Hotel Industry Faces Loss of Rs 9 Billion

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Hotel Industry Faces Loss of Rs 9 Billion

April 17: The hotel industry of Nepal of Nepal has recorded loss of more than Rs 9 billion in the last three months due to the coronavirus pandemic. This sector has been the worst hit by the crisis, which emerged in late December last year from China and has now spread to 210 countries across the globe.

 Hotel entrepreneurs say that they had to bear the loss due to the cancellation of bookings as the number of tourists arriving in Nepal started decline with the growing impact of the pandemic.

The hotel industry of Nepal witnessed large number of booking cancellation between January to March, which is considered the peak season for tourism.

A preliminary study conducted by the Hotel Association of Nepal, the umbrella body of hotel entrepreneurs in the country, states that the hotel industry has been badly affected by the lack of tourists due to the coronavirus crisis and the subsequent lockdown imposed by the governments across the world, including Nepal.

The hotel industry had invested heavily in the recent past as the country prepared to welcome a large number of tourists during the Visit Nepal 2020 campaign. New star-rated hotels in the capital and outside were emerging, targeting the government campaign.

Kathmandu Marriott by MS Group, Vivanta by Chaudhary Group, Akama Hotel by Sanima Group are already in operation. Similarly, Hilton Hotel by Shanker Group and Sheraton Hotel by Non- Resident Nepali Association (NRNA) are under construction.

Likewise, the existing hotels had also upgraded their services keeping in mind the VNY 2020 campaign.

But the crisis of coronavirus came out of the blue at a time when this sector was witnessing heavy investment.

According to the hotel entrepreneurs, this situation is more challenging than the 10-year Maoist insurgency, earthquake of 2015 and the economic blockade imposed by India.

Managing fixed cost like employee’s  salary and payment of bank loan despite the zero arrival of tourists has been one of the biggest challenges for the hotel sector. The entrepreneurs say that uncertainty on the normalcy have made them more worried.

According to Pravin Bahadur Pandey, executive director of Shangri-la hotel, it may take around one year to get back to normal business even after the outbreak comes under control.

The entrepreneurs say that five-star hotels have been bearing loss of around Rs 100 million every month.

“We are facing loss of around Rs 100 million per month,” said Pandey. 

Also, refunding of the bookings is another challenge entrepreneurs are currently facing. 

“We need to refund 100 percent for the bookings made for September and October, which is the peak tourism season,” said the entrepreneurs.

Shashikant Agarwal of Marriott Hotel said that although all the hotel are facing problems, the ones which have taken high amount of loan targeting the Visit Nepal Year 2020 for infrastructure development are in trouble.

Similarly, Binayak Shah, vice-president of HAN, said that the government should bring a concrete plan to revive the tourism sector in Nepal.

According to HAN, government needs to give one year’s time to pay the interest on loan, provide them subsidized loan, arrange relief for rent of six months and manage the payroll of one million employees and workers.

Similarly, Agarwal of Marriott said that as it will take time to bounce back from the crisis, the government should address the concerns of  the hotel and tourism sectors.

 

 

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