NATIONAL7Spotlight Weekly)]

Mission Destruction

As uncertainty hovers over the tourism sector, Pokhara's economy braces for trouble

By KESHAB POUDEL, in Pokhara

The number of foreign tourists arriving in Pokhara valley has declined sharply, causing havoc among entrepreneurs. After Kathmandu valley, Pokhara is a second popular tourist destination of the country. More than 100,000 tourists visited the city last year.

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As the deadlock between hotel employees and hotel entrepreneurs continues unabated, small entrepreneurs in Pokhara are worried about future of their business. More than a third of the population of Pokhara valley relies on the tourism industry. If something goes wrong in the sector, the common people will suffer badly.

"I believe the dispute in the tourism sector will be solved without disturbing the industry," said Ram Bahadur K.C., chairman of Chautari Hotel. "We must not forget that the country will lose substantial revenue if something goes wrong in the sector."

Mired by a series of crises over the last year, tourist arrivals decreased by 10.61 percent in 2000 compared to the previous year. "Although there has been a slight positive growth in third country arrivals, Indian tourist arrival has dropped drastically during the same period," said Tek Bahadur Dangi, director of Tourism Marketing and Promotion of Nepal Tourism Board (NTB).

According to the board, the hotel\restaurant workers' crisis, last December's strikes accompanied by some ugly incidents in the valley, and frequent Nepal bandhs organized by various political parties are the main reasons for the fall in tourist arrivals. Suspension of Indian Airlines flights to Nepal for the first five months of 2000 and the exaggerated and negative publicity about Nepal in the Indian media after the IA hijacking sent wrong signals to the Indian market, said the NTB report.

"The activities going on here for last year or so -- be it security or law and order problems -- are going to affect us in the long term," said Pradeep Raj Pandey, chief executive officer of the NTB.

"The glaring example could be Fiji whose entire economy was dependent on tourism. When problems started there last year, the entire tourism business came to a halt."

One can see visible impacts of the declining tourist arrivals at Pokhara and other destinations, including Bhaktapur.

"As the number of tourists declines, so does the number of domestic air travellers," said Birendra Basnet, managing director of Buddha Air, one of the leading private-sector airlines. "The number of air travellers to Pokhara has declined."

Backed by major political parties, the hotel unions seems to be in no mood to withdraw their demand of a 10 percent service charge inspite of the damage done by their strike threat. "We have put forth very basic demands to the hoteliers," said Achut Raj Pandey, president of Nepal Tourism and Hotel Workers Union. "We will go on strike if they are not met."

The industry, which has seen its worst period in recent years, is on the brink of total collapse and could touch off a chain reaction in the entire economy.

"Nepal's tourism sector has already suffered from different kinds of protests, including Nepal bandhs, and vandalism," said Narendra Bajracharya, president of Hotel Association Nepal. "Tourism is a very sensitive sector and cannot be promoted in the midst of so much instability. "We have already submitted our report on the service-charge demand and we are waiting to see the final report."

As the tourism industry stands at the crossroads, all concerned parties need to take some steps. It remains to be seen who will take the first step.