Kiran Gurung

&
Ashish Thapa

APPLIED
RESEARCH
PROJECT, LB5235
MITHM.

Submitted to: Ian

Kirkwood

Problems and Prospects of Tourism in Nepal

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Contents
List of Figures.........................................................................................................................................3
Executive Summary...............................................................................................................................4
Introduction...........................................................................................................................................4
Problems statement..............................................................................................................................4
Research questions................................................................................................................................5
Literature Review..................................................................................................................................5
Tourism and its types............................................................................................................................6
History and development of tourism in Nepal.......................................................................................6
Tourism growth in Nepal since 1993.....................................................................................................8
Challenges and prospects concerning tourism in Nepal......................................................................11
Research methodology........................................................................................................................13
Data source......................................................................................................................................13
Data analyses, results and discussions............................................................................................14
Status of tourism in Nepal and their contribution to the country’s economy.............................14
Fluctuations in the trend of tourists visiting Nepal......................................................................17
Other problems and prospects concerning tourism in Nepal..............................................................17
ICT and Tourism...............................................................................................................................17
Health tourism.................................................................................................................................18
Climate change and sustainability...................................................................................................18
Conclusion and recommendations......................................................................................................18
References...........................................................................................................................................20
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List of Figures

Figure 1: No. of tourists visiting Nepal between 2001 and 2019, and the percentage change.
Figure 2: Income generated by tourism industry of Nepal, between fiscal year 2000-2001
and 2018-2019.
Figure 3: Annual trend of Nepal’s GDP growth and tourism’s contribution to it, 2001-2019.
Figure 4: By purpose categorization of tourists visiting Nepal between 2001 and 2019.
Figure 5: Trend of tourists visiting Nepal solely for trekking, between 2001 and 2019
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Executive Summary
Tourism is a very important sector contributing hugely to the socio-economic growth of
Nepal. It supports the local people through creation of job opportunities and improve their
livelihood. It is one of industries which benefits people of the extreme socio-economic
statuses; from people surviving on daily wages in remote villages to the big hoteliers and
agents in the cities. This study tries to look at the trend of development of tourism industry in
Nepal and identify challenges and opportunities for the better growth of the industry and
recommend accordingly. In this study, available secondary data from multiple sources have
been used and analysed qualitatively and quantitatively to draw inferences regarding the
problem and prospects concerning tourism development in Nepal. Furthermore, the article
highlights about the tourism related topical issues and the potentials and opportunities to
build a dynamic and sustainable tourism in the country. Some of identified fields are
information, communication and technology, traditional medicine, climate change and
sustainability.

Introduction
Tourism industry has been booming around the globe due to advanced development of the
communication and transportation system. Nepal has been a major tourist destination
among internal as well as external tourists due to its cultural, geographical, historical, and
religious diversities. Lumbini, birthplace of Lord Gautam Buddha and Mount Everest has
added the glory of Nepal around the globe. Beside this, adventurous tourism such as
Mountain Flight, Trekking, Jungle safari Bird watching, Sightseeing, mountain biking,
paragliding, rafting, bungee jumping, Homestay service etc has been major attraction for
tourist in Nepal. One of the main sources of income in most developing countries is the
tourism industry. The empirical results suggest that tourism earnings are one of the variables
that have positive impact, such as tax revenues and Nepal's real gross domestic product.
Tourism industry plays a crucial role to bring social transformation as well economic
prosperity through creating job opportunities and promoting handicraft and hospitality
industry in Nepal Tourism industry has been major factor to promote economic growth in
Nepal in the recent year. In the recent year the government of Nepal has given top priority to
this industry and announced “Visit Nepal 2020” but this program was not successful due to
Covid-19 pandemic.

