Cover Story

Trapped Travel Trade

By Navin Singh Khadka

A government preoccupied with too many problems and other priorities. An immature and wrangling private sector yet to hold the steering. And a gang of new emerging destinations in the region and elsewhere. This is the setting the national tourism industry has for itself now.

With the multi-faceted challenges, the top forex earning industry in the country has more questions than answers. Interestingly, these issues come to the fore mostly when trumpets are blaring with one or the other tourism program.

Sample a flashback. Remember what had happened during the Visit Nepal Year 1998. There were issues, issues and issues everywhere and at any given time facing the travel trade. These were the matters pointed out as the hurdle for the tourism extravaganza. Even those least bothered about tourism had the checklist of problems hounding the bonanza not to talk about the media's frequent critical coverage.

Two years down the line, most of the issues almost remain unresolved even if they may not be the talk of the town for now, though.

Once a high sounding program is declared, there will once again be avalanche of criticism against the ills threatening tourism. This would, surely, have been the case with the Destination Nepal Year 2002, if only the government had amplified the project. But, with no homework done for the promotional stunt so far, it has yet to raise the stink of the affairs in the travel trade.

Whether, however, there is any event or not, the fact remains that tourism is indeed reeling under too many problems. And that is because this trade has to do with all available physical infrastructures even if the ultimate tourism products are nature, heritage, adventure, and you name it.

Consider a striking example. With one or the other purpose of visit, around 500,000 tourists, in the last couple of years, have been arriving in the country by air. They may wish to trudge the spectacular highland on their foot or may choose to comb the well-conserved lowland jungles on an elephant back. But, first they need to land on Kathmandu -- the gateway for inbound tourists by air.

And what do they get to see in the capital? Air, noise and water pollution, mismanaged traffic, uncollected garbage, haphazard urbanization, and the list may go on and on. This is where physical infrastructure counts.

Improper Planning.

If only arrival figures were yardstick, there have been no dearth of official plannings for the national tourism industry. That too since the 80's when the now dissolved Department of Tourism had a plan to usher in one million tourists by 2000.

But in 1998 the Visit Nepal Year tourism extravaganza demoted that target eyeing only half a million of tourists. That however, ended up bringing in a little above 460,000 tourists. So many factors were cited responsible for not meeting the target. The officialdom was nevertheless complascent that the achievements were abstract and that the event would pay in the long run.

But going by what is happening now, it appears planners and policy makers could never draw any lesson from the VNY fiasco saga. Take the case of Destination Nepal Year 2002. It was in 2000, the government spilled the beans about the publicity program. To date, the plan does not even have a road map. Gross indifference.

The Ninth Five Year Plan, of course, has the target of ushering in less than 700,000 tourists by 2002. The document has the plan of reaching the arrival figure to 1.2 million by 2015 only -- good 13 years after 2002 which already had the official projection of attaining the one million mark.

Modest or ambitious, targets -- even if contradictory -- do exist on tourist arrivals. But toward that end, what have been the means? This is the big question. And this is where the real vacuum of plans and programs, and not least commitment, lies.

What could better justify that than the dying national flag carrier -- Royal Nepal Airlines Corporation? The national airline, that until few years ago brought in around 40 percent of the inbound tourists, is in shambles today.

Taken for a ride by politicians, the state-run airline is at its all time low. And the government has been a silent observer labelling its "seriousness" toward tourism as a farce show.

When the government has failed to correct a key tourism organisation like RNAC -- that it can directly dictate -- what else do you expect?

Paper works? Yes, this is one domain where work has really trotted off. But have deeds ever spoken louder than words? Seldom. Take the VNY's identified sites, for instance. These were new promising touristic destinations listed during the year. But, none of these have practically developed as touristic sites. And, the files listing the names of such places have simply gathered dust in the Ministry of Culture Tourism and Civil Aviation (MoCTCA).

That is why Royal Chitwan National Park has above 100,000 visitors in a year while its neighbouring Parsa Wildlife Reserve gets not even 10. Same is the case in the highland. While the Annapurna region sees above 70,000 trekkers in a year, it has its closest rival the Sagarmatha region with a little above 20,000. Areas like Kanchenjunga have not even 1,000 visitors.

