Wither, Nepal's Tourism

Whither, Nepal’s Tourism?

Much has been written about the country’s tourism sector but, mostly from the academic or developmental point of view. Many Master Plans have been put forward. Once again, they have been formulated keeping in mind the lofty ideals of delivering development, easing poverty, creating jobs, etc. Often, I have been a willing and sometimes unwilling, party to these shenanigans where the only result has been the generation of reports and plans that nobody ever refers to again!

What is stopping this sector from re-positioning itself as the driving force of the Nepali economy, in the short and medium term, earning money for the country that will enable investments in sectors with longer gestation periods and with Returns on Investment sometime in the distant future?  An engine that can haul the Nepali economy, if you will. Cleanly, with minimal environmental impact, allowing us to move from an agrarian economy to a services economy and bypassing the whole, potentially polluting, manufacturing economy bit.

To arrive at what we need to do we must, first, take a deep look at what has been done in the past. Tourism in Nepal started in the mid-fifties as an afterthought to the summitting of Mt. Everest, King Tribhuvan’s exposure to Boris Lissaneyvich, the white Russian bon-vivant and subsequently the coronation of King Mahendra. It was something that could be controlled, mainly constrained to Kathmandu valley and doing little good or harm, for that matter. Useful, however, to project the image of Shangri La. Home to a unique way of life ruled by a charming King who needed very much to expose his country as an independent entity. This was accomplished in no small measure.

The tourists began arriving at the invitation of the likes of Boris initially. Then came the those who would walk the hills and climb the mountains brought hither by Col. James Owen Marion “Jimmy” Roberts. The visitor numbers were small, just like the rulers of the day wanted and the people, at large, had no expectations from the tourists, who were as alien to them as people from another planet. The first souvenir shops were yet to open. As were the hash joints. Those would come later but, sooner than the rulers of the day would have liked. Because along came an unpopular war in south east Asia and the commercial jet age. People could fly further, faster, cheaper. Also, the land route from Europe to India, in those heady days, did not traverse several war zones. And once you got to India the stories coming out of Shangri La were irresistible to some; friendly locals, a government that left tourists alone and the best “ganja” and hashish for the asking. For those wanting to avoid going to Vietnam, the jets could get you to Europe, far enough, fast enough- relatively cheaply and from there it was a simple hop, step and jump to Shangri La where one could hide away in a hash induced haze.

Although McDonnel Douglas’s DC 10 and Boeing’s Jumbo Jet, the 747, would wait decades before making their Kathmandu debut, the jump in arrival numbers are owed to these two behemoths of the skies. They didn’t just get people further, faster and cheaper, they simply got more people involved in travelling. That is the instance when the lack of a plan should have become glaringly obvious. But, it didn’t. And the boat had sailed, or rather, the plane had departed, as it were.

Once the local population figured out that money could be made off tourism they got involved. In a very committed way. My father was one such person and he developed a love for tourism that hasn’t ebbed to this day almost fifty years on. But, I digress. Two distinct types of tourism began taking shape. Hotels were being built. In the organized sector purpose built hotels, the Annapurna and the Soaltee were complementing and would replace The Hotel Royal run by Boris in Bahadur Bhavan, the present-day Election Commission of Nepal and the Office of the Vice President of Nepal. In the less organized sector Jhonche was taking off as the center of the Hippie Universe, lovingly referred to as “Freak Street”. Homes were converted into lodges and locals were learning to cook western cuisines, the epitome of which would become the chocolate hash cake, available commercially nowhere else on God’s good green earth but, in Kathmandu! Kathmandu had reared its hedonist head and the world was noticing. Believers of Flower Power and those unwilling to head to the jungles of south east Asia turned the area south of the Kathmandu Durbar Square into a Refugee Camp for westerners! The misfits and the misanthropes were welcome along with the tour groups that were starting to discover areas further afield from Kathmandu. The phenomenon known as Thamel would come later.

