|
August, 2004 |
| |
|
|||
|
||||
|
Tourism |
|
Nepal's
Tourism Are We Really Serious? by Basant Raj Mishra Most countries have understood the value and importance of the tourism industry. The statistics of World Tourism organization reveals that globally tourism employs one out of nine persons. It is bigger than the global oil or defense industry with turnover of roughly 5 trillion dollars. Regionally, the fastest and most successful countries have tourism as their economy’s backbone. One only needs to look as far as to Thailand, Singapore, Malaysia and China. Now, India is trying to compete with other Asian giants in tourism and it is coming with mega budget and working on branding India as a popular tourist destination. In the context of Nepal, it is difficult to say how much this industry has actually been contributing to GDP as Nepal lacks reliable tourism related database. We have not been able to develop a tourism satellite accounting system as yet. However, as per whatever the statistics is available, Nepal is expected to earn at least USD 232 million in foreign exchange from tourism in 2004. Nepal Rastra Bank statistics show that tourism brought in USD 116 million in the first six months of 2004 and historically, the second half of the year has always shown higher foreign exchange earnings. How
popular is our destination? Over the years the demand for travel to Nepal has diminished considerably due to negative publicity, violence, political instability, negative travel advisories and other social issues. Our country’s image as a fine, safe and peaceful destination has been eroded. Moreover, stiff international competition with new players emerging both on the adventure and cultural fronts and unhealthy domestic competition have added fuel on the fire thus making the tourism industry more complicated and insecure. As such, it is but natural to anticipate the future of this industry to be uncertain. The hard reality is that at present the tourism entrepreneurs are struggling to survive. All industries are subject to the caprices of the business cycle with periodic peaks and troughs. But successful institutions will be prudent enough to realize or foresee the situation and act accordingly. The million dollar question is – how seriously have we understood the circumstances and realized that we have not reached the bottom of the problem as yet? Our industry is very much tied up with the political scenario at this point of time. It is a foregone conclusion that peace is the number one prerequisite for the tourism industry. Security is the first concern of any traveler when selecting a holiday destination. To retain our business we must be able, at least, to discuss the following pertinent issues. Crisis
Management Cell It is imperative that we set up an effective and efficient Crisis Management Team as history stands testament to the fact that only those countries that have established mechanisms to handle crises and manage their reputations have been able to sustain their tourism industry in the long run. Efficiency in communication is of utmost importance. Remember, it is not the big that shall eat the small, but the fast that will consume the slow. Improve
Accessibility Even if the demand for a destination is phenomenal, it is of no use if the potential visitors eventually are not able to reach that destination. To the short-term target of 500,000 tourists a year we must have 1400 tourists arriving everyday. To get to this magic figure we must encourage additional flights and most specifically encourage charter operators to come to Nepal. We should not forget the fact that tourism is a seasonal business. The demand for air seats will be high during the peak period and low during the rest of the season. Therefore, we must be ready to cater according to demand. Let us not forget, only those countries have been successful in this industry that have strong national carriers. Therefore, it is imperative that we strengthen the national carrier and turn it into an airline that can become Nepal’s brand ambassador as well. The real need of the hour for the national carrier is to add fleet before deciding on anything else. Re-branding
Nepal Nepal has never been marketed in a professional manner. Since the beginning of tourism in Nepal, our marketing has always been haphazard. We have changed and introduced brands without doing the required research on customer expectations and often based it on whims and fancies. We need to be smart and piggyback our marketing campaigns on those of our neighbors, including India and Thailand, who have enormous marketing budgets. Increased marketing expenditure will raise the profile of and demand for our tourism product and this should be viewed as an investment in the future. The government cannot expect increased tax revenue if it consistently fails to support this industry in its hour of need. Let us not forget, the government and donors stand to reach their objectives (such as poverty alleviation) from the success of tourism industry, as the recovery of the tourism industry will bring economic benefits to people right down to the village level. Create