"There has been no tourism development plans in the national parks and protected areas," says Dr. Chandra Prasad Gurung, Country Representative of World Wildlife Fund, Nepal Program. "That is why we are making plans with the government for some of the national parks."

And it's not WWF alone. The Asian Development Bank, the Netherlands Development Organiasation, United Nations Development Program, DFID (the British Development Program), among others are all out to develop this or that tourism projects.

Sounds great, alright. But, will the national tourism policy -- that came out only in 1995 -- guide these donor-funded projects or will it be the other way round? Keep your finger crossed. What establishes reports that the fragile ecology in such area is under attack is the disturbing news the cleanup teams bring back from the Himalayas and their foothills. A Spanish team last year brought down 1200 Kgs of trash from Mount Aannpurna I.

It's not just the natural sites. Even several heritage and cultural sites have begun to send SOS signals. "At a time when there have been international efforts to preserve natural and cultural sites, we have been receiving warnings that our sites will be delisted from the World Heritage Site list. This is a big threat to our tourism industry," reads a suggestion list of Nepal Association of Travel Agents (NATA) which was distributed during the latest Tourism Council meeting.

"Many of our archeological and heritage sites have come under tremendous human pressure. There are many temples and other places of tourist attraction where local people reside irrespective of such places' limited carrying capacity," says Tek Chandra Pokharel, a veteran tourism entrepreneur.

All these instances point at one thing: the unsustainable tourism growth at concentrated areas while many other areas remain unsung beauties. If tourists' movement cannot be diverted from the concentrated areas due to infrastructure constraint, tourism experts prescribe, at least travel trade calendar can be spread so that visitors can arrive here throughout the year.

Air Accessibility

Until few years back, tourism entrepreneurs had one thing to single out as a stumbling block for tourist arrivals: The bottleneck of air seats availability from India -- the gateway into Nepal for tourists flying in from the west.

With the Air Service Agreement of 4000 seats per week and with single designation (meaning, only one airline allowed to fly) agreed between Nepal and India, for foreign tourists, getting into the capital via India was many a time a tough job.

No more. Apart from the increased air seats (now 6,000 per week), almost half a dozen airlines have begun to fly in from the west. Two of them -- Transavia and Austrian Arilines -- directly from Europe, Nepal's prime tourism market. Thai Airways and Singapore Airlines have increased their incoming flight-frequency. In total, 15 international airlines are flying to and from Kathmandu.

Amidst the good news in air transport all is, however, not well in the country's tourism industry. The loser in the new competitive scenario has been no other than the Royal Nepal Airlines Corporation that used to carry around 40 percent of the total inbound tourists. Around 90 per cent of the inbound tourists visit the country by air.

Ministry of Culture Tourism and Civil Aviation's 1998 record shows that almost all the international airlines saw their passenger number go up during the Visit Nepal Year when a little above 460,000 tourists -- almost 10 per cent more than that of 1997 -- had visited the country. Qatar Airways recorded above 200 percent rise in its passengers while Thai made an increase of nearly 35 per cent.

But it was RNAC that recorded the highest decrease in passengers -- by nearly three per cent. As usual, the national flag carrier lagged behind with its inadequate fleet.

The negative indication in RNAC's passenger movement is also a severe blow to the national coffer since 70 per cent expenditure of an average Nepal bound tourist goes to airline he uses to fly in and out of the Kingdom.

Battered and bruised by frequent political interventions, the state-run airline has been in shambles. It spent a whopping 50 million US Dollars to lease aircraft for seven short durations almost half a dozen times in the last five years. Interestingly, almost all of these deals have been surrounded by bribery-controversy.

How politicians take the national flag carrier for a ride became more evident in RNAC's jet leasing deal with Lauda Air last year -- that almost became the Watergate Scandal for the former Prime Minister Girija Prasad Koirala.

Not to talk about the corruption the deal involved it was this lease transaction, RNAC insiders blame, that rendered the national flag carrier almost a fatal blow.

When the deal was clinched with the Austria-based airlines, RNAC came out with the statement that a Boeing 767 like that with Lauda Air was indispensable for the state-run airline to fly to Europe. But half-a-year down the line, the aircraft had to be sent back as RNAC was not able to pay the lease amount to Lauda. So much so, the corporation even had to send back another leased jet of China South West Airlines (CSWA) thanks to its "bankrupt state."