Then in 1978, the then His Majesty’s Government had a wakeful moment decided that a Master Plan was in order and the Pacific Asia Tourism Association (PATA) was asked to help with this exciting new task. The Master Plan was delivered in short order and filed away just as quickly, to gather dust for all eternity. Subsequently, other plans followed including one just for Pokhara of which a special mention must be made. On reading the plans, the one for Pokhara makes your hair crawl with the possibilities of what might have been. We will revisit this plan later.

Each of the Plans made for developing Nepal’s tourism potential had been made in good faith. This I do not doubt. However, each plan is quick to point out ways to exploit Nepal’s competitive advantages like the mighty Himalaya, the abundant flora and fauna and the man-made Heritage and drive number of arriving tourists. None of the plans talks about the need to exploit and maintain the lead in Nepal’s comparative advantages. Not one plan talks about the comparative disadvantages and how those need to be addressed to turn them into advantages. Except the Plan for Pokhara, and that is worth re-visiting here. The plan called for developing the lake side onto an exclusive resort area with top end hotels along the Hawaiian theme with golf courses along the lake, water based activities, preserving Ram Krishna Tole and turning that into a shopping area without compromising Pokhara’s pre-eminence as the gateway to the Annapurna region. By this time Thamel was already burgeoning into what would ultimately become the densest tourist district in the world and Pokhara’s pristine lakeside was in danger of following suit. Once again, the plan was shelved. And the rest is history.

We now need to fast-forward into the nineties by which time several more Master Plans had come and been subsequently consigned to some shelf. The UNDP in its quest to promote “quality tourism” set up the Partnership for Quality Tourism Project which, among the other things it did, identified the need to set up an independent Nepal Tourism Board along the lines of the then Singapore Tourism Board. This was the magic bullet that would cure the ills plaguing Nepal’s Tourism. It would be a Public Private Partnership where the private sector would have a majority say. That the private sector was excited by the prospect of being able to control the NTB would be an understatement. Our destiny was going to be in our own hands. The only problem was no one had an idea as to what the destiny was to be. So, we continued running like a chicken with its head cut-off. Great speed was involved but, there was no clear destination and there would be tragedy in the end.

The tragedy would be a long-drawn episode of Bollywood proportions with the very Private Sector it was designed to foster, helping the feeding frenzy. It would culminate in a stand-off between a serving CEO appointed by the private sector and the very people who appointed him. The CIAA would become involved. Allegations of corruption would taint the highest offices in the Ministry of Tourism, a distinguished Civil Servant would miss his next appointment, the CEO and Senior Directors would be charge sheeted. Some, very obviously, in error and for no other reason than that they were doing their jobs and the NTB would become hobbled. A toothless tiger, in a highly competitive world. But again, I digress. Let us instead move on to the comparative advantages we should have maintained and the ones we could have developed in a changing world.

By the mid-eighties, the major tourism products of Nepal had been developed. Kathmandu was already becoming a cosmopolitan city and gateway to the Himalayan region with Tibet and then Bhutan opening to tourists via Kathmandu. Pokhara and Chitwan were also well on their way to becoming what they have now become. Lumbini already had the Kenzo Tange Master Plan, Sagarmatha National Park and the Annapurna Conservation Area were set up in 1975 and 1985 respectively and we were on our way. Kathmandu Valley’s Durbar Squares, Pokhara’s pristine beauty, Chitwan’s tigers and rhinos, Lumbini’s hallowed garden and the two greatest treks on earth were our products and no one else could come close to matching these. Perhaps they still can’t. But, while we were enjoying our windfall the world was changing around us and we were too busy to notice. In the neighborhood, India and China were opening their economies and starting to actively pursue tourists as well as allowing tourists of their own to travel widely. Tibet and Bhutan was starting to open to more tourists via points further afield. Beyond the neighborhood the world was already a vastly different place. Everybody was investing in tourism infrastructure. New airports were being planned and built, automotive industries were being built, hotels and casinos were coming up that would rival the best in the world, airlines were being set up that would challenge the world order. Adventure destinations were set up to cash in on the fastest growing segment in tourism. These activities and more were happening but, they were not happening here in Nepal.

