Cover-Feature

Too many cooks spoil the broth. Perhaps this is the case with Nepal’s travel trade sector. With some 600 travel agencies in Kathmandu registered with the authorities and many others operating without any proper registration, this sector seems to be already overcrowded. Added to them are trekking agencies and rafting agencies. And the strategy that these agencies are resorting to for survival in the highly competitive environment is to undercut the rates. As a result, the prices of all the tourism products in Nepal have been going down steadily over the years.

Int'l Competition

The flipside of the situation is that with the competitors emerging in other countries – Thailand, Vietnam, etc – in the traditional products, Nepal has to keep its rates competitive at international level. As one tour operator views, the foreign agencies that provide tourists to Nepal maintain that Nepal is coming to the normal level of what it is actually worth. That means previously Nepal was charging an abnormal price.

The situation was not like this some thirty years back when most of the agencies were starting their business. The country was a Shangri-La, and unlike today, those were the days when the customers would come to the agencies searching for them. It was because Nepal’s tourism business had originated that way. In most of other countries known today as some of the prime tourist destinations, the business started after the government and the business community meticulously worked to create tourism business by first establishing institutions like hotels and travel agencies and setting up other physical infrastructure. Tourists started visiting those countries only after that. With Nepal, it was the other way round: tourists were coming here even before there were hotels or agencies. Only after there was demand felt for such outfits did some entrepreneurs, prominent among them being some foreigners, spot the opportunity and set up hotels or travel agencies. In some instances, the hotels themselves set up travel agencies. Later, it also happened that some pioneering travel agents went on to set up their own hotels. Many such interlinked hotels and agencies are still in operation and some of them are the market leaders in terms of business volume. Yeti Travels, that was interlinked with Hotel de L’Annapurna, before it went into the management of Taj Group that is operating the hotel now, holds some 50% share in the total business volume of this industry, it is believed.

Interlinked hotels and agencies indicates the ideology that is governing the travel business here: hotels want to eliminate the middlemen, and travel agencies feel that hoteliers are getting all the benefits from the groups that agencies bring here after so much effort. The other possible explanation to the phenomenon may be that there is a vertical integration going on in the industry. But such integration may not always be beneficial to the players concerned, point out observes. This view is also shared by the travel agents and tour operators (see interviews in boxes).

Despite some agencies being as old as 30 years or even more, observers point out that they have not been able to develop as institutions. Almost all of them run a "one man" or "one woman" show. Commenting about it, one operator says, it is impossible to develop a second man in Nepal’s travel trade firms. The would-be second man will eventually open his own separate agency. Many famous names today in this trade are set up by persons who were working as employees or partners in some old agencies. The trend is still continuing and perhaps this is the major reason for the mushroom growth of these agencies. This also indicates that each agency is dependent on one key person who is also the owner. Moreover, most of them are also the "Mom & Pop" types – husband and wife running the show, with sons and daughters posing as assistants. Obviously, such agencies may not develop enough professionalism. In the opinion of the observers, this is because it needs a very small investment in physical infrastructure to set up a travel agency (if it is doing only ticketing). However, the required investment for tour operating agency would be substantially higher because a lot of equipment are required for it, thus creating some entry barriers. Therefore, most of the successful travel agencies are gradually specializing as tour operators only. Tek Chandra Pokhrarel, a veteran in the business, says his companies (Himalayan Journeys and Shangri-La Tours) have very insignificant revenue from ticketing as his business is primarily in tour operations.

One important change in the situation of this business now over its past is that the agencies are very much independent of Indian travel and tour operators on whom they once used to depend for most of their business. It is said that only about 20% of the business now depends on Indian tour operators. This was the result of the Nepali agents’ cultivating links with the agencies in major tourist originating areas, such as Europe, USA and Hong Kong. In the process, they also cultivated links with international airlines of which they are PSAs and GSAs now. For example, Marco Polo Travels Nepal represents three such airlines (see table) and also is the appointed agent in Nepal of OAD Reizen, the largest Dutch-owned tour company in Holland, according to Subodh Rana, the Managing Director of Marco Polo Travels Nepal. In fact, as Rana points out, the company was started targeting to tap tourists directly from Hong Kong. Later the Hong Kong company itself closed down, but Marco Polo survived because it already had developed European connection by that time. Almost similar is the case with those other agencies that are GSAs or PSAs of foreign airlines.