Left with only two of its Boeing 757, RNAC this time came out with the justification that the European sector -- where it had been flying for the last 10 years -- was not a viable route. Understandably, with so much money squandered over the Lauda deal, the national flag carrier was grounded.

In other words, that state-run airline was first maimed in the name of operating in the European sector and later was "nursed" by making it pull out of the same promising destination.

Marketing

There were times Nepal never marketed itself and yet tourists from around the world arrived here to explore its unique products. They took back home the news of Nepal's Shangrila image and the Kingdom had many other visitors. That exactly was the reason why tourism was taken for granted.

But times have changed. Leave alone the countries in the Hindu Kush region that sell mountain tourism products similar to the country, even countries like Thailand have started packages offering trekking.

Even as it was the pioneer destination to introduce mountain and adventure tourism, Nepal, in the competitive scenario, has no choice but to brace up for destination promotion. More so for roping in high bracket tourists.

A report of World Tourism Organisation has it that Nepal earns only US $400 per tourist per visit while the average tourism receipts in South Asia is US $910. "Nepal's tourism earning is in the decline resulting into negligible 3.9 percent share and ranking fifth in South Asia.

It is due to less expenses by tourists in shopping and entertainment activities and concentration of tourism activities in peripheral areas. The global tourism body's record shows that Nepal's share in the total South Asian tourism receipts was 5.5 per cent in 1994.

In a marketing bid, a search began for an autonomous body that could promote Nepal as a destination -- something the fund strapped Department of Tourism could not do. Enter Nepal Tourism Board (NTB).

Established under the partnership between the government and the private sector, the board, that started functioning since late 1998, replaced the Department of Tourism.

A private sector-dominated entity -- with five members from the government and six from the private sector -- NTB, for now, has taken up the baton of international promotion and marketing. Other responsibilites to follow are tourism product and infrastructure development and quality enhancement.

With NTB coming into being, the private sector in the travel trade does, of course, have a forum to lead the industry. But, this sector first needs to mature itself.

The emergence of the new world ethos of privatisation may be getting stronger elsewhere. But, the Nepalese private sector, at least in travel trade, is yet to prove its worth.

Going by the number of the private sector tourism organisations -- 16 -- they do appear well-organised. Looks, however, can be deceptive.

None of these tourism-related organisations have been able to self regulate themselves when it comes to quality tourism. United they have stood for their commercial-demands. But, never has that energy been of any help to maintain the basic standards.

In countries like the Maldives, Singapore, Australia, among others, the private operators have what they call "accreditation program". Their organisation set the basic criteria for tour operators who are accredited for having maintained the basic quality.

A certificate of accreditation -- awarded by their association -- hung on their counter wall assure the clients that they are at the right place. Operators not following the rule of the game gradually get weeded out. Quality matters.

But, that is not something happening in the country. Above seven hundred tourist-rated hotels, 550 travel agencies, around 500 trekking agencies, almost 100 rafting agencies, above two dozen private airlines..... and so on are registered with the Ministry of Culture, Tourism and Civil Aviation. The number of these operators may have increased further even as you will have finished reading this line.

So many operators should have led to a healthy competition resulting into quality services. But they have not. Cut throat competition has been their modus operandi. Their brochures do show one price while practically the charge can come down by above 70 per cent.

It was the same high-price-quoting brochures of the operators that had convinced a high level official committee -- formed to solve the 10 per cent service charge row in hotels -- that packages are quite expensive in the country.

In reality, the country has been branded cheap destination. In the name of special prices, upper bracket hotels bring down the price to the level of the lower ones and turn the lower ones go much further down.

What is true with hotels is equally true with trekking agents and travel agents. Rafting agents pine the days when they sold a day's rafting package for 100 US Dollars. Today the price has swooped to 10 US Dollars.

Amidst all these happenings, the MoCTCA that has been generously issuing the operation licenses to private operators has appeared as only a mute spectator. Reason: It is wearing shoes too big for it.

Regulating all the commercial operations remains a distant goal if not impossible -- especially when the officialdom still runs with the obsolete rules and regulations. Take, for instance, the case of trekking and travel agencies that are required to show an annual income of US $30,000 and US $ 15,000 respectively.