Kathmandu’s award-winning airport, yes! It was awarded for design by the Pacific Asia Travel Association when it was opened, now ranks regularly among the worst airports in the world. The then swanky second-hand Mercedes buses and early Toyotas of the late seventies would be forced to carry tourists well into the twenty first century even as the rest of the world recognized the need for and invested in new fleets. Even the dowdy Ambassadors from the south of the border would be replaced by the latest Toyota cars and Volvo buses built in India itself. All the major brands would come to India and offer a shopping experience to rival Bangkok and Singapore relegating the shopping experiences of eighties-era Kathmandu to a historical footnote, hotels in the region would witness a mushroom growth. Seven star properties would spring up all around us while we would fail to keep pace. Casinos would sprout in Macau and Singapore and entice our customers with better offerings, so much so, that there would be no more Casino Nepal! That venerable south Asian institution, where the early gamblers cut their teeth.   While we would not only fail to buy and add a single plane to our national carriers’ fleet in twenty-eight years, almost consigning a once respected regional carrier to the dust bin of history, Jet Airways would be born and prosper, Kingfisher would come and go and Qatar Airways and Etihad would come from the blind side and become major players not just globally but in our own air space. In three decades, we managed to lose every single comparative advantage we ever held in tourism. Then again, come to think of it, the end of the last century and the beginning of this one were characterized by a general downward slide for all of Nepal, barring the education and health sectors.

Obviously, it is easier to identify mistakes than to offer up remedies. Remedies require a commitment, a call to action, time lines, resources, etc.,

The first order of business will be to convene a self-destructing think-tank. This think-tank would identify, based on proper research, the advantages we would need to develop and hold an edge in, to attain certain goals. Goals such as how much revenue are we looking to generate from tourism? How many tourists do we want to travel to Nepal? Then we would need to figure out how to attain these goals. What markets do we tap? What competitive advantages do we need to build on to further improve our customers experience? What makes the tourist enjoy a happy customer experience? A good airport? Nice transportation? Good hotels and quality entertainment? A classy airline to travel in which could be the nation’s pride? What experiences do we need to set up so that people from all over the world bring and willingly hand over their money to us? These things can be done in three months of the think-tank being set and then it would self-destruct. Once the think-tank has done its job then the product development, branding and marketing people at a revitalized Nepal Tourism Board would have to move in and build their plans to attain those goals. These plans would need Government of Nepal ownership and access to funding-the NTB, while morally depleted, still has funding. A constant audit of the branding, marketing and product development programs need to be put in place built around customer feedback and further research and NOT on the whims of novice ministers and their party workers. This audit program will provide the tweaks needed to the product range which, once fixed, can be fitted with the correct branding tools and put out to market.

Fortunately, our competitive advantages have not been decimated, even after the Maoist conflict and our comparative advantages can be built back up given the right amount stakeholder attention so, it is possible and, indeed, desirable to position tourism to be the engine that can drive economic growth for Nepal in the short, medium and long terms. Worldwide, tourism is a 1.5 trillion-dollar economic phenomenon which constitutes 10% of world GDP, generates 1 in 11 jobs globally – in Nepal it is more like 1 in 5 jobs, constitutes 7% of world exports and 30% of services exports and is expected to continue to grow and even surpass its present growth trends till 2030, according to UNWTO. What does this mean for Nepal? Of the impressive growth that is forecast, Asia Pacific is expected to post the most significant growth and adventure tourism a significant portion of that. Because of the small base of less than half a billion dollars in revenue (USD 420 million in 2017 according to NRB) we can aim for double digit growth in revenues for at least another 20 years! In the first ten years of revenue growth capped at 10% it will put us over a billion dollars. In twenty years, it will put us close 3.5 billion dollars! And that is a tidy sum even in 2037 dollars and rupees! Time to get to work, I think!