Kathmandu, May 18
Nepal Tourism Board (NTB) has recommended the government to provide financial support to the tourism industry for at least three years so that tourism businesses can sustain.
A study conducted recently by NTB has revealed that the government has to support tourism businesses with financial packages as stakeholders are worried about the loans they need to pay back. As per the study, investment worth around Rs 115.38 billion is lying idle in the tourism industry at the moment with outstanding loans worth Rs 54.73 billion as of mid-March due to the coronavirus pandemic.
The major demand of the private sector from the government is interest subsidy and among all sectors the hotel industry has been very vocal about it. Currently, there are 129 star-rated hotels, 1,125 tourist standard hotels, 3,508 travel agencies, 2,649 trekking agencies, 77 tourist transportation service companies, 73 rafting agencies and 324 home stay services across the country.
The study has divided the financial support in two categories — fixed cost control and cash refinancing. Towards fixed cost control, the government has to work on bank interest, retention of human resources and rent subsidy for tourism entrepreneurs while towards cash refinancing the government has to look after bank loans at low interest with the help of Nepal Rastra Bank (NRB).
“Although NRB has asked banks to reduce credit rate by two percentage points, the tourism sector requires more than just that. The central bank also needs to play a role in extending loan repayment period for three years,” the report states.
The study has projected that if the government can implement the aforementioned suggestions, then in the next three years the government will be able to recover 100 per cent revenue that it stands to lose out during the recovery phase from the industry. In fiscal year 2018-19 the government had earned Rs 73.57 billion via foreign exchange.
Issuing a statement on Sunday, the tourism board had recommended the government to establish a job retention fund worth Rs 20 billion to address the issues of tourism workers. As per NTB, around 300,000 workers are currently directly employed in the sector.
It also said that the other sectors have more number of permanent staffers than the trekking and climbing sector. The trekking and climbing sector has 807 permanent workers and 2,166 temporary employees. Meanwhile, the Trekking Agencies’ Association of Nepal has claimed that there are around 700,000 workers working directly and indirectly in the trekking sector and most of them are self-employed.
The NTB survey has also mentioned that most of the firms have sent their workers on leave for cost management. Around 42 per cent employers have resorted to unpaid leave facility as immediate and short-term cost management plan, while 37 per cent have resorted to full or partial salary/benefit reduction. Likewise, 19 per cent firms have terminated the employment of their staff for cost management.
The board has concluded that domestic tourism promotion is the only way for quick recovery of the industry. It had also sent a recommendation to the Ministry of Culture, Tourism and Civil Aviation to implement tourism leave travel for civil servants to promote domestic tourism.
A version of this article appears in e-paper on May 19, 2020, of The Himalayan Times.
Written by Sureis
This news first appeared on https://thehimalayantimes.com/business/give-financial-support-to-tourism-sector-nepal-tourism-board/ under the title “Give financial support to tourism sector: NTB”. Bolchha Nepal is not responsible or affiliated towards the opinion expressed in this news article.