Practically, many agencies fail to meet the minimum requirement, say no other than tourism entrepreneurs. What they point at is the fact that not even 150 travel and trekking agents have been registered with the Value Added Tax (VAT) Office. Others complain that they cannot show their income in US Dollars since they earn only in Nepali and Indian currencies.

The silver lining

The black cloud hovering above the national tourism industry has some silver lining, though. Here is the latest click: In 2000, when total tourist arrival by air dropped to 376,503 by around 11 per cent compared to that of 1999, the number of inbound non-Indian tourist had still risen by 0.02 percent.

This, despite the fact that travel trade faced severe blows from incidents like the hijacking of an Indian Airlines' Airbus while flying from Kathmandu to New Delhi, the riots due to an unconfirmed remarks of an Indian cine star against Nepal, service charge row in hotels, among others.

All these upheavals led to drastic cut -- 32 per cent -- in Indian arrivals last year.

That was the year that saw frequent shut-down strikes, lock outs and strikes in hotels, and the brawling between hoteliers' and their employees on the service charge dispute triggering unprecedented cancellations.

Yet, the point to be noted is, arrival from the third country (other than India) was still up -- though nominally.

It was the visitors from these countries who themselves arrived here in the early 60's, explored Nepal's Shangri-La and went back home to tell what they saw and enjoyed in the Nepali soil.

The word of mouth spread and Nepal won its spurs as a prime touristic destination. That was the reason why the country first saw international tourists before it developed the concept of domestic tourism that is recently doing the rounds.

And now when globalization is fast catching up across the globe, tourism could be Nepal's one of the most effective trump card, experts say. The reason? Comparative Advantage. This is one key that could open the right doors for the country in the global market.

What other areas could the country have better comparative advantage than in tourism? Whether it is natural, cultural or heritage sites, the abundance of tourism products explain it all. "The natural endowment is definitely there," says Dr. Posh Raj Pandey, Country Manager at the Nepal's Accession to WTO Office funded by the UNDP. "But there has to be approaches like getting investors in different components of the travel trade."

Whatever the right approaches, the earlier they are put on top gear, the better. Or else, the emerging new destinations with adventure packages and other established destinations with their more aggressive marketing strategies may overtake the Nepali travel trade -- never to be surpassed again.

Nepal Tourism Board
Budget 2001/02

Search for New Strategies

Preparing to observe this year’s World Tourism Day on September 27, Nepali tourism industry is in a perplexed situation. The first of the two peak seasons in the country’s tourism business is already started and hotels are reporting cancellation of bookings. The industry seems to be heading to a consecutive second year of negative growth. A really disturbing scenario for an industry that was declared "sick" by the finance minister in the Budget speech last July and had promised relief measures.

The only solace is in the bizarre optimism that when the ball hits the floor, it can only bounce up. And the arrival figures so far this year are the lowest in the last five years of Nepali tourism industry.

However, once it is accepted that the current situation is indeed the lowest, a silver lining becomes visible around the black cloud.

Optimists think that it is now time for some paradigm shift in Nepal’s tourism policy as, accidentally, the slate now is really clean. But that would need a sort of national consensus as to what should be written on the clean slate. A really difficult task, as different sections of the society have different, and sometimes contradictory, expectations from tourism.

One latest research finding seems to have provided a clue as to what should Nepal’s tourism concentrate in. Conducted by Nepal Tourism Board (NTB) with the help from ORG-MARG, the survey says that the average tourists visiting Nepal are between 25 and 44 years in age and 65% of them spend more than US$ 1000 if in packaged tour. But they spend US$ 39 per day in average (excluding international flights) if they come as independent travellers. Moreover, 69% of visitors in Nepal are males and almost 90% of the guests say their expectations are met "mostly" or "completely".

Since the survey was conducted for only during May and June this year, the figures may not exactly reflect the profile of visitors during other months. However, they confirm that Nepal is for adventure seekers and the marketing efforts so far have not been able to develop any new image -something that is found out so repeatedly by earlier surveys that it seems to be a stereo type. One tourism entrepreneur told us a few months ago that he does not see any logic to go for setting up an additional hotel anywhere in the country because he does not see any growth in the top-of-the-market segment. And the same is confirmed by another tour operator recently. "In the past it was more balanced, but over the last one decade it is becoming increasingly a back-packers’ destination", said Basant Raj Mishra, Chairman of Temple Tiger Group and General Secretary of Nepal Association of Tour Operators (NATO), in response to our question.

