Investments in large scale-hotels drop by 19 per cent in last fiscal

KATHMANDU, August 9: While the economic recession has affected most of the sectors, investment commitments in the hotel sector have also dropped compared to the previous financial year.

As per the data maintained by the Department of Industries, investment in large-scale hotels has dropped by 19 percent compared to FY 2021/22. 

According to the department, as many as 11 large-scale hotels were registered in FY 2017/18 with an investment commitment of Rs 10.19 billion. Since then investment in the hotels sectors has continued to drop. In FY, 2018/19, investment in large-scale hotels dropped to Rs 7.12 billion for 12 establishments. In FY, 2019/20, a total of Rs 8.2 billion was invested in nine large-scale hotels in the country.    

The following year, investment dropped to Rs 5.49 billion for four such hotels as a result of COVID-19. In 2021/22, investment commitment for nine large hotels increased to Rs 16.68 billion. In the last fiscal year, investment commitment dropped by Rs 3 billion to Rs 13.59 billion for nine hotels compared to the previous year. The increase in interest rates along with the economic recession last year has affected hotels with large investments, as per entrepreneurs.

Sur Krishna Vaidya, vice-president of the Federation of Nepalese Chamber of Commerce and Industry (FNCCI), shared that the economic recession has affected the hotel business, and has not been able to come into full operation.

According to him, businessmen who had thought of new investments withdrew from their decisions due to the increase in interest rates along with the economic recession. He said that the current financial year's budget and fiscal policy have made businessmen even more depressed, so it will be difficult to invest in large areas.