NEPAL

Hotel boom leads to new casino plans in Nepal

Nepal is expecting further expansion of its casino industry as five-star hotels spring up across the country ahead of a major tourism initiative next year.

The Himalayan nation launches Visit Nepal 2020 in January, with a target to attract two million tourists. The hospitality sector is already enjoying strong growth, rebounding after a major earthquake in 2015, to attract a record 1.7 million tourists in 2018.

The Kathmandu Marriott Hotel opened in the capital city on July 19, bringing the number of five-star hotels in Nepal to 14. Full casinos are only permitted in five-star properties, while mini-casinos which only offer electronic gaming are allowed in four-star hotels.

“All five-star hotels are expected ask for casinos. But they will

have to meet our criteria. We’ll allow them to open if they meet it,” said Narayan Prasad Bhattarai, an officer who heads the casino and hotel section of the Department of Tourism.

Hotel Central Plaza, located in the southwestern city of Nepalgunj, was given a five-star rating by the Department of Tourism in March. While in the same city, which serves as a gateway for Indian pilgrims travelling to Kailash Mansarovar in China’s Tibetan region, Soaltee Westend Premier was awarded a five-star rating earlier this year.

The rise in five-star hotels outside Kathmandu was prompted by a government policy to encourage tourism across the nation. In Pokhara, the country’s second-largest city, a Swiss hotel chain launched Swiss International Sarovar in June.

Local company, Imperial Nepal, has applied to operate a casino in the Soaltee Westend Premier in Nepalgunj, near Nepal’s border with India.

Nepal is set to have eight operating casinos after the launch of the Deltin Royale Kathmandu in mid-August.

If permitted, this will be second casino after Tiger Palace Resort outside the capital.

Nepal is set to have eight operating casinos after the launch of the Deltin Royale Kathmandu in mid-August. The casino is the first in Nepal for India’s Delta Corp, that country’s largest operator.

Others include Casino Pride at the Hotel Hyatt Regency, Casino Bally’s Nepal at Hotel Malla, Casino Palace at Hotel Del’ Annapurna, Millionaire’s Club and Casino at Shangri-La Hotel, Tiger Palace Resort in Bhairahawa, Casino Mahjong at Hotel Soaltee, Casino Royale at Yak and Yeti Hotel and Casino Rad at Hotel Radisson. These lasttwo operate on the basis of an interim order from the Supreme Court.

In addition, the Department of Tourism expects a Chinese business group to invest in a casino at the five-star Aloft Kathmandu Hotel, which recently began operations in Chhaya Devi Centre, the country’s largest shopping complex. Mechi Crown, a five-star hotel under construction in eastern Nepal, will also reportedly house a casino, while rebuilding at the earthquakedamaged five-star Everest Hotel, which earlier housed Casino Everest in Kathmandu, is nearing completion.

Much of the optimism about the potential for Nepal’s casino sector stems from its proximity to India, where casinos are banned, apart from in the states of Goa and Sikkim. The country’s rapidly expanding middle class, coupled with a strong propensity to gamble, is expected to fuel outbound travel to neighbouring casino resorts.

Tourism officials said the arrival of the Deltin Casino signaled that foreign investors were keen to invest in Nepal, while operators say there is enough Indian and Chinese demand to support the growth as long as the market remains well regulated.

“Their entry in Nepal will encourage more players from India,” Surendra Thapa, the spokesman for the Department of Tourism, told AGB. “It also shows that casinos (are) one of the attractive options for foreign direct investment.”

Nischal Chapagain, an operations manager for Bally’s Nepal Casino, said that for the vast majority of Indians, both Goa and Sikkim are too far away. “So Kathmandu is best placed to attract them,” he said.

However, he cautioned that the April collapse of low-cost carrier Jet Airways may slow growth. The Mumbai-based airline was offering fares up to three times cheaper than its rivals.

Nepal has also seen a significant uptick in investment from China, which is also expected to help fuel growth in the gambling sector.

At an investment summit in March, Chinese investors made up 250 out of the 620 attendees, while at the prior year’s summit, nearly two thirds of the pledged investment was from China.

In 2018, 153,602 Chinese visited Nepal, an increase of 48 percent compared to 2017. Their number is expected to grow next year. “Most Chinese gamblers are tired of Macao. So, they want to try Nepal. We see a lot of potential in that category,” Chapagain said.

Silver Heritage gets offer for Nepal ops.

Silver Heritage said it had received an offer with an enterprise value of $33.9 million to buy its Nepal operations from a local business man.

Indra Bahadur Thapa, represented by I. Hugh Holmes, of Hotel Investment Partners, will buy the Silver Heritage unit that holds the Nepalese assets for $20 million.

The assets include the Tiger Palace Resort and The Millionaires’ Club and Casino. The enterprise value includes a loan of $13.9 million entered into by the Nepal unit, Tiger One, with a consortium of local banks.

The buyer will assume that loan. Silver Heritage said it has conducted a careful analysis of the offer, including the absence of a superior bid and uncertainty as to whether it can continue as a going concern, before deciding to grant exclusivity to the buyer.

Government relaxes border restrictions

The Nepalese government has relaxed the minimum distance requirement for setting up casinos near international borders to 3km from 5km previously.

“The government has shown flexibility by allowing casinos to operate at a distance of up to 3 km from international borders in the context of the upcoming Visit Nepal Year 2020 campaign,” said Ghanshyam Upadhyaya, spokesperson for the ministry.

A number of operators in Kakarbhitta, Biratnagar, Birgunj, Nepalgunj, and Dhangadhi had raised concerns over the restrictions, he said.