Visit Nepal 3.0 : CAN NEPAL PULL OFF AMBITIOUS 2020 CAMPAIGN?

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Visit Nepal 3.0 : CAN NEPAL PULL OFF AMBITIOUS 2020 CAMPAIGN?

The biggest criticism being leveled at Nepal’s latest mega tourism campaign is that it got going too late. With the window of opportunity getting smaller, can it catch up and deliver on its ambitious promises?

--BY TAMISH GIRI

With just two months left for the official launch of the much-anticipated Visit Nepal Year (VNY) 2020 campaign, its secretariat has a packed schedule. While the National Programme Coordinator of the campaign Suraj Vaidya has just returned from South Korea, his team is preparing for a high-level engagement in Britain where it will hold a special programme in the House of Lords, the upper house of the British parliament, scheduled for November 7.  

Vaidya and his team has a herculean task to promote the campaign in major markets to make sure that Nepal’s third mega tourism campaign kicks off on a high note. The first Visit Nepal campaign was launched in 1998, and was subsequently followed in 2011 by Nepal Tourism Year. Visit Nepal Year 2020 will be Nepal’s third attempt in this respect.

For Nepal, the campaign holds important significance. With a strong and stable government in place, the Nepali authorities aim to reposition the country as a must-visit destination. This will help the tourism sector, one of the mainstays of the country's economy, to generate jobs and income.

Nepal’s tourism sector generated Rs 240 billion in revenue and supported more than 1.05 million jobs directly and indirectly in 2018, according to the annual report of the World Travel and Tourism Council. The report showed that travel and tourism's total contribution to the country’s GDP stood at 7.9 percent last year, up 3.6 percent from 2017. Through VNY 2020, Nepal has aimed to boost this growth rate by setting a target of welcoming two million visitors and earning Rs 200 billion.

The positive surge in tourist arrivals (a record 1.17 million in 2018), the construction of two international airports and the addition of five-star hotels have boosted the government's confidence. At least a dozen five-star hotels are under construction across the country in anticipation of VNY 2020 and the targeted two million visitors. Hoteliers said that more than Rs 45 billion has been invested in the hospitality industry in three years after the 2015 earthquake that killed almost 9,000 people.

This year, the Tourism Department awarded a five-star rating to four hotels—Soaltee Westend Premier and Hotel Central Plaza in Nepalgunj, and Aloft and Marriott Hotel in Kathmandu, bringing the total number of hotels in the five-star category to 15. Similarly, the four-star hotel numbers has reached 13 this year. “This all shows the confidence in the country’s tourism industry,” said Vaidya.

While Tourism Minister Yogesh Bhattarai sounds confident in pulling off this ambitious campaign, there is also increasing scepticism as to whether or not the national campaign can achieve its targets. There are many challenges.

The Post-Disaster Needs Assessment Report that the government published after the 2015 Gorkha Earthquake had also suggested launching 2017-18 as the Visit Nepal Year. The Tourism Ministry had postponed the campaign to 2020 due to the slow pace of road and airport upgradation projects and reconstruction of historical monuments and cultural heritage sites.  It was also because the upgradation of Kathmandu’s Tribhuvan International Airport (TIA) and the Gautam Buddha International Airport was not making noticeable progress.

Despite years of preparation, VNY 2020’s progress in terms of overseas promotional activities is not visible in the major source markets. On the other hand, the government has not released the budget for the campaign. All these drawbacks have led tourism entrepreneurs to become less optimistic, questioning whether the campaign will deliver the desired results. 

But some entrepreneurs see a silver lining. The two-day state visit of Chinese President Xi Jinping to Kathmandu in October has raised optimism in the local tourism industry that China’s tourist floodgates will open for Nepal. Xi became the first Chinese president to visit Nepal since 1996. In his maiden visit, he himself said he will encourage Chinese tourists to visit Nepal.

There are many examples globally that Xi, one of the world's most powerful men, has been creating a big impact on tourism within China and beyond. Nepal which initially targeted 350,000 Chinese visitors is now expecting the number could grow to 500,000 post Xi’s visit. Himalaya Airlines has started direct flights from Kathmandu to Beijing, and this initiative according to analysts could give a major boost to the VNY 2020 campaign. Currently, five Chinese airlines - Air China, China Southern, China Eastern, Sichuan Airlines and Tibet Airlines - operate flights to Nepal. Nepal Airlines is expected to begin operations in Guangzhou, China’s largest trade hub.  In July, Nepal and China signed a revised bilateral air services agreement which allows for 98 weekly flights between the two countries, up from the current 70 flights per week. “The Chinese president’s visit is really a big boost for Nepal’s tourism,” said Nepal Tourism Board (NTB) CEO Deepak Raj Joshi.