Another warning signal sent out by the recent NTB-ORG-MARG survey is that Nepal has been losing its image of a country of "smiling faces". That is particularly true in view of the Indian tourists - regarded as the highest spenders and thus quality tourists particularly by the hoteliers. That means, the corrective measures are yet to be taken to undo the damage sustained after Indian Airlines hijack in December 1999.

However, the survey also revealed another remarkable finding - despite the royal palace incident of June 1, the tourists who visited Nepal during May-June, 2001 said security problem was not their major concern while in Nepal though it was in their mind before coming here.

Unlike in other industries, proliferation of competition seems to be doing harm to Nepali’s tourism. "This is exactly the reason behind the decline in Nepali tourism industry", say industry captains. Mishra points out two types of competition: international (i.e. from destinations in South East Asia for example) and internal (i.e. among the different hotels and also among different travel agents).

Such a competition in other products would have helped to improve the quality and to reduce the price simultaneously. But in tourism, while it has been reducing the price, quality too is declining.

The solution therefore is in reducing the supply (or at least in stopping the supply from increasing), say the hoteliers and tour operators. And they may have a point there as the accommodation capacity in the three major tourist destinations in the country is in excess of the capacity of these places to receive visitors at a time. So much so that some of the locations being promoted as destinations for nature tourism are becoming like cities bustling with tourists.

Still, the tourists go back satisfied as shown by the latest survey, as well as by the previous ones. Why ? One answer, and most plausible one, may lie in what a similar survey in 1997 had shown: the tourists coming to Nepal have a very low expectations, hence they get actually more than what they expect before commencing the tour. By that logic, every repeat visitor reduces his/her expectation next time he/she comes to Nepal and is ready to pay the same price as he paid in the previous visit.

One such an extreme example is of an Ambassador residing in Nepal who was pleasantly surprised when in an up-market resort hotel in one of the most premium destinations, he received a bill (accommodation an food) for only Rs. 300 for a night.

That puts tourism in Nepal in a vicious circle of reduced expectations and reduced prices. And this is exactly how Nepal is getting tourists despite other destinations being opened (such as Myanmar, Vietnam and Laos) and these new destinations naturally being the preferred choice of a visitor if the price is the same. The point is further supported by the change in prices quoted for the same package by Nepali tour operator in, for example, rafting. The package that used to be sold at over US$ 80 in early 1980’s, is now being sold for US$ 20 or even less.

Apart from checking the proliferation of players, another solution would be to standardize tourism services by an authority and put price tags accordingly so that the visitor would be fairly sure of what he can expect from what he is buying. Though there is some mechanism to assign different star categories to hotels, nothing of that sort exists in other sub-sectors - trekking, rafting, restaurant meals etc. During the dispute over the hotel workers’ demand for 10% service charge last winter, an idea had surfaced to fix service standards. But it has been forgotten later, it seems. Though Nepal Tourism Board (NTB) is reportedly doing some homework in this direction in consultations with the Nepal Bureau of Standards and Metrology, the details about the developments are not made public as yet.

However, some tour operators have also tried to introduce some product differentiation. Some of the members of Nepal Association of Travel Agencies (NATA) have formed another association - Nepal Association of Tour Operators (NATO) restricting the new association as a club of premium tour operators hotels and airlines. Only those with a turnover of over Rs. 3 million per year and registered under VAT are eligible to become members in NATO. Thus, once you are a member of this club, you are recognized as a provider of quality service. Still the arrangement may not be sufficient to convince the tourists.

The reason: tourists in some major destinations such as Singapore and Thailand are highly pampered. For example, in terms of security, when a tourist gets mugged, that becomes a national issue in those countries, recalls Mishra. The government provides a guarantee that the loss to the tourist is compensated adequately. The same is applied in case of fraud by the tour operators. In Nepal, a Rs. 50,000 deposit, for which even a bank guarantee is accepted, is all that needs to get a license for a tour operator. Whereas, Thailand and Singapore have been following a method of either keeping the license cheap but charging heavily for every additional activity the tour operator wants to carry out, or to keep the initial license fee itself very high.

Such ideas may disturb a hornet’s nest here. But if it is quality that is to be the point of emphasis in Nepali tourism, something radical like this is needed, view the travel trade captains.

