged, and these are forces to be reckoned with.
Although the total number of tourist arrivals increased last year, the arrival of Indians did not increase to the desired level. What can be done to lure more Indian tourists into Nepal?
Build on our infrastructure in terms of airline connections. Today it is virtually impossible to fly in or out of India before you have made plans a fortnight in advance. We need to connect bubbling markets like Mumbai, Hyderabad and Bangalore with direct flights to make travel to Nepal cost and time effective. I remember the good times in 1995-2000 that these markets used to pack the hotels and I still wonder as to why we are failing to garner business from the immediate neighbourhood when this is one of the best markets in terms of numbers and rates. This is a mystery I have not yet resolved.
How can Nepal make itself more attractive for the potentially high-spending Indian tourists?
Most of the Indian tourists that I have had personal interactions with take Nepal as a preferred destination for meetings or leisure compared to Far East. It is the flight connections which deter them. Once we have resolved this problem, none of the hotels need to go to European Travel Marts.
Do you think that it is time for Nepal to replace the existing products and activities that it has floated in the international markets with new products and activities that are more in keeping with the demands of the international markets?
I do not think so. Just the way that we market ourselves as a destination needs changing. The product is as good as the perception of the market. We learnt in our hotel school that the three most important determinants of success of a hotel are Location, Location and Location. Our location adjacent to the two fastest growing outbound markets of China and India is strategically very advantageous. When are we going to have a piggyback ride on this benefit? When are we going to identify our location leverage? I think the time is ripe now. We need to capitalize on this as soon as possible.
It is said that Nepal’s existing products are being sold at a very low price compared to their quality. How can the Nepali tourism industry use the present recovery phase to bring the prices of the products at par with the quality?
Market forces play a key role in product pricing. Having said that I must also add that there has been a good increase in the average room rate over the past one year. We cannot just wake up one day and say I cannot honour a contract just because the rate is low. But let’s for once realize the fact that tourism is not a plug and play dynamic. It has to be nurtured and cared for. We as professionals need to keep our commitment and gradually increase as much as the growth demands, sustains and accepts. There is no shortcut to strategic pricing!
What is your comment on the international marketing strategy of the different tourism sub-sector players? What should they do? What is Soaltee doing?
This is an area which is now in a quagmire. Therefore, the much less said the better. Soaltee Crowne Plaza has its strategy clearly fenced with both the Indian markets and the growing markets of Europe and China.
Any other observations or comments that you would like to share with us?
Haven’t I said enough … The year and a half spent in Nepal will be unforgettable moment to me. It will remain deep within my heart. I feel I am destined to be back, sometime again…Cheers!
flyyeti.com
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Vijay Shrestha Executive Director flyyeti.com |
flyyeti is a low-fare airline service operating from its hub in Nepal to the Indian sub continent, China, South East Asia and the Middle East with a vision to be one of the world’s leading budget airlines in terms of profit margin, innovation, reputation and operational excellence, claims the company.
Modelled after leading regional low-cost airlines and customized to local preferences, its main focus is to make air travel more convenient and frequent through Internet booking and offering the lowest fares in the market without sacrificing safety standards and service, it further says.
Its mission is to revolutionize air travel in the region through an innovative business approach offering superb value for money and a safe, reliable operation, according to the company.
“Through our value proposition, ‘pay less, fly more’ flyyeti.com enables the customers to make the smart travel choice; those who have been unable to afford air travel in the past to start travelling throughout the region and those who do travel, to do so more frequently, benefiting both business and leisure travellers,” according to the company.
“Despite having low cost model, we have a good networking with distribution channels, travel trade community and among our valued customer groups. Moreover, we have friendly crew members and we cater to Nepali customers with more care and comfort. These are our major competitive strengths,” explains Vijay Shrestha, Executive Director of flyyeti.
The plan is to add another Airbus 320 on April, according to Shrestha.
“To achieve the operational excellence, we will be known for our low fares, grow our business profitably, build motivated multi-functional teams, demonstrate the highest operational standards and manage our costs ruthlessly,”
GMG Airlines
GMG Airlines, the leading private airlines of Bangladesh was established in 1998. In the beginning it started its flight from domestic sectors of Bangladesh. It started first international flight from Dhaka to Kolkata in December 2004. During 2006, the Airlines added three international flights to Kathmandu, Bangkok and New Delhi simultaneously. At the beginning there were three flights a week on Kathmandu-Dhaka sector. Now it is increased to four flights a week operating MD-82 aircraft with total seating capacity of 153.
