Wednesday, July 16, 2014

Twin troubles in Nepal’s tourism sector

Here is an article, written by Deepak Adhikari, about the troubles faced by the travel and tourism sector following the deadly avalanche on Everest’s Khumbu Icefall and the closing down of casinos.

Excerpts from the article:

[…]The unprecedented halt to climbing on Everest, the world's highest mountain, has dealt a serious blow to Nepal's tourism industry, still recovering from a decade-long Maoist insurgency which ended only in 2006. But the mountaineering dispute is not the only area of conflict in the country's troubled travel and tourism sector.

Hopes of a casino-led gambling boom have faded as all 10 of the country's casinos have either shut for lack of business or closed their doors in a row over government regulations. The national tourism board has only recently reopened after months of conflict with private businesses alleging official corruption and incompetence.

[…]According to the tourism ministry's mountaineering industry division, 300 climbers from 32 expedition teams were at the Everest base camp when the avalanche struck. They promptly left the country. Another 500 had received permits to climb Everest and nearby mountains Lhotse and Nuptse in the spring season. These cancelled their Nepal visits outright.

[…]Chandan Sapkota, a Kathmandu-based economist, said the Everest problems could even force some Nepalis to emigrate. "The slowdown in this sector affects government revenue, foreign exchange earnings, seasonal employment, hotel and restaurant businesses in key tourist hubs around the country, trekking activities, and the aviation sector," he said. "If the slowdown persists, then in the absence of alternative employment opportunities, low-skilled workers might be forced to seek employment abroad."

Travel and tourism contributed more than 8% to Nepal's gross domestic product in 2013, according to the World Travel and Tourism Council, based in London. By some estimates, more than a million Nepalis are directly or indirectly employed by the travel and tourism sectors.

[…]Alongside the problems in the mountaineering industry, however, Nepal is also facing a crisis in its 40-year-old gaming industry. Seven of the 10 casinos shut in April after the operators failed to comply with new regulations introduced in 2013. Three closed last year -- two because of the revised rules and one after a labor dispute.

The new rules require casinos to have paid-up capital of at least $2.5 million, with a minimum of $1.5 million for the country's 17 slot parlors, known as mini-casinos, which are located along the porous Indian border. All of these also shut their doors because of the new regulations. There is also a new annual license fee, paid to the tourism ministry, set at about $207,000 for casinos and just over $100,000 for mini-casinos.

[…]Bhatta said the overstaffing was worsened by further hiring forced by the Maoists, who in the case of one casino forced it to hire 200-300 people from 2008 to 2009. The Maoists' demands "proved damaging to an already overstaffed operation," Bhatta said, estimating the excess labor force at about 40%.

[…]Officials say that about 11,000 casino employees have lost their jobs. But there is also a serious impact on the wider tourism industry. The casinos drew an estimated 150,000 tourists a year, filling about 15% of rooms in five-star hotels in Kathmandu. Occupancy levels are down by about 10%, according to analysts.