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Tourism industry lures foreign investors

Nepal’s tourism industry is the top attraction among potential investors which accounted for more than half of the total foreign direct investment (FDI) commitments made in the first four months of fiscal 2018-19.

Overall FDI pledges have dropped, but commitments in the tourism industry have risen sharply with a booming hotel and casino industry pulling in financiers.

Figures issued by the Department of Industry show that FDI commitments in Nepal’s tourism industry jumped more than three and a half times to Rs3.28 billion in the first four months of the fiscal year which began mid-July compared to the same period last year.

At the same time, overall FDI pledges fell 28 percent to Rs6.48 billion in the first four months of 2018-19, according to Department of Industry data. Travel traders said that a majority of the investment pledges may have been made in the tourism industry with casinos topping the list.

“The investment pledges are obviously a good sign for the tourism industry at a time when the government has announced the Visit Nepal 2020 campaign with the aim of attracting 2 million visitors,” said travel trade entrepreneur Yogendra Sakya. “But the government should also implement its tall promise to ensure adequate infrastructure so that foreign investments are not ruined.”

Sakya added that the private sector was ready with enough accommodation, but airports, roads and other infrastructure are still in a poor state. “The government has a big challenge to fulfill its promise.”

Currently, investor eyes are on the development of Nepal’s second international airport in Bhairahawa. Although, the government had announced that the new facility would be ready before the Visit Nepal 2020 campaign kicks off, travel traders are skeptical about the claim.

Some Civil Aviation Authority of Nepal (CAAN) officials said that the second package of the airport project, which includes communications, navigation and surveillance (ANS) and air traffic management (ATM) systems, would take at least a year to complete but it has not been formally started. “Besides, the government has not started any marketing campaign to promote the airport.”

Many entrepreneurs said that the increased FDI commitments were a result of the booming casino industry.

Most of the casinos in Nepal are operated by foreign companies. Five-star luxury hotel Marriott Kathmandu is set to throw open its doors in the first week of January. The hotel has signed a memorandum of understanding with Delta subsidiary Deltin Group to operate a casino. This marks Delta Corp’s first expansion outside its native India. Delta operates four casinos (three floating, one land-based) in Goa state and another in Sikkim state.

The Silver Heritage Group has completed a land deal for its second five-star resort and casino project in Dhulabari, Jhapa. After the land deal worth $3.2 million, it has been rapidly developing the property which will be named Tiger Palace 2. It invested $51.5 million in its first project which started gaming operations last December.

Thailand-based global hospitality company Dusit International has announced developing the Dusit Thani Himalayan Resort & Spa, the first Dusit-branded property in Nepal, in Namo Buddha, Kavre. The property is slated to open in 2020. Luxury group Pavilions Hotels & Resorts has made a debut with its tented eco-villas in Pokhara. This is Pavilions Hotels’ second property in Nepal after The Pavilions Himalayas, which opened in 2015.

According to the department’s statistics, India stood first in terms of FDI pledges followed by Singapore and China. India’s FDI commitments in the first four months totalled Rs2.46 billion, followed by Singapore with Rs1.48 billion and China with Rs1.37 billion.



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