GMG airlines is operating via Dhaka also to Kuala Lumpur, Bangkok, New Delhi and Kolkata and from the beginning of February 2008, it has started middle-east flight to Dubai. It provides student fares for Kathmandu-Dhaka sector to benefit hundreds of Nepali students studying in Bangladesh.
"Now GMG operates four flights a week to Kathmandu on Sundays, Tuesdays, Wednesdays and Fridays. In near future, it is planning to operate daily flights".
Dragonair
A member of the Cathay Pacific Group, Dragonair serves a niche in the Asian markets in addition to its core Mainland China market. Since the airline’s integration into the Group, services have been expanded to Phuket in Thailand and Busan in South Korea, with new operations to Fukuoka and Sendai in Japan. Kathmandu is the sixth new destination added to the Dragonair network after the airline became a member of the Cathay Pacific Group in 2006. It relaunched scheduled services to Kathmandu from December 2007 and now the Kathmandu flights are being operated four times a week with Airbus A320.
“Nepal is an amazing tourist destination, which I am sure is a big attraction for travellers from Hong Kong and beyond. Supported by Cathay Pacific’s global network, we are confident that the new services will bring a considerable number of international tourists through Hong Kong to Nepal,” adds Tang.
“We are delighted to be flying back to Kathmandu, a destination we first operated our service in 1989. As Nepal continues to grow popular among travellers from around the world, we have decided that this is the right time to resume services to this fascinating country,” says Kenny Tang, Chief Executive Officer of Dragonair.
AIR CHINA
Air China, the only company that carries the national flag of China, was founded in 1988.
According to the company, it is ranked first in brand value among China’s domestic airline companies (the world brand laboratory evaluated it in 2006 as 18.896 billion RMB), and it is among the leading companies in air passenger transport and freight transport. Air China is given responsibility to carry the Chinese national leaders to their destinations and bringing foreign and governmental leaders to China.
Air China has a strong domestic and international route and sales network, with the main hub being Beijing. In recent years, Air China has strengthened several of its regional hubs in Chengdu, Shanghai and Guangzhou.
Currently, Air China is operating two flights per week to Lhasa and Chengdu from Kathmandu. It plans to operate four flights from April to June, and daily flights from July onwards.
QATAR AIRWAYS
Qatar Airways has undergone a phenomenal expansion, with an average of 35% growth year-on-year for the past 10 years, according to the company sources. The airline has also garnered many awards and accolades becoming one of only five airlines worldwide to have been awarded a five-star rating by Skytrax, an independent aviation industry monitor.
Its commitment is to provide travelers with the highest quality of service in the air and on the ground. “Qatar Airways will grow these services as we continue along our path of expansion and quest to become known globally as the best airline in the world,” says the company.
Currently, Qatar Airways is operating eleven flights per week from Kathmandu which it intends to increase in the near future.
THAI AIRWAYS
THAI had introduced Nepal as one of the most potential tourist destinations to the world since its first operation of jet service to Kathmandu in 1968, says Prasert Tanhansa, General Manager of Thai Airways International PCL Nepal and Bhutan.
Currently Thai operates daily direct flights in the Kathmandu-Bangkok route with Boeing 772 (with configuration of 30 Business Class and 279 Economy Class) to connect Nepal to the world via THAI global network in Bangkok. This year (2008) Thai is marking the 39th anniversary of its smooth operation in Nepal.
“Since the initiation of our service, we have been serving this country with Air transport services comprising passenger, cargo and mail business. We have been promoting Nepal through our Global Network, Royal Orchid Holiday packages, Thai’s brochures, magazines and many more local and international activities like familiarization trips and other promotional events in coordination with Nepal Tourism Board (NTB), Nepal-Thai Chamber of Commerce and other tourism related associations,” says Tanhansa.
“THAI will continue its cooperation and support for promoting culture, tourism and business of this beautiful Himalayan country.”
YETI AIRLINES
Established in September 1998, Yeti Airlines had started its service with two Twin Otter aircraft in the country’s remote areas like Lukla, Phaplu, Lamidanda, Rumjatar, Taplejung, Dolpo, Simikot, Jumla etc. In the first four years of its operation Yeti Airlines added two more twin Otter aircraft and became the market leader in air transportation in the remote regions of the country. In eight years, Yeti Airlines further added five Jetstream 41 in its fleet and expanded its wing to all trunk routes such as Pokhara, Biratnagar, Nepalgunj, Bhairahawa, and Bhadrapur. Yeti Airlines also operates Everest Sightseeing flight with the 29-seat Jetstream 41 aircraft.