The second factor for reduced dependence of Nepali travel agencies now on their Indian counterparts is that the Indian tourists visiting Nepal do not feel the need for agency services. That may be because, as a survey carried out for NTB some year back showed, most of the Indian tourists coming to Nepal are from Northern India. So they find Nepal quite a familiar place to visit independently.

More important of the reasons may be the fact that unlike in the past when the tourists came to Nepal under an Indian package, now Nepal has been recognized as a destination in itself and the travel agencies and tour operators can sell Nepal packages directly at the tourist originating regions. Moreover, Nepali agencies are now selling not only Nepal, but also Tibet and Bhutan.

Challenges

Looking at the competition that is emerging in other parts of this region and also elsewhere, particularly in adventure tourism, Nepali tour operators appear to have only two options to make the same profitability in their business as in the past - reduce the rates for the traditional products (in which there is competition emerging from other destinations) and develop new exclusive products (which could be sold at premium). Perhaps a third alternative is also emerging – that of MICE tourism, which is already developed in other destinations, but Nepal can still try for its own share of this pie.

As a recently released NTB Survey based on answers from a sample of departing tourists has indicated, majority of visitors toured Nepal independently. Among the Indian tourists in Nepal 73% were independent travelers. Similarly, 64% of US nationals, 69% of British, 65% Germans and 62% Japanese did not come under packaged tours sold by Nepali tour operators. This shows that a huge market in the existing major sources of tourist origin is still untapped by Nepali companies.

Another find of the survey, carried out by international research firm ORG-MARG’s Nepali subsidiary during April this year, showed that though the average length of stay of tourists in Nepal was now 16 days, the independent visitors stayed longer (15 days) while those on packaged tours stayed for only 13 days in average. Among the sample size of 1108, it was found that independent travelers are more likely to visit Nepal again than those who came in packaged tours.

Though the findings of the survey may be challenged as it was a survey conducted in a particular months of the year and so the findings may not report the views of those visiting at other points of time, it however indicates to some areas for improvement in the style of the business that Nepali travel and tour operators are following.

All these are the challenges that a fragmented, and so, weakened community of Nepali tourism business has to face in the days to come. Examples of the division are everywhere. After the government set up the Nepal Tourism Board (NTB) to market Nepal more effectively by pooling the resources of the private and public sector, some quarters of tourism industry have found an easier target to criticize. Thus there are two groups – one is only criticizing NTB, while the other is only supportive of it. A third also may be found that wants to be more objective by simultaneously criticizing and supporting NTB.

Another example of this division can be seen in the formation of business associations. Some members of NATA have formed a separate association – Nepal Association of Tour Operators (NATO) – complaining that NATA was being influenced by small companies that have different vested interests. For that reason, NATO is kept a somewhat exclusive club - only those can be members who have a turnover exceeding Rs. 3 million per annum. Pokharel says many travel agencies are not registered under VAT and so they pay neither VAT nor the Tourist Service Charge (TSC) that goes for the funding of NTB’s activities to promote Nepal in international tourism market. According to the VAT rules, any business unit with annual transaction over Rs. 2 million has to register under VAT. "If your sales in a year are below that figure, how are you surviving?", wonders Pokharel. According to him, only about 51 travel agencies and about a dozen trekking agencies are paying the 10% VAT. Thus, he implies that these agencies are contributing to Nepal gaining status of a cheap destination as they can easily bid out other agencies by quoting over 12% less to the tourists (10% VAT and 2.5% TSC).

Hotel Service Charge

Another challenge is developing at present in the form of 10% service charge on hotel and restaurant bills – a demand that the trade unions have been pursuing more vehemently now. Once this demand is met – the government is said to be ready to introduce the rule providing for such charge – Nepal will be more expensive as a destination, the tour operators say. According to Rana, the hotel bill comes up to be about 70% of the total price of a package. If the hotel cost goes up by 10% as demanded, it will have significant effect on total price of the package. Hotel beds in Nepal are already costlier than in the competing destinations, they argue.