Two airlines from India—Vistara and Spice Jet and one from Kuwait are also set to commence their operations by November. According to officials at the Ministry of Culture, Tourism and Civil Aviation (MoCTCA), a bilateral air service agreement with Finland is expected soon that will allow the Finnish flag carrier Finnair to operate direct flights to Nepal.

Similarly, JC Cambodia International Airlines is also expected to start operating in Nepal soon. However, despite some positives, not much progress has taken place in regards to tourism infrastructure and road facilities as the campaign draws closer. The upgradation of Kathmandu’s airport is still on-going while the construction of Gautam Buddha International Airport in Bhairahawa, initially targeted for 2020, will be completed only by the second half of 2020.

Tourism entrepreneurs say poor air connectivity is one of the factors holding Nepal back from attracting a higher number of visitors. The country's only international airport in Kathmandu is not only congested and poorly managed, but is also consistently ranked among the worst airports in the world.  Besides, expensive aviation fuel charges, handling and parking in Kathmandu airport, substandard airport infrastructure are also considered as factors diminishing the prospects of the national tourism campaign.

DELAYED PROMOTION
When the government announced it would celebrate 2020 as the Visit Nepal Year, there was a considerable delay in the appointment of the campaign’s coordinator and formation of the secretariat. The appointment of Suraj Vaidya, former president of Federation of Nepalese Chambers of Commerce and Industry, also has not fared well within the travel business fraternity with many questioning his ability to pull off this ambitious campaign as he was inexperienced in the tourism sector.

Even after Vaidya's appointment, the government delayed releasing the budget for the secretariat. The secretariat demanded Rs 1 billion to carryout national and international tourism promotional activities but the amount raised many eyebrows.  According to the Tourism Ministry sources, the Finance Minister had asked the secretariat to send a  realistic breakdown of the budget it wanted.

“The Finance Ministry is still not convinced by the programme that the secretariat has prepared because it has not set eyes on the consumer market,” said a member of VNY secretariat  Sources at the secretariat said they lack the budget which has been the biggest constraint for the campaign. Despite the government promising full support to the campaign, the secretariat is yet to receive sufficient funds for full-scale promotion and product development.

"We received around Rs 100 million in the last fiscal year. While the budget requirement for the current fiscal year is around Rs 600 million, we have received only Rs 180 million," said one secretariat member under the condition of anonymity. "Of the Rs 180 million, 50 percent will go for salaries of the staff and operation of the secretariat. How can we carry out effective promotional activities with such a small fund?" the member asked.

The untimely demise of then Tourism Minister Rabindra Adhikari and a five-month delay in the appointment of his successor in the ministry also badly affected the overall preparations of the campaign.

Ashok Pokharel, president of the Nepalese Association of Tour Operators, said things could have been much brighter by this time had the government shown urgency in appointing the VNY national programme coordinator."The delayed appointment has hampered the overall promotional activities. The appointment should have been made early for effective campaigning,” said Pokharel.

There are several other countries that Nepal can learn from when it comes to preparing tourism campaigns.  For instance, Malaysia is also launching its national tourism campaign in 2020.  The Southeast Asian country started working on the Visit Malaysia 2020 from 2016 which gave it tremendous time to prepare, package and sell its tourism products.  Vaidya admitted that they did not get enough time for effective promotion. "Despite being initially thought of in 2015, the tourism campaign was formally launched last year. And, the secretariat was formed only eight-months ago. In this respect, we have been a bit slow to promote the campaign," said Vaidya.

But there has been some increase in efforts to promote the campaign. The secretariat has signed an agreement with Lonely Planet, the hugely popular US-based travel guide book publisher, for publishing three specific books on Nepal while another agreement has been signed with the Shanghai CTRIP Commerce Co, one of the largest online travel agencies in China, to promote Nepal as a preferred travel destination in China.

Chinese actress Xu Qing has been appointed as Visit Nepal 2020 Goodwill Ambassador, which according to Vaidya, will have a huge impact in China.  In the first week of October, the secretariat organised a meeting of Nepal’s ambassadors in Asian nations in Bangkok for the promotion of the campaign in the respective countries. 

Questions have also been raised over having two parallel entities—the Visit Nepal 2020 secretariat and Nepal Tourism Board (NTB)—for the same objective. Pankaj Pradhananga, director at Four Season Travel & Tours, questioned why should there be two parallel bodies to achieve a single goal.

“I don’t think the campaign falls beyond the very objective," he said, adding, "Hence, the challenge now is to create much needed synergy and engaging all the stakeholders with the sense of ownership."

The primary objective of NTB is to forge a partnership between the government and the private sector to develop and market Nepal as a tourist destination.

NTB CEO Joshi said they have been implementing three main strategies for the campaign. The board’s main strategy is to focus on aggressive marketing and promotion based on various segments rather than only on the countries.