a Congenial Environment We must work on gaining a national consensus to declare tourism as the National Industry of Nepal and place the tourism sector on the list of Essential Services Act – freeing it from threats of industrial strife. First impressions last! Tourists arrive to and depart from very confusing and mismanaged Trbhuvan International Airport (TIA) and this poor impression of the TIA is what they carry home with them. Allowing Tour Operator representatives to meet and greet tourists to effectively ease their passage into and out of the country will mitigate this to a large extent. Beggars and hawkers must be removed from the airport and the highways must be strengthened to ensure smooth overland travel. Wreckages and hulks must be cleared away from the TIA and the roads. Remove
VAT Threshold, Widen TSF Net The policy of dual taxation must be removed. What does the government gain by penalizing taxpayers? In reality, this misguided policy is a disincentive and heightens resentment towards the taxation regime. It encourages leakages, and thus deprives the government of revenue, shrinking government coffers. The government policy of tax discrimination is causing the mushrooming of small and illegal operators who do not pay VAT, TSF and even income tax. Enhance
competitiveness In this WTO era tour operations are open to Foreign Direct Investment. Multinationals and transnationals are now able to own up to 51% of the stock in Nepali companies. They will arrive with huge budgets for marketing and investment in infrastructure like vehicle fleet and communication equipment and can spark off a negative price war to corner market share and edge out existing tour operators. Allowing duty free import of modern vehicles and communication equipment will enable the existing tour operators to face the stiff competition that the entry of large transnationals could bring. An
alternative thought It has been witnessed in other countries that the bonding of tour operators can help the industry by providing an available measure of mitigation in the event of default by tour operators in providing contracted services. Increasing number of international tour operators are working only with bonded tour operators in the destination countries and where none exist – like in Nepal – they avoid the destination altogether as there are no guarantees. Preserve
for Posterity Nepal’s World Heritage Sites are constantly on the “Heritage Sites in Danger list”. We must realize that these are the dreams that the tourism industry must continue marketing for generations to come. Immediate steps should be taken to ensure the preservation of these precious sites on a priority basis. Join
Hands The tourism industry of this country has always been fragmented even at the best of times with each sector trying to jockey for a more dominant role. Data indicate that the biggest contributor to the foreign exchange earning of the country is the Free Individual Traveler (FIT) segment with over 41 million dollars spent in the first six months of this year. The airlines bring in about 31 million dollars, travel agencies and tour operators bring in roughly 30 million dollars, hotels bring in 4 - 5 million dollars and trekking and rafting companies bring in 3 – 4 million dollars. This indicates that the best and most profitable tourists are not coming to Nepal. We must, therefore, forget our petty differences and rally to get back on our feet. The nature of this industry is so delicate that minor jitters in either the national or international environment can have a telling impact on it. Furthermore, the tourism industry cannot sustain itself or flourish in isolation. So, to ensure that we get the anticipated support from all quarters, both the private sector and the government must work together. We must build a common agenda that will impact the whole tourism industry positively and keep pushing this agenda until we accomplish our goals. Then only we can build a new common agenda as the time demands and then start pushing those new agenda. We cannot afford to give up on the tourism industry. At the end, my submission is not to be taken as pessimistic or optimistic but we must be realistic and realize the fact of life and be prepared for the same. The word Peace is vanishing from the Nepali dictionary and instability has been stable in this country. At this hour, all of us should be united to face the challenges of this precious industry as the country cannot afford to give up on tourism. (Mishra is incumbent President of Nepal Association of Tour Operators – NATO) |
|
Cover Story
| Editorial | Business News | Biztoon |
Sectoral
| Political | No
Laughing Matters | SME Focus | Corporate
Focus | Tourism |
Economy & Policy | Young
Achiever | Marketing | Stock Taking | Interview | World Trends |
|
Send your feedback to the editor: bizline@mos.com.np |
