The Soaltee Kathmandu, a luxury fivestar hotel in Nepal’s capital, is one of the country’s most iconic hospitality establishments. The hotel expanded its operations beyond Nepal earlier this year with the opening of The Soaltee Westend Messe Frankfurt and The Soaltee Westend Premier Messe Frankfurt in Germany through hotel service agreements. At home, it is managing six properties across the country. As The Soaltee Kathmandu looks abroad for growth, Mukul Humagain and Tamish Giri from New Business Age sat down with Sudarshan Chapagain , Vice President of Soaltee Hotel Limited, to discuss the hotel’s expansion strategy, post-COVID recovery, and future plans. Excerpts:

In recent years, The Soaltee Hotel has expanded into managing various properties across the country. What prompted you to venture into hotel property management under The Soaltee brand?

Our decision to expand into property management was driven by our vision to strengthen The Soaltee brand’s presence and ensure consistent quality across Nepal. As a leading hospitality brand, we saw an opportunity to leverage our expertise to enhance properties across the country. This expansion not only upholds our renowned standards but also diversifies our portfolio, benefiting both the brand and property owners. Ultimately, it aligns with our goal of making Soaltee synonymous with quality, luxury and exceptional service.

Starting 2025, you are overseeing two properties in Europe. How did this expansion come about? Do you believe Soaltee can achieve global recognition like other international hotel chains?

Our expansion into Europe is the result of years of strategic planning and a strong foundation built in Nepal. We have established a solid reputation by demonstrating both our expertise and maintaining high hospitality standards. This move is a natural progression as we bring our exceptional services to international markets. We firmly believe that Soaltee can achieve global recognition by leveraging our success in Nepal and expanding into key destinations. With our commitment to customer service, innovation and cultural relevance, we are well-positioned to make a lasting impact globally, much like other major international hotel chains.

The Soaltee Hotel has grown into a leading industry brand, now competing with international chains. Initially managed by global brands, Soaltee later transitioned to self-management. What inspired this shift, and how has the transition been?

The transition from international management to self-management was driven by our desire for greater control over operations, brand identity and the overall guest experience. Managing our brand has allowed us to tailor our services to better reflect Soaltee’s values while strengthening our position in the industry. The transition has been smooth, thanks to the expertise gained from past collaborations with global brands, combined with a strong local perspective and a dedicated team. Our success lies in seamlessly integrating international best practices with local insights, ensuring a distinctive and memorable experience for our guests.

Where do you see the brand Soaltee in the next 5-10 years? What are your key plans for growth and operations under your brand?

Over the next 5-10 years, we envision Soaltee as a globally recognized luxury hotel brand with a strong presence in key international destinations. Our focus will remain on expansion, both within Nepal and in markets with a rising demand for high-quality, culturally rich hospitality experiences. Our key strategies include forging strategic partnerships, increasing the number of properties under our management and continuously enhancing our service offerings. Additionally, we will prioritize sustainability, innovation and digital transformation to ensure Soaltee remains at the forefront of the competitive hospitality industry.

With more international hotel brands entering the market, what challenges do you anticipate in competing with them? How is The Soaltee positioning itself in this competitive landscape?

The primary challenge in competing with international brands lies in differentiation. Our strength lies in Soaltee’s deep-rooted heritage, exceptional service and the personal connections we foster with our guests. We position ourselves as a premium choice for travelers seeking both international standards and authentic local experiences. To stay ahead, we will continue investing in innovation, technology and sustainability, ensuring that Soaltee remains not just competitive but a leader in Nepal’s hospitality sector.

Do you believe the hotel industry will yield strong returns for investors in this competitive landscape? Given the ongoing challenges in the tourism sector, can these new hotels sustain themselves?

Nepal's hotel industry has seen a significant increase in room inventory with the entry of new hotels and international brands. However, demand has not grown proportionately, posing a major challenge in the coming years. While investments in the sector hold strong potential, their success will largely depend on how effectively all stakeholders—hoteliers, the government, and travel and trade entrepreneurs—collaborate to drive demand.

To ensure long-term sustainability and profitability, it is essential to identify new markets, develop more experiential offerings and implement impactful marketing strategies that position Nepal more aggressively as a preferred travel destination. A coordinated approach focused on increasing business volume will be key to sustaining these new hotels in a highly competitive market.

The tourism sector has rebounded post-COVID, with data showing significant recovery which is reflected in Soaltee’s strong performance, increased profits and higher dividends. What strategic decisions enabled this growth?