Problems statement
World Travel and Tourism Council’s report of tourism’s economic impact shows that the
Travel & Tourism sector has grown in 2019 by 3.5%, surpassing – for the ninth consecutive
year – the global economy growth rate of 2.5%. Over the last half decade, one-fourth of the
new jobs in the market were created by the tourism industry (WTCC, 2019). As for Nepal,
travel and tourism in 2020 contributed to 7.9% of the country’s gross domestic product
(GDP). In the recent years, fluctuations in the growth and contribution of the travel and
tourism industry to the country’s GDP was observed; a slight decrease in the trend,
comparing to earlier period, through 2001 to 2020 was noted (Knoema, 2020). Various
factors have contributed to the fluctuation and inconsistency in the performance of the
tourism industry of Nepal over the past decades: political instability, natural calamities,
climate change, sub-optimal infrastructure, etc. This article attempts to identify the issues
and challenges concerning the growth and development of tourism in Nepal and the
corresponding solutions.
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Research questions
The article revolves around the following three questions:
1. What is the present status of tourism in Nepal and their contribution to the GDP of
the country?
2. What are the major problems and prospects of tourism in Nepal?
3. How to build a sustainable tourism in Nepal?

Literature Review
For the uniqueness, the kingdom of Nepal possesses in terms of demography, pristine.
environment, culture, and heritage, ethnomedicines, etc., the country is believed to have
huge potential concerning tourism development. Tourism industry is a backbone of the
country’s economy and contributes immensely to the socio-economic growth of the nation.
However, the tourism development is associated with various challenges and opportunities
as well. Thus, this study aims to review available articles in context to tourism in Nepal,
challenges faced and the prospects for the growth of the industry. This study reviews
available publications, recent ones, by categorizing into different aspects: climate change,
health tourism, environment and tourism sustainability, political instability and its impact on
tourism, and accessible tourism. This article also touches briefly on the history and
development of tourism in Nepal through descriptive analysis of a secondary data regarding
tourists visit to Nepal between 1993 and 2019.

Several attempts were made in defining the term “tourism”. However, a holistic and
universally accepted definition could not be framed. Therefore, most academic writers have
inclined towards defining the term in context to the purpose of their article (Lickorish &
Jenkins, 1997). Burkart and Medlik (1981) defines tourism as “the phenomenon arising from
temporary visits (or stays away from home) outside the normal place of residence for any
reason other than furthering an occupation renumerated from within the place visited”. Hunt
and Layne (1991) traces the evolution of definitions concerning tourism as per some
selected literatures from the United States and Canada and preference of the term’s usage
across the cities of the US. It was found that the confusions over the use of terms “travel”
and “tourism” were fading and the latter term becoming more acceptable to specifically
describe the activity of people taking trips away from their place of residence (Hunt & Layne,
1991). Afterall, the term “tourism” is contextual, and it depends on various factors associated
with activities concerning tourism in a particular country or a region.

The history and evolution of tourism in Nepal dates to ancient times. The Sanskrit terms
such as Paryant, Desant and Tirthatan refer to the practice of going out of home or country
for pleasure and knowledge, economic gain, or spiritual journey. Globally, the growth of
tourism industry started rapidly after the second world war, however, the modern concept
and development of tourism industry in Nepal is a recent phenomenon. After the start of
democracy in 1950, Nepal began to open to the outside world. As far as institutionalization of
tourism industry is concerned, tourism started as a royal project back in 1950s and
environment conservation to promote sustainable tourism in Nepal was taken under the
umbrella of royal patronage (Bhandari, 2010). To improve the foreign relationships at
international and regional level, the country became a member of important organizations
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like the United Nations Organization (UNO) in 1955, the World Trade Organization (WTO)
and the Pacific Area Travel Association (PATA) in 1963. In fact, the decade of 1950s is
considered as the most important period in the history of Nepal’s modern tourism. During the
decade, 7 of the 8 over-8000m peaks were scaled, including the glorious Mount Everest,
thereby, building the image of Nepal as the world’s top destination for mountain tourism
(Shrestha & Shrestha, 2012). Later, organizational and infrastructure development was
initiated with several reforms and constructive changes.

Due to the country’s vertical variation in the climatic zones, stretching from mountainous
north to plain south, the floral and faunal diversity has also become a point of attraction for
tourists from around the world. Geographical location of the country falling somehow at the
crossroads of the Indian and Tibetan civilizations, Nepal is also home to people of unique
ethnic backgrounds (Investment Board Nepal, 2014), which also plays a role in generating
interests in foreigners to visit the nation.