“Secondly, we are promoting Nepal tourism all around the year. Earlier, we were more focused more on the main tourist season of October-December. Now, more emphasis has been given to the low season (June-September),” mentioned Joshi. According to him, NTB aims to promote and sell Nepal’s climatic conditions to visitors from India and Bangladesh.

“We are branding it with the slogan 'Garmi Se Behal, Chalo Nepal',” said Joshi, adding that during Monsoon, they are focused on bringing tourists from Gulf countries by organising a campaign titled “Romantic Monsoon” and are also promoting winter season tourism for Chinese visitors.

INCREASING NUMBERS OR EARNINGS?
Of the total tourist arrivals via air, five countries, namely India, China, USA, Sri Lanka, and United Kingdom occupy almost 50 percent. The Tourism Ministry's statistics show that Nepal received 16.57 percent tourists from India, 13.1 percent from China, 7.83 percent from USA, 5.94 percent from Sri Lanka and 5.51 percent from the United Kingdom. This calls for a diversified source market as well as improving connectivity and enhancing tourism products.

Of late, Nepal is increasingly becoming one of the world’s most affordable countries to visit. The Travel and Tourism Competitiveness Index of the World Economic Forum ranks Nepal in 15th position for price competitiveness. This supports the fact that Nepal is better known as a budget destination.

In 2018, tourist arrivals crossed the one-million mark for the first time with 1.17 million international visitors coming into the country. But, the flipside here is that tourist spending has declined to a seven-year low. The record growth in the arrivals did not contribute much in visitor spending as the average daily spending of tourists dropped to USD 44 from USD 54 in 2017.

While the government's narrative is on two million tourists, travel trade entrepreneurs say the campaign should emphasise on extending tourists' stay and increasing their spending in Nepal rather than just going for the numbers. They say the campaign should be used as a platform to attract the high-spending tourist segment by improving the quality of service and developing new products.

Ranjit Acharya, one of the members of the VNY 2020 secretariat thinks that numbers alone cannot help Nepal. "We already have25 percent growth in arrivals. The challenge for us is to entice more high-end tourists, extend their stay in the country by offering diverse products," he said.

Namgyal Sherpa, managing director of Thamserku Trekking, echoes Acharya. "This is the right time for us to diversify our products and services. Along with our core products - trekking, expeditions and adventures-, we should focus on unleashing niche products such as religious tourism, ecotourism among others," he said.

EYEING INDIA AND CHINA
In the last leg of the campaign promotion, Vaidya and his team are travelling to India and China. As these two neighbours are the two largest tourist source markets for Nepal, the success of the campaign will largely depend on the number of visitors from these countries in 2020. Except for 2015, there has been a constant rise in tourist arrivals from India and China. The government is also buoyant post Xi visit as it has already formed a taskforce to promote Nepal in China.

“Chinese President Xi himself has said he will encourage Chinese tourists to visit Nepal. In this context, the ministry has formed a taskforce to bring in the maximum number of tourists,” said Tourism Minister Yogesh Bhattarai.

The United Nations World Tourism Organization (UNWTO) reported China as the world’s largest outbound tourism market in terms of spending in 2018. Tourism spending rose 8 percent year-on-year to USD 277 billion.  Traditionally, the southern neighbour has been the largest source market for Nepali tourism. In 2018, a total of 194,323 Indian tourists visited Nepal, an increase of around 21percent.

The Tourism Ministry's study shows Indian tourists mainly visit for the purposes of vacation followed by pilgrimage. With more Indian airlines operating to Nepal, the arrivals via air is expected to rise in 2020.

The UNWTO has estimated that the number of Indian outbound visitors could reach over 50 million by 2022. This study reveals that Indian travellers are among the world’s highest spenders per overseas visit, with their spending expected to increase from USD 23 billion in 2018 to USD 45 billion by 2022. However, tourism entrepreneurs say that Nepal is lagging way behind in attracting visitors from the southern neighbour. According to them, the Indian government’s decision to ban Indian currency notes above 100 denominations in Nepal has been a big setback for Nepal’s tourism.

As per Indian media reports, the advantage for Indian visitors who travel to Nepal has been that one did not need to change currency.

The Indian government, in a surprise move on November 8, 2016, pulled INR 500 and INR 1,000 out of circulation “to unearth unaccounted wealth and fight corruption”. Since then, the Nepal Rastra Bank also banned those notes in Nepal.

Before that, the Nepali central bank had allowed Nepalis to carry Indian banknotes of 500 and 1,000 denominations based on the Indian government’s decision.

INFRASTRUCTURE BOTTLENECKS
Government officials often claim that the construction of two international airports - Gautam Buddha International Airport in Bhairahawa and Pokhara International Airport - will be of great help to improve air connectivity and boost tourist arrivals.

