The insurgency and political chaos in the Himalayan Kingdom has severely affected the ‘backpacker tourism’ resulting in decreased ‘trickle-down’ effect hurting the lower strata of tourism-dependent people the most. While the data released from the Nepal Tourism Board (NTB) show a steady rise in the number of tourist arrivals, officials agree that they have witnessed a significant slump in the category of Free and Individual Travelers who make for over 50 percent of the total incoming tourists. More importantly, it is the individual travelers who inject the much-needed money into the local grass-root level and directly into the hands of people

By SANJAYA DHAKAL

Tourists in rickshaw : Bandh effect
The report of steady rise in tourist arrival despite the internal turmoil has come as a shot in the arm for tens of thousands of tourism entrepreneurs. However, the fact that there has been substantial decrease in the arrival of individual travelers – more popularly known as backpackers – could upset the country’s aim of using tourism as a tool for poverty alleviation.

The growing chaos in the rural hinterlands in the country has naturally frightened the solitary trekkers and individual travelers whereas the decrease in the arrival of city-bound, and organized travelers has not been that substantial.

“The arrival of what we call FIT (free and individual traveler, more popularly known as backpackers) has significantly dropped but the arrival of organized travelers, who come in groups and are linked to some packages, has not decreased,” said Subash Niraula, a senior director at the Nepal Tourism Board (NTB) – a board represented by both the government and the private sector.

In fact, the figure released by the NTB in early January showed that the tourist arrival had grown by 23 percent in the year 2003 compared to the year 2002. However, it was still lower by 36 percent compared to the year 1999 when record 421,243 visitors had visited Nepal.

After the 1999 record, the tourism went on a sharp downhill with a series of incidents including the hijacking of Indian airlines from Kathmandu in December 1999; the anti-India riots following unsubstantiated rumors attributing Indian star Hrithik Roshan of making derogatory remarks against Nepal; the bizarre palace massacre in June 2001; and the intensified Maoist insurgency coupled with frequent political turbulences ensured that the tourism never pick up.

Painful Decline

For a country like Nepal, which was heavily dependent on tourism for earning foreign exchange, the sharp fall was extremely painful. Nearly a million people are directly or indirectly employed by tourism-related sectors in the country. From mid-1990s when tourism used to contribute around 4 percent to the total GDP and over 15 percent of total foreign exchange earnings; the industry shrank considerably.

A group of tourists : Encouraging scene
According to the Economic Survey 2002/2003 published by the Ministry of Finance, the tourism industry could contribute only 1.9 percent to the GDP in the fiscal year 2001/2002. In that year, the tourism industry earned the total revenue of around US$ 100 million compared to nearly US$ 150 million in 1998/1999.

And most of this fall was seen in the sector of FIT, according to Niraula. “FITs occupy over 50 percent of the total tourists coming to this country and this sector has decreased by 40 to 50 percent,” he said.

What is more important is the impact on the spread of income the FITs contributed to the lower strata of people. Unlike organized travelers who stay in star hotels and travel through particular agencies, the FITs traveled on their own; stayed in budget hotels; bought foods and goods from local markets – directly pumping money into the hands of local people including farmers, small-scale entrepreneurs, porters, guides and so on.

The decrease in their arrival, naturally means the decrease in the trickle-down effects of tourism in the national economy. At a time when Nepalese planners are trying to use tourism as a tool to alleviate its grinding poverty, the decline in such tourism could badly affect their targets.

The Tenth Plan not only aims to use tourism for economic growth and favorable balance of payments, but also as an important instrument of poverty reduction ‘by increasing employment opportunities directly and indirectly in urban as well as rural areas, particularly in the hills and mountain areas along trekking trails and tourism sites’. And this is where the decline of FIT hurts the most.

At the end of the Tenth five-year Plan (2006/07), the government aims to achieve a remarkable and sustainable reduction in the poverty level in Nepal from 38 percent of the population at the beginning of the plan period to 30 percent. “And the role of tourism cannot be exaggerated if we are to achieve that target,” said an economist.

Less Affected Organized Sector

Fortunately, the decline in the organized tourism sector has not been as substantial. This is the only reason tourism is still afloat even in the middle of national crisis.

“As far as we are concerned, there has been no substantial decrease in the arrival of tourists this season,” said Bishnu Prasai, a director at Nataraj Travels and Tours – a leading travel agency. “But it is true that smaller hotels and lodges are finding difficult to survive.”

Prasai also added that the arrival of Indian tourists who come to play in the Casino has not been affected. “The tourists coming in packages have not declined because of instability here,” he said. “But, if there are going to be prolonged strikes, then naturally the scene will change.”

Daily wage laborers : Vanishing livelihood
The severe impact on FIT tourism is also substantiated by the facts on the ground. “It is true that five star and other star hotels are running with 80 to 90 percent occupancy these days whereas non-star and budget hotels are battling with less than 30 percent occupancy,” said Narendra Bajracharya, president of the Hotel Association of Nepal. Collectively, the hotels and lodges of Nepal have the capacity to cater to 1.5 million visitors a year. “But they are only getting to serve less than 300,000 visitors a year at present,” said Bajracharya.

Besides, the price war among the star hotels have also resulted in the lesser number of tourists preferring to stay in non-star hotels and lodges. “The star hotels have slashed their prices substantially and have lured tourists away from us,” said a lodge owner of Thamel. “Due to unhealthy competition, we are losing out.”