Now it is the only domestic airline which offers the widest and best connecting network of flights in the country, claims the company which has a vision of becoming a sustainable regional airline operating air transportation services in the selected regional routes.
With 563 staffs, currently it is operating five Jetstreams and five Twin Otters serving both the trunk routes ( Biratnagar, Bhadrapur, Bhairahawa, Bharatpur, Pokhara, Nepalgunj) and short take off and landing (STOL) routes (Lukla, Lamidanda, Phaplu, Kageldanda, Rumjatar, Simikot, Dolpa, Rara, and Jumla).
ETIHAD AIRWAYS
With a vision to build a truly 21st century airline that redefines airline hospitality and offers unparalleled levels of hospitality in the skies, Etihad Airlines first took to the skies in November 2003. Since then its pursuit has witnessed a rapid growth. It has spread its wings to destinations across Europe, Asia, the Middle-East and North America, offering a whole new way to fly the world. The four-member team that started the airline has now expanded to a family of over 2500 proud employees, working across countries to fulfill its common objective.
Today, Etihad is becoming the natural choice of a growing number of guests because of its comfortable service, claims the company. It was voted the World’s Leading New Airline for two consecutive years in 2004 and 2005.
Etihad started its operations in 2007 in Nepal. Currently, it operates four flights to Kathmandu a week.
JET AIRWAYS
With over 365 flights daily to 44 destinations in India, Jet Airways connects a place every 5 minutes, claims the airline. Being one of the youngest best maintained airways it operates flights to Bahrain, Bangladesh, Belgium, Canada, Kuwait, Malaysia, Nepal, Oman, Qatar, Singapore, Sri Lanka, Thailand, United Kingdom and United States of America on one of the youngest and best maintained the airline also plans to extend its international operations in North America, Europe, Africa and Asia in the coming years.
Jet Airways ( India) Ltd. was adjudged India’s Most Customer Responsive Company in 2007 in the Airline category at the Avaya Global Connect Customer Responsiveness Awards on 8 January, 2008.
Jet Airways started its operation in Nepal from May, 2004. Currently, it operates 12 weekly flights from Kathmandu to New Delhi which the company plans to extend to 14 flights a week in the near future.
BIMAN
Biman Bangladesh Airlines Ltd., the national flag carrier of Bangladesh, started its journey from scratch, i.e. virtually without any aircraft, any ancillary. It came into operation immediately after the war of independence. Despite many odds on its journey towards a long and challenging way to progress, Biman has been able to establish its reputation as an airline of welcome smile and an ocean of hospitality, says the company.
It now flies to South Asia, South-East Asia and Far-East, Gulf and Middle-East and Europe. It has made a steady progress with better services ensuring increased number of passengers. To make its passengers feel “once Biman always Biman” the airline has recently introduced some qualitative changes in its service concept. It aims at achieving its goal of being truly an international commercially viable airline of the region with its warmth and friendliness, care, safety record, traditional hospitality and comfort of the services it offers, says the company.
HONGKONG EXPRESS
Operating three weekly flights to Hong Kong from Kathmandu, Hongkong Express is in a continuous quest of pursuing excellence in every facet of its business, according to the company.
It also describes its goal to provide the high quality services demanded by today’s travellers as well as to anticipate those desired by the tomorrow’s. “It is determined to provide its passengers with a wide choice of destinations across Asia, frequent flight schedules, convenient reservation services, comfortable onboard environments, and friendly and attentive ground and cabin staff, the company further says.
It has one of the youngest aircraft fleets in Asia as well as in Hong Kong comprising four Boeing B737-800 aircraft, all of which were taken delivery of in 2007 including the latest arrival which joined the fleet in October 2007.
Founded in Hong Kong, Hongkong Express Airways Ltd. is dedicated to providing commercial aviation services of exceptional standards to cities in Mainland China and Asia.
BUDDHA AIR
Buddha Air started its operations with just one brand new Beech 1900D aircraft worth US$ 5 million in October 1997. At present it has five brand new Beech 1900Ds in operation. In a market where other airlines are operating 10-year or older aircraft, Buddha Air claims to be the only domestic airlines to be operating brand new pressurized aircraft. Today it is proud of not only of its state-of-the-art aircraft but also of its dedicated team. The combination of its aircraft and manpower has indeed created a history in the civil aviation sector of the country, claims the company.