High hotel costs are primarily responsible for low tourist arrival in India, points out Pokharel, who also thinks that India should have very big tourist arrival when considering its size and variety of things that it can offer. "Compared to that, we are getting higher arrivals", he says. Hotels in India are doing well not through huge tourist arrivals but by the support of their corporate clients who do not care much about the size of the hotel bill as it is taken care of by the company and they can be written off as corporate expenses. Such corporate market is not developed in Nepal. Therefore, if the 10% service charge is implemented, many tourists will be diverted to other destinations.

Though reduced (or stagnant, if one wishes to call it so) tourist arrival this year is another problem vexing this sector, Pokharel says that targeting big increase in tourist arrival is not going to do good. Apart from other arguments behind that view, the most important is that the country is not ready to handle a sudden surge in arrival numbers. So, better to have a modest target of 10 or 12 percent annual increase in arrivals, suggests Pokharel expressing his reservation about the government’s so called plan which targets to bring in one million tourists in 2002. The figure is more than double the number of 1999 arrivals. The year 2002 is being observed as Destination Nepal year.

Another challenge facing the business is that of manpower. Though there is enough manpower at junior levels, there is a dearth of skilled personnel required to man the senior positions as pointed out by Pokharel. This view is shared also by ID Rajbhandari. The second man syndrome further complicates the problem. Mukunda Sharma, Vice-President of Nepal Travel Agency, the first such agency in Nepal to go into business, points out the lack of marketing personnel in this business. The problem is serious because, as Sharma also points out, the major success factor in this is marketing. Good marketing personnel have a tendency to go for jobs in sectors other than travel agency or tour operation (such as FMCG or hotels) in search of more glamour.

New Products

Need for developing new products in this business has been repeatedly pointed out by the travel trade operators, and recently there have been some hotel properties at deluxe categories opened - Hyatt Regency in Kathmandu and Fulbari in Pokhara. But the efforts to expand the tourism business to areas other than those where the tourist concentration is the highest (Kathmandu, Pokhara and Chitwan) have been obstructed by the security problem. "We have dropped trekking in western Nepal from the list of products our agency offers because of the Maoist problem", says Rajbhandari.

Development of new products was one of the points much emphasized during the visit Nepal Year 1998. Nepal Tourism Board (NTB), set up at the end of 1998 has now brought out a promotional booklet "Adventure Nepal" listing Bungee jumping, para gliding and the like as some new products developed during this period after 1998.

Meanwhile, NATA has set up two awards (Bhaskar Award and Sagarmatha Award) which is presented to those who contribute to tourism business in different ways. Similarly one other award is to be set up soon to present to those who help develop new products or contribute in the field of bird watching, honey hunting, rhododendron growing and the like, say the NATA sources.

How is Nepal Being Sold?

"We’re formulating a new tourism policy"

What is the impact of such new media as the Internet, through which hotels can be contacted directly?

Travel agencies will be there even tomorrow irrespective of Internet or any other media coming in, because person to person relationship always has to be there in this trade. You will need a travel agency to look after the people. Rather it is positive that due to Internet today, anyone can find where Nepal or Mr. Everest is. And our job is to utilize this tool for the betterment of our trade.

There are two aspects to this. One, twenty years ago we were not being promoted and so we had to rely on the Indian agent to promote our country. So India was a destination and Nepal was an option under the India package.

But today, Nepal is recognized as a destination. And a lot of my tours come directly and not through India. Although the group could first come to India and then to Nepal, our payment is done directly by the company abroad. What has happened in the last decade is that tour operators in Europe have found out that if they come to Nepal through India, the Indian agents put a margin which means a higher cost to the European tour operator. So they come directly to us, and as opposed to about 60 percent earlier, only 20 or 30 percent come through India. To illustrate the point, let us take Tibet’s example. We are now selling Tibet from Nepal all over the world, the gateway to Tibet is from Nepal. But tomorrow Tibet could start doing business on its own through, say, flights from Hong Kong or Beijing. So they would not need Nepal. As of now, we are selling Tibet like India was selling Nepal in the past.

This is a business which requires you to be on your toes always. You cannot relax because you think you are successful today. If something goes wrong somewhere, you are in trouble. So you will have to make sure that the guides, cars and everything else are always on ready condition.

There are travel agencies that are associates of hotels or business houses. How critical is that kind of association?

