National 5 (Spotlight Weekly)

Shooting In Their Legs?

The threat of hoteliers to close down all the hotels could harm their own interest sending negative message to the global market

By A CORRESPONDENT

A big hotel : Testing times

It took nearly four years to publicize that Nepal’s hotel industries are reliable but the recent threat by the Hotel Association of Nepal (HAN) to close down the hotel industry could undo the whole thing by sending yet another wrong message to the global tourism market.

In its recent general meeting, the HAN executive committee has decided to extend another two years term for loan repayment demanding that the commercial banks stop putting pressure on them to return the debt.

Led by big and multi-star hotels – which owe huge loans to commercial banks - the HAN’s leadership has ignored the consequences of such warning. They could lose moral standing when they have to defend their cause when trade unions and political parties issue similar threats for the general strike.

“Banking disputes can be settled through the internal negotiations but by issuing such a call, HAN - an organization dedicated to protect the interest of hotel entrepreneurs – has shown that it is no more than a trade union,” said a hotel entrepreneur on condition of anonymity. “The present problem is not that of declining arrival of tourists or the debts but the falling rate of hotel bed.”

Despite intensification of Maoist insurgency, the number of tourist arrival has drastically increased in the last one year. The average growth rate was nearly 50 percent. Had the situation stabilized, Nepal’s tourism sector would have fully recovered.

In the meeting, the hoteliers have put several demands including a four-year moratorium on the payment of interests and principles; and another 6 to 10 years period after the expiry of the moratorium for the payment of principal.

“We don’t have any other options than to go on strike in case the government does not fulfill our demands,” said Narendra Bajracharya, president of Hotel Association Nepal.

The hotel industries are in a financially difficult position but the way hoteliers have put up their demands will only generate public anger against them. “Since the hoteliers have taken the money of small depositors, how can they say that they will not pay back interest? The demands of hoteliers will erode their credibility and prestige in society,” said a hotel entrepreneur. “Our financial status is not good but the HAN is taking the side of a few star hotel defaulters.”

“When government remained apathetic towards our demands, we were compelled to take harsh decision,” said Shyam Bahadur Pandey of the Shangri-La Group.

Following the announcement of the decision to go for indefinite strike, smaller non-star hotels have expressed anger over the negative publicity in the international market. “HAN is representing the opinion of a handful of four and five star hoteliers and they have not shown any interest to the country’s entire hotel industry,” said a non-star hotelier of Thamel.

Following the 9/11 terrorist attacks in New York and Washington and intensification of Maoist insurgency back home, Nepal’s tourism sector has faced tremendous economic difficulties. At a time when the tourism arrival has shown a gradual sign of recovery, the hoteliers need to grasp the opportunity.

If business organizations like HAN follows the course of strikes and threats, they will lose their right to defend the cause next time when they have to sit together with trade union workers.

The pressures and threats tactics can damage the interest of hotel business in Nepal and HAN’s recent threatening to close down the hotels will only hamper their own interest.