While these two airports, once they are operational, will help resolve the notorious air congestion in Kathmandu’s airport, their construction will be completed in the second half of the next year. Tourism Secretary Kedar Prasad Adhikari said that Gautam Buddha International Airport in Bhairahawa will be ready by March 2020.

While construction of the second international airport in Bhairahawa is moving smoothly, preparations regarding its commercial operation haven’t progressed much. The Tourism Ministry has said the airport would be managed and operated by the private sector, but it is yet to finalise the operator. As of now, negotiations are ongoing with Germany's Munich Airport for operational management services for the Gautam Buddha International Airport.

Amid the Visit Nepal Year euphoria, one critical area that the authorities have failed to address is in improving Nepal's aviation safety standards. The country is still under the European Commission blacklist, which means the Nepali airlines including the flag-carrier Nepal Airlines are barred from flying in European airspace.  The government has decided to split the Civil Aviation Authority of Nepal into two entities- one to work as a regulatory body and the other as service provider.

But the bill is yet to be tabled at the Federal Parliament. As more international carriers vie for Kathmandu routes, managing air traffic at Tribhuvan International Airport will be a tough task. Besides, the transformation of Kathmandu’s airport into a boutique airport is also moving slowly.

“I wished it had been finished before the peak time so that word of mouth would have worked with all the positive changes through the people who are already visiting Nepal”, said Abdullah Tuncer Kececi, country manager of Turkish Airlines for Nepal. International airlines operating in Nepal have their own set of complains - from expensive aviation fuel charge to higher landing and parking charges.

RISING INVESTMENT
Expecting a tourist windfall in 2020, there has been a huge surge in investment in the hospitality sector in recent years. Besides major tourism centres such as Kathmandu, Pokhara, Chitwan, cities including Bhairahawa, Nepalgunj, Butwal, Itahari and Birgunj are also witnessing the opening of star hotels.

Nepal has currently 15 five-star hotels in Kathmandu, Pokhara and Nepalgunj. The Tourism Department has recently awarded a five-star rating to four hotels—Soaltee Westend Premier and Hotel Central Plaza in Nepalgunj, and Aloft and Marriott Hotel in Kathmandu. Three more five-star -properties - Kathmandu Sheraton, Hilton Kathmandu and Hotel Pawan (Bhairahawa) are expected to be completed by next year. Similarly, the four-star hotel numbers has reached 13 this year

Foreign direct investment in tourism is also on the higher side. Official data shows the tourism sector drew FDI amounting to Rs 10.53 billion in the last fiscal year, up from Rs 4.15 billion in FY2017/18. In the first three months of the current fiscal year, FDI commitment in tourism sector has already totaled Rs 5.77 billion.

Major events planned for 2020        
•    World’s largest rafting competition including fishing, cannoning in Karnali       
•    International mountain bike competition from Muktinath to Marpha        
•    Special Buddha Jayanti celebration in Lumbini        
•    Hosting of Everest Marathon        
•    Bibaha Panchami celebration in Janakpur        
•    Tourism Investment Summit

NICE Expo in Feb, 2020
Pacific Asia Travel Association (PATA) Nepal chapter in collaboration with Visit Nepal Year 2020 and Nepal Tourism Board is organising the Nepal India China Expo (NICE) in Nepal. The tri-nations tourism expo, first of its kind is scheduled to be held in Kathmandu from 21-24 February 2020. According to Sunil Shakya, chairman of PATA Nepal, the expo will have networking and business opportunities, industry insights, between the tourism entrepreneurs of three nations. "China and India are two of the largest outbound source markets with Nepal as one of its immediate recipient nations," he said.

'Flying to new destinations'
As Nepal prepares for VNY 2020, the state of the national flag carrier is far from satisfactory. The debt-ridden Nepal Airlines Corporation is struggling to expand its international operation, despite procurement of two-wide body - A330-200s.

The purchase of the new A330s was supposed to reposition NAC in the international market, but due to lack of proper planning, these two wide-body jets are yet to be deployed for long-haul routes. The NAC that has been flying to seven countries has around 12 percent market share in international sector in 2018. Travel trade entrepreneurs said the role of national flag carriers is crucial for the success of the VNY. However, it has to improve in many areas - especially flight schedules and timings, they said. "It doesn’t have to fly to many destinations, but at least it must ensure flights at the scheduled time," said Vaiya.

The NAC says its plans to expand its services to new destinations to support the VNY 2020.  The NAC which has already resumed flights to Osaka, Japan, is planning to fly to three more destinations - Guangzhou, China, Riyadh, Saudi Arabia and Seoul, South Korea by 2020. "We believe our flight expansion will bring much needed competitiveness in the airfare, enabling many to travel to Nepal," said Madan Kharel, chairman of the NAC.

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