Cheaper tourists means your natural resources are getting exploited

APR 28 – Upaul Majumdar is the chief executive officer of the Hotel Annapurna. The Kathmandu Post caught up with him to talk about the country’s hospitality sector and the Annapurna’s performance. Excerpts:

 

How has the past two years been for you as the CEO of the Annapurna?

It’s been quite a challenging and good journey. In the past two years, we have felt a lot of differences in the internal and external environments. The country had an election, and a new government is now in place. Looking internally, we have had a lot of changes in the hotel also. We have done renovation to all our rooms along with upgradation of our services. This has helped the hotel to post higher revenue also. To sum up, it has been a nice eventful two years for me in Nepal.

Tourism is one of major foreign exchange earners for Nepal. How do you see the hospitality industry here?

I feel that the hospitality industry in Nepal is still undersold and that it needs to get higher revenues. The industry should move forward in terms of services, and the products need to be improved a lot. Nepal is a wonderful country in terms of the ecological system. I don’t know how many countries can boast of such a large variety and diversity.

Besides this, there are still a lot of virgin places in Nepal which are not being touched. This is something which is a big plus point. In the past six months, the government has opened 40 new peaks for climbing which doesn’t happen in so many places in the world. So I feel there is a big scope for Nepal to move ahead in the tourism sector. But the country is let down by the infrastructure gap. If you want tourists to come, you should be able to handle them better. The government needs to work more as a facilitator, not as a regulator.

Despite such potential, Nepal is often seen as a “cheap destination”.

Yes, Nepal is the cheaper destination today. The average spending of tourists in Nepal is just US$ 32 per day which is a very small figure. While in Bhutan, which has largely similar features like Nepal, the average spending of tourists is around US$ 200 per day. So Nepal needs to improve a lot. Otherwise, tourism can have negative growth. If you are getting cheaper tourists, your natural resources are getting exploited. And that is where tourism can also be harmful for the country.

Where should Nepal look for quality tourists to increase revenue? The two neighbours India and China or the traditional European and US markets?

Currently, Nepal is getting 35 percent of the tourists from India while China gives about 11-12 percent. If you take care of 47 percent of the tourists (from both India and China), then you have a lot of tourists in terms of numbers. But, a lot of high value tourists come from the US, Germany, France and Britain. Our findings have shown that a lot of high value tourists are older people. They are not coming to Nepal for trekking or adventure sports, they are coming here for soft adventure, to enjoy nature.

The other thing is that, traditionally, Indians and Chinese tourists are not interested in climbing and trekking. While a large part of tourism in Nepal has been geared towards the Himalaya, towards mountains and trekking, you don’t get the same kind of tourists from India and China. Yes, Nepal should increase promotion in India and China and try to get high-spending tourists from there as well. If we just focus on India and China, definitely we will be having a lot of tourists, but that would be a very short-sighted policy. We should be able to look far beyond.

Now, let’s talk about the Hotel Annapurna. How has this season been doing?  

It has picked up a lot. Traditionally, November is the peak tourist season; but due to the Constituent Assembly election, business wasn’t that great. Since February onwards, business has picked up a lot, and this month, most hotels seem to have a full house. As far as the Annapurna is concerned, our average room occupancy rate is around 80-85 percent while the average room rate is around US$ 95-95.

What is the outlook for the upcoming season?

The upcoming season is looking good. We took part in a lot of international exhibitions, and we work together with travel and tour operators. So we are definitely expecting an upsurge in business . Winter should be good this year for all the hotels.

The Annapurna has been working on an expansion plan. When will it start and when will it finish?

We’re planning to double the room capacity. Since the hotel has land available, we are also looking to have a standard convention centre which we don’t have now. We are not being able to get MICE business and exhibitions as we don’t have a convention centre.

The other part of our expansion is a plan to tie up with an international hotel chain. Currently, we are also in the process of finalizing what kind of models we should adopt for this. Issues like whom to tie up with and on what terms and conditions are being discussed. Once we complete this part, we will work on the hotel design because when you have a tie-up with a chain, one should also follow certain specifications.

After the expansion, the hotel will have a more contemporary look, but will still maintain quintessential Nepal. There won’t be a modern glass and steel building. It will represent Nepal and Nepali hospitality. Our plans are to start work by the end of 2014, and it will take around two-three years to come into shape.

Your hotel is also coming up with a resort in Chitwan? When will it be complete?

We have acquired a hotel in Jagatpur, Chitwan and it is being renovated currently. This property will have rooms and luxury safari tents. We are getting international standard safari tents from South Africa. There will be a soft opening of this property in October this year.

Will there be any new initiatives by the hotel in the immediate future?

We are also planning to upgrade our food and beverage outlets. One could see reformatting in some of our offerings very soon. Our plan is to extend the hours of our Coffee Shop. In most global hotels, coffee shops are open 24 hours. In Nepal, most of them are shut after 10 pm. So we want to keep it open till 1 pm at the first stage, and then eventually make it a 24-hour outlet.

The hotel is also working hard on the corporate social responsibility (CSR) initiatives side. We are working with Smile Nepal to feed street children from Thamel every day. All the lighting in the hotel is CFL, and external lighting is solar powered. We are the first hotel to buy electric cars so that we don’t pollute the environment. We are working with the Durbar Marg Development Board to maintain Durbar Marg.ekantipur

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