Having flown more than 150,000 passengers in Everest Experience Flight in just four years and with a growing demand, Buddha Air today confidently boasts about operating the best mountain flight service in the world.
Buddha Air is the first and only airline in Nepal to operate brand new, straight-out-of-the-factory, and currently in production pressurized aircraft. The company emphasises on the safe operation of these aircraft so that the passengers feel maximum comfort. To maintain the impeccable safety record of the company, it operates services only in six airports which are fully equipped with navigational aids and have asphalt runways of more than 3700 feet. Its all flights end at TIA, Kathmandu.
INDIAN AIRLINES
Indian Airlines, together with its fully owned subsidiary Alliance Air, has a fleet of 70 aircraft (3 wide bodied airbus A300s, 47 fly-by-wire airbus A320s, 3 Airbus A319s, 11 Boeing 737s, 2 Dornier Do-228 aircraft and 4 ATR-42).
Indian Airlines has been setting the standards for civil aviation in India since its inception in 1953. It has many firsts to its credit, including introduction of the wide bodied A300 aircraft on the domestic network, the fly-by-wire A320, domestic shuttle service, walk in flights and easy fares, claims the company.
The Airlines’ network spans from Kuwait in the west to Singapore in the East and covers 76 destinations—58 within India and 18 abroad. The Indian Airlines international network covers Kuwait, Oman, UAE, Qatar and Bahrain in West Asia; Thailand, Singapore, Malaysia and Myanmar in South East Asia and Pakistan, Afghanistan, Nepal, Bangladesh, Sri Lanka and Maldives in South Asia.
Currently Indian airlines operate 17 weekly flights to New Delhi, Calcutta and Varanasi from Kathmandu.
SilkAir
SilkAir operates the Singapore Airlines Group's narrow body fleet of A320 aircraft. "As a full service regional airline, we offer quality product and premium service to our passengers, both onboard and on ground. Passengers will be delighted by their choice of in-flight meals and Asian cuisine, a full bar service and in-flight entertainment," says Joshua Ganesan, Country Manager, Nepal.
The inbound flights cater to leisure traffic out of Singapore and facilitate easy connections for customers from Australia, New Zealand Japan and Europe, all of which are important source markets for inbound tourism to Nepal, he points out.
For the customers of Kathmandu, the airline offers three direct flights a week to Singapore and the convenience of onward connections to more than 90 international cities in the joint Singapore Airlines-SilkAir network.
"We must say that the interest in our Singapore-Kathmandu service has been overwhelming," adds Ganesan.
SilkAir has been voted Best Regional Airline for the 8th time at TTG Travel Awards 2007 and is also the only regional airline in the world to feature consistently on Travel + Leisure's Top Ten 'World's Best Airlines' list.
"SilkAir is keen to develop the route. We are looking into the possibility of increasing our service to five times a week in the near future."
ORIENT THAI
Orient Thai Airlines made its inaugural flight to Kathmandu on 29th of December, 2007 with its MD82 aircraft. It is operating flights in the Kathmandu-Bangkok route twice a week (Tuesday and Saturday). It is also providing connection flights to Hong Kong, Incheon, Phuket and Changmai.
“The vision of Orient Thai Airlines is to make travel affordable to a larger number of holiday makers providing them with international standard services,” says Atsadawut Phuengsat, Station Manager and Representative of Orient Thai in Nepal.
“The fares of Orient Thai are much less than those of the other airlines that are now offering our level of service. Still its level of in-flight services is at international standards.”
GULF AIR
One of the oldest and biggest Middle Eastern carriers, Gulf Air was introduced to Nepal by President Travels as its PSA in 1995 as an offline service provider. Today Gulf Air is one of the major international airlines flying to and from Nepal everyday. It has a plan for three more additional flights a week. Since its operations started in Nepal more than a decade ago, Gulf Air has carried more than a million passengers and is one of the major tax contributors to the Nepal Government, claims the company. Besides this, Gulf Air with its vast connections within the Middle East as well as Europe has been a major airline carrying away labourers as well as bringing a large number of inbound tourists to Nepal. Through its inter airline connections, Gulf Air is also used by a large number of people travelling to the United States. This Airline is also carrying a huge amount of air cargo to the Middle East and Europe.
“We are operating 11 flights per week. I think being in the market for more than a decade, we are very well aware of our customers and their needs. Moreover, we are also working very close with Nepal Tourism Board (NTB) and major travel agencies. So we have a very good image among our major stakeholders.”