Equally important is the need to convince the general people that tourism indeed has strong backward linkages, and thus, the common people benefit from increase in tourist arrivals. World Tourism Organisation (WTO) too has realised it and so it has been promoting the idea of Tourism Satellite Accounts (TSAs) in the national income accounting. The Nepali authorities too are conducting seminars to educate people about the technicalities of TSAs, but such accounting is still not in practice. So, when one gets the figures about the tourism sector’s contribution in the national economy, one gets the composite figures, but nothing about how much share the sub-sectors-trekking, rafting, air service, hoteling - have in this total.

Visit Nepal Year - 1998 was such an effort but its impact dissipated very soon as the exercise started that year was not maintained later. Now the government has announced a two year program called Destination Nepal to commence in 2002.

As long as such awareness is not created, Nepali travel trade organisations better start rewriting their vouchers - offering a different type of adventure tourism that includes in its package such strange products as Bandhs, encounter with Maoist guerillas and visit to the largest heaps of garbage in the world lying in the middle of the road.

"Threats to tourism are internal"

Entrepreneurs are frequently heard complaining that the funds are not properly utilised by the Board. Why is it so?

Pradeep Raj Pandey CEO, Nepal Tourism Board

In fact, this complaint has been there ever since the board was formed. The Board first prepares a draft plan with budget and the draft is circulated to all the Associations for their comments and suggestions. The annual plan is finalised incorporating these suggestions. So, I can’t see the logic when some individuals criticise the plan that they have prepared themselves. Since last year, we’ve started the practice of forming a sub-committee which holds even one-to-one discussion with prominent tourism entrepreneurs. This year, we’ve gone even further.Once the markets were identified, where to conduct some programs, we called the entrepreneurs specialised in that market and asked them for suggestions about what specific activities should be carried out there.

How is the plan this year?

We’re concentrating in only 12 major regions from which originate the tourists visiting Nepal. The marketing budget allocated for each region is according to the share of that particular region in total inflow of tourists. And there are only a few activities that we can afford in these areas in view of our resources - to participate in trade fairs, to invite travel journalists and travel agencies from there for familiarisation visit of Nepal, and to take there Nepali private sector delegations for promotional visit. In case of India, we also advertise in electronic and print media. We’ve, since last year, started spending also within the country for development of new destinations and for basic training to the travel industry workers. We also help in restoration and conservation of heritage sites. But the policy is to support only when there is some local level participation in meeting the expenses.

What is being done for new product development?

There has not been a specific new product as such. The emphasis is more on new areas. In new products, however, a couple of programs are under consideration. One is a museum of cultures which will run exhibitions featuring one or the other culture of Nepal throughout the year. Then we are thinking about ‘light and song’ program for Patan Durbar Square and Hanumandhoka Durber Square. Now an individual has approached us with a plan to create a "mini-Nepal", somewhere about one or two hours away from Kathmandu. We can help for new product development, but we cannot make direct investment right now as we don’t have the fund that may be required.

What is NTB doing to convince the tourists and foreign tour operators that the security situation in Nepal is not that bad as is being publicised?

Every week or fortnight during the recent crises after the Royal Palace incident of June 1, the Board sent press release to international newspapers, numbering about 5000, assuring that tourists in Nepal are safe no matter what might have happened in the country. We sent that message to all the travel trade associations and those who contribute to the Board by way of 2% TSC. Our effort was to make sure that there would be no contradictory messages going out.

But why did not you let the local press know about that?

Everybody knows, but pretends to be not knowing. One more point about it is that the agencies in Nepal rather advise their associates abroad to be cautious. Their strategy would seem to be logical if you consider that if something untoward happens their future business would suffer. But that way they are inadvertently hampering the efforts of the Board.

What does the Board assure?

For example, immediately after the Royal Palace incident, the Board coordinated safe transfer of tourists between the hotels and the airport. Wherever there is a problem we take steps that we can.

What are the present threats to Nepal’s tourism Industry?

Externally, there is competition from other countries. We may not be able to match them in spending the resources. But most of the threats and weakness are within us - lack of quality control and price control, poor enforcement of contracts, failure to give a sense of peace and security etc. And these are possible to be handled by regulatory authorities. But actions are not geared toward the right direction.

