Is this an opportunity to re-boot Nepal's tourism?

Nepal's tourism sector was allowed to grow organically during the last sixty or so years. The private sector-led growth has been left largely to market dynamics both on the supply and demand sides, leading ultimately to a long-running over-supply situation with negative price pressure. So much so, that some arrival segments were producing zero profits with operators having to leech commissions off shop-keepers to stay viable.   

While tourism was taking off as a world-wide phenomenon everything was about opening up and creating access. The people coming to Nepal were still few and far between and Nepal's policies of private sector-driven tourism with visa-on-arrival to all and sundry were hailed as enviable. Then, when mushroom-like growth on the supply side led to increasing pressures on price and decreasing delivery of services, cries of despair went up. "This has to stop". "There are too many suppliers, not enough tourists". "This sort of competition is unhealthy", and so on. 

Suddenly, destinations like Bhutan opened up applying a "high value", "limited tourism" policy and Nepal's policies began to look dated and like exercises in futility. Comparisons were swiftly drawn and were often harsh on Nepal. But, the bed had been made, and lying on it was the only option. Too much investment had already been made by the private sector to make it feasible to try limit tourist numbers and except for a brief period in the eighties when the Government of Nepal decreed that each tourist should spend, at least, 20 United States Dollars a day there had been no efforts at maximizing tourist spend except to address inflation, price rises and through some value additions by the private sector.

Everything suddenly came to a head in a few days in March of 2020 when the Government of Nepal, echoing other governments, elsewhere, decided to shut down the sole international airport and the tourist arrivals suddenly dried up, as if a spigot had been turned off. 

As the COVID19 pandemic surged through the world's economies and the unprecedented lockdowns went from days to weeks and then a month and two months and into a third month, as I write this, the realization has sunk in that this is a crisis of unprecedented scale and the tourism industry has been brought to its knees by the SARSCoV2 virus. It has brought tourism to a grinding halt. To zero. There is no longer any competition and all comparisons are off!

There is a misconception that the Chinese word for crisis (wēijī) consists of two characters which, separately mean "danger" and "opportunity". While I am no Sinetic scholar, a little bit of digging around Wikipedia produced that while the character for "wēi" does conjure up "danger", the character for "jī" actually means "incipient moment; crucial point (when something begins or changes)". So, with the slate being wiped clean by the ongoing pandemic, have we arrived at the incipient moment in Nepal's tourism journey when things can be made to change? Could we mark this as a crucial point to re-model Nepal's tourism? And, what might that model look like?

I have always maintained that the Bhutanese model, seemed a tad unfair on the tourist. While infrastructure has steadily improved in Bhutan, the payment of two hundred-odd dollars per day, of which the government takes close to 70 dollars off the top, leaves a lot to be desired especially, when you travel around the country living in accommodation that is mostly less than basic outside of Thimpu and Paro. Ergo, there are no long lines of repeat visitors waiting to go back in. 

So, if the Nepali model was due for an overhaul and the current Bhutanese model seems a bit customer un-friendly (to be fair Bhutanese officials have hinted at changes), what sort of model might fit a 21st-century product offering from Nepal. 

Given our comparative and competitive advantages, which I am not going to list here, Nepal has the potential to attract high-end tourists and has been doing so for long. Only, with the emphasis on price competition from tourism product suppliers, even rich tourists are paying low prices for our products. And again, much investment has been made in the low-end price spectrum in lodges and hotels in Kathmandu, Pokhara, Chitwan, and Lumbini and in the Everest, Annapurna, and Langtang regions to suddenly stop back-packers and let in only those rolling in money and willing to part with it to see a slice of heaven. 

I suggest a hybrid system of high-value tourism packed with value for the customer, which is what the 21st-century market place craves, and a continuation of the status-quo ante COVID19 to not let the investment go to waste. 

Here is how it might work. Four and Five-star hotels (maybe even three-star hotels) would be allowed to deal only in the high-value tourist market as would tour operators, trek operators, rafting operators, etc., who would opt-in to the program. The Government would set a price for tourists (say three hundred dollars per day for those buying five-star packages and two-hundred-fifty dollars for those buying four-star packages and maybe a third tier for those buying three-star packages, for the sake of argument), and take say, a hundred dollars off the top, much like the Bhutanese model but, that is where the similarity would have to end. 

The hundred dollars "taken" by the government would include visa, entrance fees to heritage sites, trip cancellation insurance, a bond covering refunds if the promised services were not delivered, helicopter evacuation insurance, hospitalization and treatment, evacuation by air ambulance to the nearest world-class facility in Delhi, Bangkok or Singapore for those that may need it, VAT, carbon offset for their trip, etc. All things of value to the well-heeled, 21st century, post COVID19 traveler.

Their in-country services would be delivered by a first-rate tour operator/ trek operator/ rafting operator, etc., using highly trained guides, industry-leading conveyances, rafts, tents as the case may be. The three, four, and five-star hotels would have to meet global industry-leading criteria on infrastructure and facilities and they would be guaranteed a fixed price per head from the government set price as would tour, trekking, and rafting operators. The government would decree and allow the import of electric vehicles for use by these tourists in cities and wherever else feasible, all treks would use tented accommodation to avoid competing with locals for resources (new trails, campgrounds, etc.  would have to be designed and built in the Annapurna, Everest and, Langtang regions). Staffers working to fulfill services in this segment would get government prescribed salaries, etc. No new lodges would be permitted on trekking trails that don't already have lodges, new hotel development would be tied to carrying capacity, etc.

Simultaneously, second-tier tourism would be allowed to flourish alongside, using the existing infrastructure of today's existing tourist districts around the country and including the Everest, Annapurna and Langtang regions along the lines that things have been carrying on till now but, with some safeguards built-in to protect the tourist and the suppliers. 

On the marketing front, the Nepal Tourism Board would promote only the high-value products while the back-packer segment would be allowed to grow organically. Targets would be set in dollars to be earned and not in the number of tourists to be admitted. 

Needless to say but, our National Carrier would have to be strengthened to be not the 'best in the world' but, best on the routes on which it operates.

The nitty-gritty obviously, needs to be worked out to the satisfaction of the industry stakeholders and the government but, the argument here is that this pandemic has offered up a once-in-a-lifetime chance to make structural changes to the market-place and it is up to us to grab it with both hands. Once the opportunity passes we will all go back to our insanely cut-throat competitive practices which we will hone to a certain extra degree, even as we chase after the first returning low-return tourist. 

Again, there are no guarantees that this will work but, there are no indicators this won't work either. Or, maybe, there is a better idea out there that has not yet been heard. However, what is true is that we do seem to have arrived at our "jī" or crucial moment and it would do well to realize that, debate our circumstances, arrive at a decision, and take that leap of faith.