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Figure 38. Extent that decline in tourist spending / tourist volume hinders growth of businesses in the Tourism Sector
from Unlocking Opportunities for the Private Sector in Nepal Promoting greener and more inclusive growth
6.5 Tourism: barriers to growth
6.5.1 Decline in tourist spending/number of tourists
Majority of the respondents in the tourism sector rated decline in tourist spending/number of tourists to their areas as a moderate problem.
The decline in tourists was experienced during the lockdown. Prior to the COVID-19 lockdowns, the greater challenge faced by tourism enterprises was getting higher spending tourists. At that time then, many of the tourist areas experienced significant increase in visitors but this did not necessarily translate to increased income for tourism businesses.
Tourists who visit Lumbini, for example, usually stayed less than an hour to visit the birthplace of Buddha and do not really spend so much. It is also said that tour operators in Nepal do not really earn much from the Buddhist pilgrimage since most of the tour packages are handled by Indian operators (S. Prasain 2019). Lumbini also suffers from a lack of tourism products that can encourage tourists to spend more. It also suffers from a seasonal pattern of tourists.
Figure 38. Extent that decline in tourist spending / tourist volume hinders growth of businesses in the Tourism Sector
Among the seven provinces, Karnali is the least developed in terms of tourism infrastructures, governance, policies, and marketing campaigns (MoITFE 2020). It has also the lowest number of tourists. Tourism is focused mainly on Rara Lake in Mugu and Shey Phoksundo Lake in Dolpa. The province focuses on home stay facilities for tourists but it seems that indigenous communities have very little participation (Mahat 2019). Humla receives the largest number of visitors consisting primarily of Indian pilgrims who use Simikot as a transit point to visit Mt Kailash. They usually spend little time in the district capital.
The major barriers to the growth of the tourism businesses include dependence on volume due to lack of high value tourism products, limited tourism infrastructure, limited internet connectivity including digital payments, inadequate marketing campaigns, lack of coordinated policy action, insufficient business development services, challenges in accessing finance and reliance on informal sources of finance.
