Analysis

Pandemic’s adverse impact on tourism sector

Deependra Khadka

Deependra Khadka

Tourism industry is one of the largest sources of foreign currency and a reliable income industry in Nepal. According to Nepal Tourism Board (NTB), Nepal’s tourism industry generated more than 240 billion rupees and created one million job opportunities in the last fiscal year.

Coronavirus (COVID-19) pandemic has badly affected a number of   development sectors including tourism and hospitability industry. Nepal’s tourism-based economy is in the struggling phase and there is a need for reformation during such a pandemic.

Some economists predict that the pandemic will contribute to the increase in high unemployment rate in upcoming days. The government of Nepal was hopeful until last December. After rapid spread of COVID-19 in the country, the government wisely postponed Visit Nepal 2020 campaign formally. Some experts in public health had been complaining about the government’s campaign to continue with VN 2020 while COVID-19 was raging across various countries.

Widespread fears of a possible outbreak have dealt a tough blow to the Nepali economy, which seemed to be on the cusp of a modest revival after the massive earthquake in 2015 and the subsequent Indian blockade. Nepal has been suffering economic problems due to the blockade, natural disasters like earthquake and currently COVID-19 pandemic.

Our country depends on the aid of several foreign donors and these donor countries have been battling the pandemic which has affected the national economy of these countries. There are many high risks in foreign investments and aid due to the global effect of this pandemic.

World Health Organization has confirmed that more than 12 million people around the world are infected with coronavirus and more than 64,000 people have lost their life. The virus has spread to 205 countries and territories around the world and in international conveyance (the Diamond Princess Cruise ship harbored in Yokohama, Japan).

Nepal is still under lockdown to stop the virus transmission. Nepali economy is facing serious threats due to the prolonged lockdown. This threat exists because Nepal’s prosperity is heavily dependent on its tourists. Travel and tourism sector is the hardest hit by the pandemic. Yuba Raj Khatiwada, Finance Minister of Nepal, spoke about the possible huge loss in nation’s GDP and per capita income in a recent press meet.

China is the second largest country that sends tourists to Nepal. According to Nepal Tourism Board data, 169,543 Chinese visited Nepal in 2019, while 30,534 tourists from Japan and 29,680 from South Korea reached Nepal. Likewise, Nepal received a total of 15,676 Italian tourists and 1,882 Iranian nationals last year, Immigration Department informs.

Therefore, the first headlines that caught everyone’s attention were of the cancellation of promotional events of Visit Nepal 2020. Government of Nepal was aspiring to attract double the number of tourists than last year through this campaign.

Even though the VN 2020 was an important event and its cancellation would now cost millions to Nepal, health of Nepali people is the foremost concern for the government. After realizing this, Nepal’s Ministry of Health and Population (MoHP) has taken various safety measures. Nepali nationals are advised to refrain from ‘non-essential travel’ to the countries affected by or in the high risk of COVID-19, including China, Italy, Spain, Germany, USA, South Korea, North Korea, Iran and Japan.

Tourists-nepal

Image credit: worldnomads.com

The government has decided to restrict the entry of citizens from highly infected countries including China, Japan, South Korea, Spain, Germany, Italy, and Iran. The government also took the decision for lockdown following China model on 20 March.

Tourism entrepreneurs were of the notion that promotional activities were inadequate to attain the tourist target. But COVID-19 has hammered the final nail in the coffin of VN 2020. There are chances of VN 2020 shifting to 2022.

Different sectors of Nepal’s tourism-based economy have started to show adverse impact. Hotel occupancy rates in tourist sites like Kathmandu, Pokhara, Lumbini and Chitwan have been slashed by 95 percent. The top ten countries from where Nepal gets tourists are on high alert. Most countries have issued travel advisories for people traveling to and from China. Thailand’s health minister discourages travel abroad, saying ‘it could be your last holiday.’ South Korea is in complete crisis mode due to the rapidly growing outbreak.

Cancelling the promotional events was one of the hardest measures taken by the government which is a correct step. But this is definitely going to impact the economy of Nepal.

Now Nepal needs to strengthen its health preparedness and devise a recovery plan. Since no one knows how long the disease will keep wreaking havoc, VN 2020 campaign budget should be invested in tourism infrastructure and internal promotion. Most importantly, the government of Nepal should take necessary measures to ensure that the economy rebounds.

Published on 5 April 2020

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