Sometimes they become losers. Because they have to market only their respective hotels. I, for example, don’t have any hotel, so I can sell any hotel. At the same time, the hotels will also give me rates that are competitive. At times, of course, it is beneficial for a travel agency to be a sister associate of a hotel. But perhaps it is better a travel agency or a hotel to be on its own. There are occasions when I would not like to put a group in a certain hotel because the hotel’s travel agency might try to take away the group from me.

Very bad. It is very difficult to get good qualified manpower. Because, for one, it is very easy to open up a travel agency, the investment required is very low. I used to work for another travel agency and I opened up my own agency after getting the experience there. My own staff could do that tomorrow, that is natural. And that is also one reason why you cannot get a second man in this industry. There is the owner of the company and the managing director but the second man is difficult to find. Because that would be second man will have his own company tomorrow. So you groom a man and he will go away and again you will have to groom another second man. Of course there are companies that give shares to their employees. We also have that system. In our trekking company five of our department heads are directors of the company.

To a certain extent that could be true. For example, I could snatch another travel agency’s group using my contacts. But that operator will not come to me unless he gets a cheaper deal. And he will get a cheaper deal because this company’s infrastructure is not very good. But usually, a good agent would not change his agency. Those that change will always be looking for cheaper rates.

A lot is required. We are talking to the concerned ministry and trying to formulate a policy. The existing policy has been made by different government sectors that do not really know about tourism. We travel trade associations are getting together and formulating a new policy. We will then get the different government bodies, like the finance, foreign, and tourism ministries to interact with us.

I took this company in 1982. My colleagues have been very hard-working and it is because of them that we have reached so far. I have people working with us for long as 12 and 17 years. We are like a family. The growth has been very good since we are GSAs of airlines and so on. The increase of salary of my staff for example, has gone up from Rs. 600 when they joined to around Rs. 18,000 or 20,000. That is what I consider growth and not the money that I make.

There are already a huge number of travel agencies. Do you think the government should stop issuing licence?

You cannot stop issuing licence when you are talking about open markets and liberalization. Everybody has the right to do any business in the country. But the government could put in place rules and regulations that will allow everybody to survive.

"Turning now to China market"

How do you assess the role played by various associations for tourism development like PATA, NATA and HAN?

They are general associations looking after the good of their memberships. So I would not really call these associations marketing associations although they may have marketing wings. Purely marketing associations are also there, like PATA Nepal Chapter for example. PATA is an international association and we already have thirty-five years of experience in the association and we have local chapter. PATA had been doing most of the marketing earlier and making arrangements for Nepali participation in travel fairs, etc. That can continue and we should perhaps take a new turn and see where PATA can be further involved because they can not duplicate the work of NTB. NICA is another marketing association since it focuses in marketing MICE tourism.

How do you find the existing regulatory and institutional framework governing this sector? What suggestions do you have?

Though NTB there might be some grievances in the working style or the money not being spent in a wise manner by NTB, it should be borne in mind that the regulatory part is solely now in the hands of the Ministry of Culture, Tourism and Civil Aviation. That does pose certain problems. There are foreigners coming and operating tours in Nepal, whether they are from third countries like Europe or from neighbouring countries like India or China. They have their offices here. But who is monitoring as to whether they are registered in Nepal and whether they actually getting foreign exchange into the country? There are many areas where we feel that people who do not have the proper licence and authority are encroaching upon the travel agent’s area. This is one serious issue that has to be raised. And NATA, for example, had raised the issues viz the Tibetans that are trading here. There are many other areas that regulatory bodies need to look at.

There are travel agencies, like yours, that are sister associates of hotels or business houses. How critical is such an association for the success of a travel agency?

on’t think it is critical. Because if a travel agency is independent it can do justice to all the hotels. And there is more trust and confidence between that travel agency and any hotel. So travel agencies not branded as a group associate have their advantages. We are not married to any of our products or hotels. We sell all hotels whenever there is a demand. We have no reason not to.

The situation may be getting better but I think it is still inadequate. The type of staff that we get are still inadequate to perform without in-house training. There are two distinct branches in any travel agency, especially if the agency is also a tour operator like ourselves. Here we have to make sure that the tour officers that we get are of a certain quality and caliber. Because most of the time the guests who are booked by Marco Polo only meet the tour officers that are handling the group. So we cannot say that we are good but our tour officers are bad. Because for the guest, the travel agency is as good as the tour officer.