Tourism and its types

The word ‘tourism’ does not have a universally accepted definition; however, several
attempts were made by scholars and organizations in giving a holistic definition to this term.
The first definition of tourism was made by Guyer Feuler in 1905. The United Nation’s World
Tourism Organization is the lead agency responsible for the development of standardized
tourism definitions. This agency defines tourism as a social, cultural and economic
phenomenon which entails the movement of people to countries or places outside their usual
environment for personal or business/professional purposes. These people are called
visitors (which may be either tourists or excursionists; residents or non-residents) and
tourism has to do with their activities, some of which involve tourism expenditure (UNWTO,
2019).
Poser (1939), for the first time, categorized tourism into different types. In the paper, “Der
Fremdenverkehrim Riesengebirge”, he distinguishes several types of tourism: tourism by
transit, summer relaxation, winter sports, short distance relaxation. After that, Hunziker and
Krampf gave another idea about tourism types 1941. They categorized tourism as travel for
rest and treatment, pilgrimage, and scientific knowledge, etc. (Hunziker & Krapf, 1941).
Cohen (1972), a sociologist of tourism, classifies tourists into four types, based on the
degree to which they seek familiarity and novelty: the drifter, the explorer, the individual
mass tourist, and the organized mass tourist. Tureac and Turtureanu (2010), following a
literature review, distinguished tourism into six types: relaxing tourism, relaxing and health
care tourism, visiting tourism, transit tourism, reduced distance tourism, and professional
tourism. Classification and types of tourism may vary widely in different literature, however,
the criteria according to which tourism can be classified are similar: distance, length of stay,
geographic origin of tourists, type of transport used, how to organize your stay, the conduct
of the stay, peculiarities destination, interaction travelers with the destination, the price paid,
tourist`s age, and the number of tourists (Ana-Maria, 2016).

History and development of tourism in Nepal

Tourists have arrived in some form or the other from time immemorial in Nepal (Shrestha &
Shrestha, 2012). During the early historical era too, famous visitors such as Gautam Buddha
(R. B. K. C, 1982) and the great king of ancient India, Ashok (Satyal, 1988) have been
 6

recorded as having visited Nepal. The earliest published record on foreign visitors to Nepal
is found in Percival London’s book ‘Nepal’, where 153 Europeans, mostly British, are listed
to have visited Kathmandu in a period of 44 years from 1881 to 1925 (Gurung, 1978).
After the start of democracy in 1950, Nepal started to develop the different aspects of her
social, economic, and political life. Since then, the door of Nepal has remained open to
foreigners. 1950s can be considered as the most important period in Nepal’s tourism
development. During the decade, of the world famous 14 over-8000m peaks, 7 of the 8 over-
8000m peaks in Nepal were for the first time successfully scaled. The curiosity about the
isolated landlocked kingdom of Nepal as the vessel of vibrant cultures was raised following
the first successful ascent of the world’s highest mountain, Mt. Everest (8848 m), on May 29,
1953, by Edmund Hillary and Tenzing Norgay Sherpa. Ever since, tourism has become an
especially important and a key industry to Nepal; so much so that to some extent it
represents the third most prominent religion in Nepal after Hinduism and Buddhism (Thapa,
2004). The friendly people, the diverse cultures, the majestic grandeur of the sacred
Himalayas including the world’s highest summit, Mt. Everest, and the “Shangri-la” mysticism
have attracted visitors from all around the world. The international tourists visit Nepal
predominantly for pleasure, pilgrimage, trekking and mountaineering.
Chronology of relevant events contributing to the growth of tourism industry in Nepal are as
listed below:
1955 – Nepal was granted the membership of the United Nations Organization (UNO),
Non-aligned Countries’ Group, and the membership of different international
agencies.
1955 – World-renowned Thomas Cook and Sons brought a group of 60 tourists for a
Nepal tour. These events contributed to the gradual influx of foreign tourists in
Nepal.
1957 – The establishment of the Tourism Development Board under the Department of
Industry.
1959 – Nepal joined the membership 60 of International Union of Official Travel
Organization (IUOTO), present name, World Tourism Organization (WTO).
1962 – For the first time, the Tourism Department started keeping the statistics of the
foreign tourists coming into Nepal.
1963 – Joined the Pacific Area Travel Association (PATA).
1967 – Tourism Department came under the Ministry of Industry and Commerce.
1969 – Nepal Tourism Development Committee was established for formulating the
tourist policy as well as to draw a long-term development plan for this sector.
1972 – With the joint effort of UNDP and ILO, Hotel Management and Tourism Training
Centre was established with a view to produce trained manpower in tourism
sector.
1972 – For the planned development of tourism in Nepal, Nepal government joined
hands with the German government to prepare the 20-year 'Tourism Master Plan,
1972'.
1977 – According to the recommendation of the tourism master plan, a separate Ministry
of Tourism was established with a view to enhance tourism properly in the
country.
1984 – Review of the Tourism Master Plan.
1988 – The establishment of Nepal Tourism Board.
1991 - The Tourism Ministry was named Tourism and Civil Aviation Ministry.
1995 – Defining of Tourism Policy.
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1998 – The Tourism Board was upgraded to the Tourism Department under the Ministry
of Construction and Communications and Transport.
1998 – The Public-Private Partnership for the development of tourism in Nepal led to the
establishment of the Nepal Tourism Board.
1999 – Hotel Management and Tourism Training Centre was renamed as Nepal
Academy of Tourism and Hotel Management (NATHM).
1999 – The government decided to dissolve Tourism Department, and its functions were
transferred to the Tourism Ministry and Nepal Tourism Board.
2000 – Tourism and Civil Aviation Ministry was renamed as Culture, Tourism and Civil
Aviation Ministry
2008 – After the “Tourism Policy, 1995”, with a view to timely reform and change the
tourism sector the government brought the second “Tourism Policy, 2008”. The
special features of this new policy include attracting more tourists, marking “Visit
Nepal Year” or “Nepal Tourism Year” in designated years.
Presently, Tourism and Civil Aviation Ministry formulates the tourism related policies and
Nepal Tourism Board does the work of promoting tourism in the country.