"Travel isn't a luxury "

What are the current problems in Nepal’s tourism ? Every departing visitor survey so far indicates that "smiling people" are the greatest resources for Nepal’s tourism industry, but these very people have not been getting the benefits from tourism. Then there is the problem of infrastructures not developed. What should have NTB done ? NTB is to market Nepal, not to develop infrastructure. What do you think about aid agencies helping in tourism development ?

Ashok Pokharel Chairman, PATA Nepal Chapter

They are investing in tourism at such a juncture that we have negative growth in this sector for the last two years. And in my view, this shows that tourism here has failed.

What is PATA Nepal doing ?

Our only objective is tourism promotion. In the past we were doing unofficial marketing - something Department of Tourism could not do. Now that NTB is there for marketing, we’re, with our connections around the world, bringing in travel agents from abroad to show them what we have here. We don’t have enough money for global consumer advertising. This year, we’re going to small but lucrative niche markets.

It is said that there is no consensus regarding a national policy on tourism. How does such a consensus come about?

The motivation for consensus comes when you show the people the benefits from tourism. For example, you should convince the farmer or industrial labourer that they benefit from tourists coming in.

These days people also complain that we’re not getting quality tourists.

First, we need to define what we mean by "quality tourist". Is a quality tourist the one who is a big spender ? Not necessarily. One way of defining quality tourist may be that he or she is the one who respects our culture, enjoys our country as a destination and spends here a significant portion of his/her disposable income. Today’s hippie, or a college drop-out, may be tomorrow's millionaire. So we can’t shoo away the hippie. We can encourage them to not pollute the environment, to respect our culture and also to spend more. It is up to us what we make out of the visitor.

How do you see the speedy decline in tourist arrivals ?

It is mainly due to decline in Indian tourist arrivals. Now they have better offers from other destinations. The only attraction here that remains for them is pilgrimage. But the new generation of Indian tourists is an MTV generation. They cannot be attracted by Pashupatinath temple.

You mean, it is not the security problem that caused this decline.

Security would not have been a serious problem had tourism been national concern.

Is NTB doing well ? How is your assessment ?

They’re trying their best with the budget they have. The money the spend is quite big in our country’s context, but it is peanuts in international context. Thailand is spending US$ 1.5 million in India to get 1.5 million Indians.

How do you see the mutual complaints between tour operators and hotels ?

In my opinion, hotels should rather concentrate more in corporate business. Tour packages should be sold by tour operators.

What about hotels having their own travel agencies ?

That is exactly what ruined the Indian market. Certain hotels tried to grab big market share and now we are in this situation. Ironically, those suffering the most are the hotels themselves.

Lastly, what are the recent world trends in tourism ?

Eco-tourism has emerged as very important. And in that we’ve to learn a lot. But we also have a lot to teach. Another significant recent change is that people travel on credit and pay off over several years of work. Travel is not a luxury now. We better understand that and adapt accordingly.

By Madan Lamsal & Keshav Gautam

Quality Tourism

By Dr. Franz Heffeter

Also in Austria, experts in tourism marketing concentrated for long in promoting "quality tourism". The guest to be addressed by marketing strategies was to be the "quality guest". This is easily defined: A quality guest was supposed to come on expensive rates to exclusive accommodation spending as much money in shortest time possible. But do not forget the addition "without disturbing the local population and the environment".

What is the reality ?

The hotels and the travel businesses invest more money than ever to accommodate tourists on cheaper prices ever, and the environment business that affect the (cable cars for winter tourists, transport means on road or air) compete harder than ever to merchandise their services on best value for the customer.

The results are more long haul tourists ever, higher investment ever to meet the quality expectations of the tourists. Smaller enterprises cannot stand the pressure of competition any longer because they do not have the financial strength needed to meet the costs for providing the necessary standards to meet the increasing quality expectations of the tourists.

The traditional discussions about quality concentrating on investment issues forgets the environment, culture and human resources. Incorporating all these aspects, we can define a new approach to new marketing strategies for the new millennium.

Cultural Identity as a Unique Selling Proposition

For a long time, Austrian hotels and tourism organizations concentrated in giving tourists what they expected. So their main marketing principle was not to act but to reach. Such can both attitude necessarity leads the industry into a vicious circle: Increasing demand and the constant look for something new which diminishes the life cycle of the touristic product. Cost effectiveness, therefore, gets a new meaning of reaching the break even point by investing earlier to minimize the risk of losses for being late.