It is said that the competition among travel agencies is the prime cause for making Nepal a cheap destination. What is your comment?

To a certain extent that could be true. But that, I would say, is pointing at certain weak accounts that are always shopping for better rates. Generally speaking, I would not say that that is true. Simply because we are not competing only with ourselves but also with other countries. So on numerous occasions we cut down rates not to compete each other but because there is no choice as we have to compete with such countries as Thailand and Singapore. It is as simple as that.

Our agency was started in 1984 looking at the potential of Hong Kong tourists coming to Nepal. That was the main focus and we did very well as we found a young enterprising gentleman in Europe who was very eager at that time to offer Nepal as an adventure destination to young people. With this, there was a very big growth in the 80s. And by the time we came to the 90s, the Hong Kong Chinese market was very well established. Then we started focusing on other areas, especially the Scandinavian countries and also countries in Eastern Europe which were getting liberated. We also focused on all the Chinese-speaking areas in Asia itself – Thailand, Malaysia and Singapore which was giving us good business. By the mid 90s, unfortunately the old Hong Kong connection was broken since the agency we were working with there closed down. But we found new markets and we grew. Then ultimately now the biggest connection we have with the outside would is Holland. Because we have Transavia Airline flying here two times a week which we represent as GSA. With the airlines, we also have the largest Dutch tour operator called OAD Reizen. We handle all their clients here. So we have significantly developed our expertise. We have invested in office base which is our own building. We have also invested in manpower and we have some very good manpower at the management level. We have 42 staff and we are growing. And we are also happy that we have been able to sustain this growth over the past couple of years regardless of what the state of the tourism industry in the country has been.

We are now going at quite a fast pace. Because one of the areas we are looking at is the summer market in Nepal. We have seen that the traditional American and European market does not come in the summer. In this respect, we are looking at China. It has opened up its economy and its outlook on life. Tourists are going abroad. And Nepal can get a significant number of Chinese tourists since the Chinese government has recognized Nepal as an outbound tourist destination. So this is going to be our next big thrust. And with our past experience with Chinese speaking tourists, I think we can do very good business with China.

"Better have modest targets"

In the last 20 or 25 years, Nepal has emerged as a very good destination. About a year ago, the Time magazine had presented Nepal as one of the hottest destinations for tourists. Recently, a research institute in USA found out through a survey that 27 percent of the Americans would like to visit Nepal. That number is very big for us. But we have not been able to work out as to how we can bring in those tourists.

What opportunities came and went in the business in the past and what lessons have we learnt?

We have never been able to learn any lesson. Some twenty years ago when I was the Chairman of NATA, the conclusions of its three or four annual conventions was that our biggest markets were India and China. And despite both being our neighbours, we had not been able to concentrate on them. So we failed to learn. And there is a decline in tourist arrival today. It is today cheaper for Indians to go to Bangkok or Singapore than to Nepal. People can fly into Nepal only by Indian Airlines or RNAC. And Indian airlines has not been interested in reducing its rates. On the other hand, there are a number of airlines flying to Bangkok and Singapore willing to cut down their prices. The hotels are also not so expensive there. So although we saw the potential of regional tourism, we were unable to do much.

Singapore has been doing it. Singapore is a very small destination. And other than shopping, they don’t have much to offer. So in order to promote themselves, they have been promoting Nepal, Indonesia or Bangkok in the same package.

People have been pointing fingers at NTB. But I think that since the private sector has been given the majority in the Board, it is up to us to develop and improve NTB. Also, many times, the demands of the private sector have been unreasonable. For example, out of some 400 registered travel agencies and trekking agencies, about 125 in each category, are in operation. Of that number, only about 51 travel agencies and some 12 or 13 trekking agencies are paying the 10 percent VAT. Other agencies also do not collect the tourist service charge. This will enable them to quote around 12.5 percent less rate than those agencies that are registered under VAT and charging the tourist service fee. This has also resulted in a division between those agencies that pay VAT and collect tourists service charge and that don’t. In my opinion, all businesses must pay VAT. This is a very scientific tax system. And if it can be properly implemented, the government may be able to bring down other forms of taxes such as income tax. Also, VAT and tourist service charge is not being paid by the travel agency or hotels but by the tourists. And our responsibility is to ensure that the money is properly utilized in tourism promotion. We must see the money as a trust fund.

