"Nepal Tourism Challenges: Hoteliers Push for Higher Tourist Spending Limits and Currency Flexibility"

KATHMANDU, July 12: Nepal’s tourism industry experienced a notable increase in foreign visitors in 2023, surpassing the one million mark. However, the Nepal government aims to attract 1.6 million tourists in the next fiscal year, 2081/82, amidst various challenges and industry concerns.

Despite the increase in tourist numbers, the length of stay and daily expenditure per tourist have seen only slight growth. Data from the Nepal Tourism Board indicates that the average stay lengthened from 13.1 days in 2022 to 13.2 days in 2023. Daily spending also rose marginally from $40 to $41. Hotel industry leaders argue that restrictive government policies are hindering further growth in tourist spending.

Nepal Rastra Bank's regulations permit foreign tourists to bring a maximum of $5,000 into the country and limit their daily spending to $300. Prabin Bahadur Pandey, Senior Vice President of the Hotel Association  Nepal (HAN), criticized these limits, stating, “Such restrictions are counterproductive. Tourists are unable to spend freely, impacting both their experience and the local economy.” "With the opening of a dollar account in the hotel, the smart card system had to be implemented so that tourists can exchange up to 10,000 US dollars," added Pandey.

The hotel industry, particularly five-star establishments, has been vocal about the need for more accommodating policies. During a recent HAN event, hoteliers highlighted the adverse effects of current monetary policies on their businesses. They argued that increasing the daily spending limit to $2,000 for guests at four and five-star hotels could significantly benefit the sector.

Hotel owners also proposed the introduction of duty-free shops at major international airports, including Tribhuvan International Airport in Kathmandu, to attract more tourists. Additionally, they stressed the importance of rescheduling loans to help the hotel industry recover from the COVID-19 pandemic. “If loans are not restructured, many hotels will face closure, leading to significant job losses,” warned Dinesh Tuladhar, Mananging Director of Hotel Himalaya.

With an increasing number of tourists from Bangladesh, there is a call to allow transactions in Bangladeshi taka. Furthermore, Shashikant Agarwal, Chairman of Kathmandu Marriott, suggested raising the cash limit for Indian tourists from INR 25,000 to INR 200,000 and permitting higher denomination notes than INR 100 to facilitate easier spending.  Balaram Sapkota, the owner of Mechi Crown, also said there should be no limit on the spending of tourists. “It is becoming difficult for Indian tourists to run casinos due to cash limits. They are not able to spend as they want,” he said. 

As Nepal strives to meet its ambitious target of 1.6 million tourists in the coming fiscal year, industry stakeholders are urging the government to revise its monetary policies to foster a more conducive environment for tourism growth. These changes are seen as essential to enhancing tourist experiences, boosting spending, and supporting the recovery and development of Nepal's hospitality sector.