A recent Cornell research study on exclusivity in hotellery gives a hint. It states that in the top segment customers do not rebook the hotel because everything there is perfect. That is what they expect anyway. They come back because there is something special that makes them feel good. So it is the human factor that counts in a global competition. Austrian tourism organizations, especially OW, therefore, started to concentrate on marketing our unique culture, the friendliness of the people, the fact that there does not exist a language barrier (for Swiss and German travelers, they are more than 40% of all guest arrivals), the safety aspects in the country and also safety in case of necessary medical treatment.

A successful marketing strategy should cover these ideas both internally as well as externally. We have to create an awareness of cultural heritage and pride about the environment among the entire population of the country not just within the touristic labor force. Collecting, presenting and saving the culture in an age of globalization gives us the chance to use it longer, not just as a new attraction. There is nothing to age faster than the 'new', especially in tourism.

When Earnest Hemingway stayed in Austria and Switzerland in the early 1920s he was proud that the indigenous people let him participate in their way of living. I have met a man, who - as I was told - is a successful independent entrepreneur, always dresses in local garment. That may be a positive spirit to exude in front of the "quality guests".

For small businesses, it would also be recommendable to think of customer satisfaction programs. Electronic media can be used easily and cheaply to send seasonal greetings, birthday wishes etc. The main message to be delivered is: We care for you not just as a cash cow but as a human being.

Destination Management

Destination management has become the key word in Austrian tourism marketing. Destination marketing capsulates various enterprises. These activities and approaches are to reach the customer with one ideal. The issue of destination management is to co-ordinate these efforts to minimize the cost of marketing and to maximize the interest of the customer. In fact, research findings prove that the quality tourist (who, in this context, is to be defined as the individual, educated tourist with settled financial base, who has already been everywhere) is not attracted by a single offer or activity but by having the chance of selection, acting flexible, using his valuable time optimally. Destination management is a sort of cluster management and tourism includes not just the touristic core enterprises like hotels, agencies, airlines but also the environment. Cluster management is necessary to see tourism as a network of involved partners. Marketing of destinations gives the chance to define a new and complete product for a quality market.

Political structure

The political framework for establishing successful marketing strategies is not to be underestimated. The creation of marketing organizations on state level is a strategic task the government is responsible for in co-operation with the industry. The definition of a vision and a mission not just as a statement but to be filled with operational agenda is a political act. It creates then the touchstone to which all activities during running time of the master plan have to be measured.

The appropriate time horizon for an activity like that would be five years on average. It helps to bundle the powers of the industry and the bureaucracy during that time to create synergies and to prevent losses and friction between the involved forces.

The prerequisite is the establishment of an integrative Tourism Board with two main duties:

- Acting as an advisory board where opinions are sought and possibilities of the tourism bound business are canalized and articulated to adjust the government strategies.

- Assessing the quality of operations set according to the strategic decisions in the means for reaching the goals, the deadlines and quality.

Both of these provide the basis for the work of a National Tourism Marketing Organization which is run by professionals of the tourism industry on a contract with the government and the enterprises forming the other party.

Staff Development

According to our research, there are two major components that form the success especially of touristic enterprises:

- Business competence of management

- People competence of management

Therefore, we have detected and described eight key qualities for the management in tourism. They will also form the core of the MBA for Tourism Management Project started by the Klessheim Tourism Schools, the University of Salzburg, the Chamber of Commerce and the State of Salzburg.

i. Describing, analyzing, planning, acting and controlling business activities in micro and macro economic context

ii. Managing knowledge both in an intrinsic as also in an extrinsic context

iii. Managing change of enterprises and environment

iv. Starting, managing and marketing innovation and creativity

v. Leadership for the new millennium

vi. Social competency

vii. Empowering people

viii. Thinking in a context bigger than just the direct supply and demand destination management.

Encouraging people and developing staff qualities on all levels will make the difference between the good and the excellent enterprise in tourism in the future just to come.

(Adopted by New Business Age from a paper Heffeter presented at workshop on "Sustainability and Quality Tourism: Thrust for the new Millennium" held on December 5, 1999 in Kathmandu).

Tourist in Nepal

Source : NTB-ORG-MARG Survey, 2001

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