What is your view on the 10 percent service fee that trade unions are demanding to be added on hotel and restaurant bills?

The service fee is subjective and paid on the basis of whether you are giving good service or not. Tourists generally give five or ten percent as tips. But if the service is not that satisfactory, tourists may not tip at all. Therefore I think that making the tip mandatory here is not a good move. It should be established as a custom rather than making it legally binding. As far as the implication on the travel trade business goes, this will automatically result in the destination cost going up. Because in addition to the 10 percent VAT and 2.5 percent tourist service charge (TSC), the tourists will have to pay 10 percent service fee.

There is a training institute in the government sector called something like Nepal Academy of Travel and Hotel Management. The name itself is difficult to remember. And we feel that this might give the impression that we Nepalis are not even capable of thinking of suitable and easy name. We are even facing the problem in finding enough names to nominate 8 candidates to NTB out of which the government has to select five. There is ample manpower but not efficient manpower. And if we are not able to develop that manpower, we will be facing big problems tomorrow. There is quality manpower at the junior levels. It is our responsibility to recognize, groom and train them.

It is said that the cutthroat competition among travel agencies is responsible for making Nepal a cheap tourist destination. What do you have to say?

This is true to an extent. But tourists believe that the travel agencies are now offering the authentic prices and not overcharging them. They view that earlier we were giving them artificial prices but with liberalization we have brought down our rates to what they should realistically be. That means that they feel they are getting good prices now. Similarly, hotels are offering the foreign agencies or the tourists prices 20 or 30 percent lower than what they offer us. That means, according to their prices, the country is earning between 20 and 30 percent less foreign currency than it should. And this is being done by 5 star hotels, not 4 or 3 star hotels.

There are different prices for different tourists. What we have to understand is that if we are getting tourists that prefer to be put up in hotels in Thamel, we are also getting ones who would go to Hyatt or Fulbari. So if there is product degradation on the one hand, we have also been able to develop products like Fulbari and Hyatt which cater to the upper end of the market. We have been saying that we need a million or ten million tourists, that I think is sheer nonsense. If we are able to foster a growth of 10 or 12 percent a year, it will be ideal for us because we will be able to manage things properly. We have less than 500,000 tourists coming to Nepal for whom we don’t have, for example, enough buses to take out for sightseeing, or the government has not been able to provide space for parking the buses near the monumental sites in the cities.

We started in 1978. Prior to that I was with Trans Himalayan Tour for 10 years where I worked as Director, MD and Chairman. Then we broke off and set up Himalayan Journeys and Shangri-La Tour. Our concentration is more on adventure travel. We have been inclined specially towards trekking. We are also involved in restaurant business (Rum Doodle at Thamel). As far as growth is concerned, it is quite slow at about 10 or 12 percent. But we are comfortable with that.

Travel Agency Inside The Net

Despite stiff competition, travel agencies have never ceased mushrooming in Nepal. In the name of free competition, price undercutting has become a slogan that everybody wishes to pronounce. Since there is virtually no control over the price by any government agency, everything is all topsy-turvy. This kind of paradox has brought a major question mark in the travel agency business itself - whether to keep quality or to lower price. Because of laxity on the part of government’s policy, it is losing a great deal of revenue due to cheap price and tax evasion. In fact, travel agencies are caught between unhealthy home competition and the booming Internet booking.

In the recent years, consumer use of the Internet to plan travel and make reservations has risen dramatically. According to the Travel Industry Association of America, 52 million people used the Internet in 1999 to plan travel, a 54% percent increase from 1998. Sixteen and a half million used the Internet in 1999 to make reservations, a 146 percent increase. Internet research company PhoCusWright reports that US consumers spent over $7 billion in 1999 on travel bought on the Internet, up from $2.6 billion in 1998. Internet bookings represented 5.4 percent of all airline bookings in 1999, up from 1.9 percent in 1998.

The direct Internet booking has threatened to destabilize travel agencies worldwide and Nepal is not an exception. While consumers remain cautious about the reliability of information, the prospect of hidden fees and insecure credit card transactions, travel shopping on the Web is increasing, particularly as suppliers such as hotels and air carriers offer exclusive fares on their own Web sites with 24 hour accessibility and retailers continue to develop creative ways to sell travel services, e.g., Priceline.

