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Tourism |
What’s wrong with today’s consumers? Why won’t they buy what they are offered ? Why won’t they do what they are told? The answer is: because they have choices. They are very willing to exchange one retailer, one airline, one travel agency, one hotel, one country for another if their needs are not met, their desires not served. One thing that is very clear in tourism is that people seldom venture to travel to such place which is never heard of before. Many people argue on the amount of money required to make Nepal known all over the world. And, some think that the amount of money Nepal spends on tourism promotion is peanuts - not enough even to cover one slot advertisement cost in Newsweek and Time. At the same time, it is common knowledge that because of the small size of its economy, Nepal is not in a position to allocate big budget for tourism promotion abroad.
HMG’s tourism promotion budget, which was 4.18 million rupees in 1982/83 and about 5 million rupees in 1995/96 suddenly soared up to 68.03 million rupees in 1996/97, and to 70.04 million rupees in 1997/98. The mammoth increment is explained by the Visit Nepal Year, 1998. Meanwhile, an independent survey conducted by Hari Prasad Shrestha for his book entitled Tourism in Nepal- Marketing Challenges, has recorded that five-star hotels and travel - tour agencies spent 7.3 million rupees and 6.8 million rupees respectively in 1995/96 on promotion campaigns abroad against 5 million rupees spent by the government.
Major spender in tourism promotion is the airline sector. In 1995/96, this sector alone spent 495.2 million rupees. Apart from national airlines, there is no specific budget allocated for Nepal offices of international airlines to spend in promoting Nepal as a destination. Everything is channalised by their headquarters for the promotion of destinations they fly to. The reluctance of the government to spend money on tourism promotion is surprising as the gross foreign exchange earning of Nepal from tourism in 1995/96 was 119 million US dollars (Rs. 952.1 million) which was about 21.4% of the total foreign exchange earning of the country that year. Though the share of tourism in total foreign exchange earning went down to 15.9% in 1998/99, the amount earned from this sector has gone up to Rs. 1216.78 million.
Before the formation of Nepal Tourism Board (NTB) in 1999, the promotion of tourism was completely handled by His Majesty’s Government. With the two per cent tax collected from tourists, NTB is now making the budget size of tourism promotion bigger than it was under the government. However, it seems the government has not yet fulfilled its commitment to provide NTB the matching grant which was agreed in principle. In this context, to hope that the government would also grant a portion of the 10 percent VAT recently levied, is wishful thinking, although tourism entrepreneurs think such a move would be positive. NTB has earmarked eighty million rupees for international promotion for the fiscal year of 2000/01. However, it’s hard to say whether the amount would be enough. As one of the biggest spenders on international promotion of Nepal, NTB’s budget goes everywhere from United States to Australia. But tourism pundits argue that the budget is only a fraction of what is actually required. Since the said budget is to cover all areas of the globe, it’s not enough to cover even twenty five percent expense of media campaigns required. For example, one page single insertion in Newsweek’s South East Asian edition is said to cost between US$ 15,000 and 25,000.
The other major spenders on tourism promotion abroad are five-star hotels of Nepal. Both Hotel Soaltee Crowne Plaza and Hotel Yak and Yeti have promotional budgets exceeding ten million rupees. Hotel de ‘L Annapurna has allocated 8.1 million rupees as its promotional budget for 2000/01. It was recorded in 1995/96 that five-star hotels spent a mere 1.5 per cent of their total earning on promotion. But now almost all five-stars spend between 2 to 3 per cent of their total earning. Hotel Everest View of Shyangboche spends a huge amount of money for its promotion in Japan where most of its promotional activities are carried out by its sister concern and 90 per cent of its clients are Japanese. In many countries, travel related establishments spend as much as 6 per cent of their earnings in promotion. And many hotels go for joint-promotion, collaborating with national tourism organizations and airlines. That is yet to be practiced here.
Among travel agencies and tour operators, Yeti Travels is the forerunner in promotional spending with its promotional budget exceeding five million rupees. Another major spender is Natraj Tours and Travels which spends more than two million rupees. It is closely followed by Shangri La Tour and Marco Polo Travels (Nepal) Pvt. Ltd. which spend 1.9 million rupees and 1.8 million rupees respectively for tourism promotion abroad. It is difficult to assess the total amount of money that the private sector spends on promotion as there is no such agency in Nepal deployed to keep this record. But it can be said that the share of private sector, apart from paying two per cent tourism service fee, is still bigger than that of the government in promoting Nepal as a tourist destination. Even though the size of budget for tourism promotion is getting bigger, it seems it is not enough to compete with other rival destinations as their presence is felt everywhere; in CNN, BBC, Newsweek, Time and so on.
If an international TV channel wishes to shoot in Nepal, it has to pay US $ 1000 to Ministry of Information for the permission, US $ 1000 for Wildlife Conservation Area and numerous other fees. Nepal is caught between a queer paradox. On the one hand it has no money for promotion and on the other it charges huge sums from foreign agencies that would spread the name of Nepal abroad. And, this is the way that Nepal has adopted to promote tourism from which it.
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