The COVID period was a challenging time marked by high operating costs that made profitability difficult despite steady revenues. Recognizing the need for strategic changes, we identified areas with high operating costs and focused on reducing wastage. While many opted to hold their funds in banks, we chose to invest in renovations, particularly upgrading the hotel’s lobby. Unlike room renovations, which can be done while a hotel remains operational, refurbishing the lobby requires temporarily closing the hotel. We saw this as the ideal opportunity to enhance a space that would leave a lasting impact on our guests.

During COVID’s uncertainty, with no clear timeline for salary payments, we introduced a golden handshake program for senior employees. This initiative provided them with seed money to invest elsewhere, helping them transition. Over 200 employees participated in the program, costing us around Rs 300-400 million. But it was a necessary move to streamline operations.

Following this, we brought in a younger, more energetic workforce. While this came with challenges, particularly the lack of experience, we addressed it through rigorous, continuous training via our in-house Learning and Development Department, where certified trainers equipped new staff with essential skills.

We also prioritized digitization by introducing digital check-ins and installing interactive screens to enhance guest experience. Sustainability became another key focus, with initiatives like installing solar panels and becoming Nepal’s only hotel with its own water bottling plant, thanks to our reverse osmosis system. These efforts collectively contributed to our strong post-COVID recovery.

Post-COVID, there has been a shortage of quality hospitality staff. How has this affected the sector, including Soaltee. How are you addressing it?

The growing number of hotels has intensified competition for skilled workers in Nepal's hospitality sector. Poaching has led to staff demanding significantly higher salaries, sometimes double their previous way, creating an unhealthy market dynamic. This imbalance between the growing demand for skilled workers and the limited supply has only worsened the situation. Employees are often paid beyond their skill level, and when they fail to meet expectations, they frequently move from one job to another.

To tackle this, we have invested heavily in training programs to quickly upskill our workforce. A key strategic move was establishing Gate College, Nepal’s top hotel management institution, where I serve as the chairperson. We treat the college as a talent pipeline, adapting curriculum to provide students with real-world experience by integrating them into our hotel operations. This initiative has been instrumental in meeting our demand for skilled professionals.

The Soaltee is also bringing foreign earnings into the country through management fees, unlike international hotel chains which take licensing and franchise fees from Nepal. What kind of government support is needed to sustain this momentum?

Our international expansion began some two years ago. We engaged with the government early on, and officials were supportive and enthusiastic about our plans. However, securing policy-level approvals took time—around eight months to a year. For example, we required clearance for technology transfer to operate in foreign markets.

Currently, we manage two hotels in Frankfurt, Germany—one with 236 rooms and the other with 50 rooms. Senior team members from our Nepal operations are overseeing these properties, and additional teams are being sent to manage operations. While deploying personnel to Europe has presented some challenges, we are moving forward aggressively. Our immediate focus is on establishing these two hotels successfully. Once we gain confidence in their operations, we plan to expand further internationally.

How many hotels are you currently managing in Nepal, and which properties does The Soaltee own in the country?

We currently manage eight hotels, with a ninth set to open in Birgunj. Additionally, five to six more hotels are in the pipeline. By the end of 2025, we expect to have 13 to 15 hotels in Nepal. Internationally, our goal is to manage 25 to 30 hotels by 2030.

In terms of ownership, we own only two properties—one in Nepalgunj and another in Kathmandu. The rest are under management contracts. The Nepalgunj property is particularly unique—as it is Nepal’s first LEED-certified green hotel. It features an advanced cooling system that utilizes water from an integrated piping network, providing both cold and hot water efficiently

Events have become a major revenue stream for fivestar hotels. How does this trend apply to The Soaltee Kathmandu? Which segment is growing faster—events or room bookings?

We have placed a strong emphasis on MICE (Meetings, Incentives, Conferences, and Exhibitions) events. While room revenue remains a significant part of our earnings, our focus on enhancing food quality and service for events has been steadily increasing. Destination weddings, particularly from the Middle East and India, are becoming increasingly popular in Nepal, and we are catering to this growing demand. In terms of revenue, around 40-50% comes from room bookings and the remaining comes from MICE events and dining.

However, instead of focusing solely on growth rates, it is important to consider guest footfall. Nepal’s hospitality sector is seeing a supply-demand imbalance over the past two or three years. While the number of 4 and 5-star hotel rooms has doubled, tourist numbers have not kept pace. This mismatch presents challenges for both new and established hotels. For new properties with debt financing, high operating costs and lower demand make profitability difficult. This can be addressed only by creating new demand. Collaboration between the government, hotels, and the travel and trade sectors is crucial. Expanding market reach, improving infrastructure, and increasing airline and airport capacity are essential steps. Unless all stakeholders work toward a common goal, it will be challenging to achieve sustainable returns on investment.

(This interview was originally published in   April 2025   issue of New Business Age Magazine.)