Lately, hotels are getting direct bookings from customers through Internet because they find it cheaper than buying it from travel agents. Online booking which opens twenty-four hours a day is slowly creeping into the travel business of Nepal. However, it has not yet affected Nepal’s tourism much. Bookings are still made through travel agencies. In the absence of clear demarcation between travel agent, ticketing agent and tour operator by the government, it is very difficult to predict the impact of Internet on travel agency.

Of late, the price war among travel agents has surfaced clearly. It is quite obvious that the small travel agencies, which don’t pay VAT and Tourism Service Fee, quote lower price, making their tariff very attractive. On the other hand, big and reputed travel agencies have their own problem as they have their own set of standards which they cannot degrade by providing poor service. The cutthroat competition has been escalated by non-registered travel agencies, which have no liabilities towards clients as well as to the government. In many countries, it’s necessary for a travel agency to have group insurance for tourists. However, in absence of a good monitoring and supervising policy of the government, the unscrupulous activity of some travel agencies has given bad name to Nepal’s tourism, which may tarnish the image of Nepal. I have personally received a complaint from an American tourist who was provided poor service by a travel agency. At a time when Nepal’s tourism is on the threshold, it is imperative to take certain stern measures by the government to ensure the quality service to tourists.

Unlike hotels, the service provided by a travel agency is intangible. It is really difficult to assess the value for money once it provides the service to a client. So there is a need for constant monitoring to maintain certain standard of a travel agency in terms of service it provides to the client. After the deregulation of tourism sector, travel agency has become such a trade that any Tom, Dick and Harry can open with minimum investment and zero risk. Last year a friend of mine from Singapore arranged her travelling to Pokhara from a poorly managed travel agency. Though she paid the quoted sum the bus that took her to Pokhara was worse than she could imagine and the hotel room was just as unimaginably mismanaged. She cut short her tour and came back to Kathmandu. And, above all, the travel agency refused to refund her money. There are thousands of tourists who are being cheated by these kind of travel agencies every year. Lo and behold! There is no agency to look after it. As far as value for money is concerned, the travel agency should be held accountable and responsible for mismanagement and poor service. And, there should be a department where tourists can lodge complaints about it with proof so that they can get their money back.

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Hotel or Business House	Travel Agency
Dwarika's	Kathmandu Travels
Himalaya	Trans Himalayan Tours
Hotel Malla	Malla Travels
Hotel Shanker	Shanker Travels & Tours
Jomsom Mountain Resort	Mystique Himalayan Travels
Jyoti Group	Suruchi Travels
Kantipur Temple House	The Explore Nepal
Keyman	Saathi Nepal
Nanglo	Caravan International
Narayani	Four Seasons Travel
Marco Polo Business Hotel	Marco Polo Travels Nepal
Radisson	Himalayan Travel
Rum Doodle	Himalayan Journeys/Shangri-La Tours
Temple Tiger	Venture Travel
The Everest Hotel	World Travel
Shangri-La	Tours of Enchantment
Yak & Yeti	Nepal Travel Agency

A destinations for:	Competitive Ddge over other destinations
Sightseeing	Weak
Culture	Strong
Trekking	Strong
Wildlife Safari	Strong
Pilgrimage (Kindu & Buddhist)	Strong
Adventure	Weak
MICE (Meeting, Incentive Holidays, Connections & Exhibitions)	Weak
Shopping

Amaravati International	Cathay Pacific- PSA, Dragon Air - PSA
Marco Polo Travels Nepal	Transavia - GS AMalaysia Airlines - PSA Aeroflot - PSA
Persident Travels	Gulf- Air GSA, Quantas - PSA
The Explore Group	Ladua Air (Austrian Air Group) -GSA American Air - GSA
Venture Travels	Qatar Air - GSA
Zenith Travels	Dragon Air - PSA

	1975	1999
Package tours	$ 425	$ 165
Trekking	$ 150	$ 25
Rafting	$40	$ 20

Too Many Cooks

Challenges facing the country's tourism sector have forced the travel agencies and tour operators to reorient their focus to areas of specific strengths. Shall they be able to adjust to the changed circumstances?