Gokarna Bista, a restaurateur at Lakeside in Pokhara, a scenic city in western Nepal, rues the decrease in tourists. “Compared to half a decade ago, we are making less than 20 percent of income. We are just getting by,” said Bista.

Agrees Puran KC of a resort in Sauraha, Chitwan – a jungle safari attraction in central Nepal. “Most of the tourists come in a package tour and visit big hotels these days. In the absence of individual travelers, lodges like ours have to run with empty beds. We are only making enough money to be able to pay the regular costs,” said KC.

Apart from restaurants and lodges, there are many other sectors hit by the absence of adequate tourists. “From souvenir shops to pizza eateries and from pashmina showrooms to vegetable vendors who earn by selling their produce to lodges – all have been affected,” said Niraula.

The handicraft sales have decreased by 2 percent, according to Kalyan Krishna Tamrakar, president of Handicraft Association of Nepal. The pashmina industry is in a steep decline with over 25 percent decrease this year compared to the last year.

“The number of tourists visiting small shops like ours have decreased by over 50 percent these days. Unlike in the past, most tourists prefer to buy things in shops located inside big hotels,” said Krishna Shrestha, a shopkeeper of a small handicraft and souvenir shop in Patan of Kathmandu valley.

Chandra Lal is another such victim. He has been selling flutes to tourists for many years in all major tourism centers in Kathmandu. From Thamel to three durbar squares and Swoyambhu Stupa, Chandra Lal used to frequent these places urging foreigners to buy his items. “I used to make enough money to support my family. But since last few years, the sales have dipped with fewer tourists coming to the country,” said Lal. He is planning to wrap up his business soon and go to Dubai to work to support his family.

The whitewater rafting sector’s decline also provides one indication of the impact. “From around 70 rafting companies a few years ago, now there are only 27 in operation,” said Mahendra Singh Thapa, president of Nepal Association of Rafting Agents (NARA).

Likewise, the concept of tea-house trekking was getting extremely popular in the past. But this has considerably dwindled with the growing insecurity. In tea-house trekking, individual trekkers travel on their own through popular trekking routes eating and staying at hundreds of tea-houses and small lodges opened up by local people across the route. Niraula said that the slide in the number of tea-house trekkers have affected the earnings of the people living in remote areas.

Impact of Violence

Just three weeks ago Maoists killed two tourism entrepreneurs in Ghandruk – a popular spot in the Annapurna trekking region. They also tried to loot a group of Israeli tourists recently. They bombed Fishtail Lodge in Pokhara on May 14. Over a month ago, the Maoists bombed a vehicle in which a group of French tourists were traveling. Although no one was hurt and the Maoists later apologized for the ‘mistake’, the incident triggered a panic among the tourism sector. “There are many reports that the Maoists try to extort money from the trekkers and tourists,” adds Murari Prasad Dhakal, chief of the Lion Trekking.

In durbar square : Attraction unlimited
All these factors have joined hands to impact the industry and people. “We are having sleepless nights with worries that the latest series of bombings, killings and strikes will further paralyze us,” said Dambar Bahadur KC, president of Pokhara Tourism Council. The tourism and hotel entrepreneurs of Pokhara city even took out a rally demanding peace and protesting killings and strikes.

Although many other sectors of tourism have taken a severe beating due to domestic turmoil, the mountain tourism still continues to lure tourists. The number of tourists coming for mountaineering has not decreased compared to previous years. The numbers of mountaineers were exceptionally high during the last year when there was Everest Golden Jubilee celebration. But compared to earlier years, their number has not decreased in the current season.

According to Purna Bhakta Tandukar, senior official at the Mountaineering Section at the Ministry of Tourism, Culture and Civil Aviation, 112 teams had come for mountaineering in 2001; 134 in 2002; 152 in 2003 and 55 in the spring season of 2004. Likewise, the number of teams coming for Everest ascent in 2001 was 13; in 2002 it was 14; and in 2003 it rose to 24. “In the spring season of the year 2004, 13 teams have already come. Some more will definitely come in autumn season as well. So, we can safely say that there has been no decrease in mountain tourism,” said Tandukar.

Changing Scenario

Despite the current turmoil, most tourism experts believe that Nepal will shine in the global tourism map once the stability is restored. Sandwiched between two Asian giants India and China – who are going to be biggest tourism generating market in the world in the coming years, Nepal’s prospects are bright they say. Already over 10 million Chinese visit foreign countries every year. Likewise, in the year 2004, whopping 6 million Indians will be packing their bags and heading off to overseas destination to celebrate their holidays. Even if only a fraction of them travel here, Nepal’s tourism outlook could dramatically improve.

The tourism planners also need to keep tab with the changing global scenario. With the heightened concerns for terrorist activities around the world, a huge number of tourists have begun to stay away from long-haul travels. “There will be an increasing trend of regional tourism. And Nepal stands to gain from such shift in trend because it is situated between two of the largest growing economies in the world,” said an official at the NTB.

Likewise, there is also another prediction by the tourism analysts that in the coming years, tourists traveling from land will grow substantially. Subash Niraula, a director at the NTB adds that since the air travel is costly and there is limited air seat capacity, the future of tourism would depend on the promotion of land travel as well. “There is a forecast that the travel of tourists by land will increase in the days ahead. So we need to have appropriate strategies to cash in the changing scenario,” he said.