| March 21, 2019

Tourists are coming back

Tourists are coming back

Upaul Majumdar is the General Manager of Soaltee Crown Plaza Kathmandu. He has been involved in tourism sector for the last two decades. With the experienced Majumdar at the helm, the hotel managed to sail through the rough weather in the hospitality industry smoothly.

Kuvera Chalise and Susheel Bhattarai of Republica recently talked to him to know about the challenges of Nepali tourism industry and the way forward. Excerpts:

Despite back to back crisis, your hotel managed to sail through the rough weather smoothly. What is your success mantra?

Soaltee Crown Plaza is the oldest deluxe five-star hotel in the country. It is owned by Soaltee Hotel Limited and managed by Intercontinental Hotels Group (IHG). One of the benefits of the tie up is we are present globally. We are part of Asia, Middle East and Africa, and South Asia network. About 25 to 30 percent of our bookings come from the international network. Besides, we also have international sales organization which has been sending Indian corporate business.

The problem is sending a message that Nepal is safe as people were not travelling to Nepal recently after the natural disasters. We have to use the global media to say, 'everything is back to normal in Nepal'. The travel trade has not been relaying this message well and not getting the confidence in tourists to travel back to Nepal. Likewise, when Nepal was down, other destinations came up, and travelers have been diverted to these destinations. So we have to bring them back by launching massive global media campaign. As a hotel, we have worked on new marketing strategy. We worked hard in major tourist source markets like India and China. China had also cut down flights to Nepal due to blockade and fuel crisis. But we developed a new market in Bangladesh, from where people used to visit Nepal earlier but had stopped after the quake. With did lot of joint promotion with casino to bring back the tourists. When Nepal Airlines started flying to India, we tied up with the national carrier for joint promotion. Because of various efforts we did, tourists are back.

Was there coordinated effort between Nepal Tourism Board, Hotel Association of Nepal and the government?

The Nepal Tourism Board (NTB) was long been without its chief. They have just got the CEO. Now the new CEO is already trying to put things together. Now, the things are on the verge of take off. Likewise, the tourism minister is also trying to do a lot of things to help promote tourism. He is very positive. We had no fuel during the blockade. When we sought his help, he actually took the initiative in giving priority to the hotels. It's not that the agencies are doing nothing. But what we are doing may not be enough. Also, it happens that different hotels have different challenges. Big ones have one kind of challenge and smaller ones may have the other. Smaller ones shut down services when things were difficult. But we could not do so. The biggest problem we faced during the blockade was transport being not available due to lack of fuel. We were not able to run heating system in the room. Tourists come to Kathmandu and go further to visit Nepal. One gets in and gets out of Kathmandu as Kathmandu is like a transit for tourists. To access to those paces was a challenge due to shortage of fuel. Getting good accommodation and quality service became challenge which also kept away a leisure business. Nepal is largely a leisure market. But we started seeing lots of tourists from March. Most flights are now full. The tourism ministry worked with supplies ministry and reduced the fuel price for airlines, though baggage handling is still challenging. Our airport still needs more modernization. Business is coming back as we all have incentivized it. But rates are far lower and profit margins are wafer thin.

Nepal is often called cheap destination. Is Nepal a cheap destination or a value destination?

I will use the word value destination, not cheap. It is a highly incentivized market where lots of bargain is available. We need to tell the world our terminology. So, we need professionals to design campaign for Nepal and tell the world the right word. Nepal is giving higher value package, room rates are low. But it will slowly pick up when the business picks up. It's a natural phenomenon.

What about 'Nepal is Safe' campaign? Isn't it bearing fruit?

It is; in a personal level. It is also helping to promote Nepal among people. But I think we need to run more promotion campaigns. We need the government to get large groups of journalists and traveling people to Nepal to organize fam tours and budgeted tours. They will go back and tell the world that everything is back to normal in Nepal. Summiteers are back to the Everest region. But how much publicity has been given to them? We should have got global media like BBC, CNN, and National Geographic, among others. They would have publicized Nepal. They are very credible sources. We need credible sources telling the world that Nepal is back to business. That is what the gap is just now.

Second, there is lack of incentives. To revive the tourism industry, we have to incentivize it. We are still charging tourists heavy fee as Tourism Development Fee. We can incentivize hotels like Thailand did after Tsunami. The third thing is there is no incentive in investment in tourism infrastructure in Nepal. Tourism is a huge employment generating business, so it has to be dealt with separately. Give tax holiday for sometimes and allow duty free imports against foreign exchange earnings without affecting the government revenue. Let's help build more tourism infrastructure. We need a strong PR and professional media campaign in traditional and emerging markets. Tourism is a different business unlike other industries. Here people come and bring foreign currency, and they spend it all here and leave. So it has to be looked at from different angle and treated specially.

Despite having comparative and competitive advantages, tourism is not moving forward as expected? Why?

Nepal has a vast bio-diversity that one can't find anywhere in the world. Cold high mountains and hot plains lie just 80 kilometers of each other. We have various constraints; one is we have only one international airport. It is being expanded, but the pace has been rather slow. Also it is a very expensive airport. We have to compare with other airports in neighborhood. Flights to neighboring countries are cheaper compared to Kathmandu because airlines complain that they cannot reduce airfare because of high ground handling charge. Similarly, going out of Kathmandu is difficult as there are no good roads. To move freely and smoothly, these roads need comfortable transport which is also missing. Something is happening though. We have new taxis now. But it's not enough. These efforts need to be far higher considering that we had blockade and earthquake, and we have to get people back.

Quake-damaged monuments need to be repaired faster so that tourists can go visit them. Public private partnership (PPP) could be the best way for quicker heritage reconstruction. We all are ready to join hands, but funds have not been released. Experts may come free but money has to be there to start reconstruction. Private sector is doing something but the government is only providing lip service. Once the reconstruction starts, the economy will kick-start.

Likewise, Nepal needs to have medium-range hotels as most of the travelers today are middle class. So, we need community hotels that can cater to the vibrant middle class.

How did you manage to run during blockade?

We did four things. We involved our employees, guests, government officials and sought alternative to petroleum products. First, we sought cooperation of our employees to sail through rough weather. We cut down our use of gas for cooking for staff. Likewise, we worked with customers and cut down lots of wastage, shut down one wing and three restaurants, and made menus in remaining restaurant available. Third, we engaged government; we did lot of lobbying with tourism and supplies ministries for regular supply of fuel. We did not buy even a drop of fuel from the black market. Fourth, we searched alternative energy. We used steam, electricity, induction, firewood, and gas to prepare food. With the cooperation of employees, guests and government, we weathered the crisis. And today looking back, there is much learning from the blockade too.

What are your expansion plans?

We are doing regular renovations ever year. We have been working on expanding our business to other cities. The first one is coming in Nepalgunj by 2017. We will move to other cities gradually. We will take Soaltee hospitality to all the cities. As Nepal moves forward, so will the hotel.