Tourism growth in Nepal since 1993

As per the Nepal tourism statistics 2019 (2020), from 1993 to 2019, a total of
14,033,482 tourists visited Nepal (See Table 1), of which 22 percent were from India (See
Figure 1). During this period, a gradual increase in the trend of visiting tourists to Nepal was
recorded (See Figure 2).

Figure 1

Country of origin of tourists visiting Nepal, 1993-2019

Indian Third Countries

22%

78%

Data Source: Nepal Tourism Statistics 2019

Table 1
No. of tourists having visited Nepal, 1993-2019
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Year Third Indian Total Year Third Indian Total

Country Country
1993 210205 83362 29356 2007 430695 96010 526705
7
1994 223991 10254 32653 2008 409100 91177 500277
0 1
1995 246135 11726 36339 2009 416072 93884 509956
0 5
1996 271101 12251 39361 2010 481969 120898 602867
2 3
1997 288419 13343 42185 2011 586711 149504 736215
8 7
1998 320455 14322 46368 2012 637277 165815 803092
9 4
1999 350843 14066 49150 2013 616642 180974 797616
1 4
2000 367731 95915 46364 2014 654775 135343 790118
6
2001 296917 64320 36123 2015 464156 74814 538970
7
2002 208691 66777 27546 2016 634,753 118,249 753,002
8
2003 251769 86363 33813 2017 779386 160832 940,218
2
2004 294971 90326 38529 2018 978749 1943 1,17,307
7 2
2005 278964 96434 37539 2019 943041 254150 1,197,19
8 1
2006 290204 93722 38392 Total 11933722 308045 1403348
6 2 2
Data Source: Nepal Tourism Statistics 2019

Figure 2
Trend in number of tourists visiting Nepal, 1993-2019
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1000000
900000
800000 Third Country Indian
700000
600000
Numbers

500000
400000
300000
200000
100000
0
93 995 997 999 001 003 005 007 009 011 013 015 017 019
19 1 1 1 2 2 2 2 2 2 2 2 2 2
Year

Data Source: Nepal Tourism Statistics 2019

In 1993, a total of 293,563 tourists visited Nepal, whereas in 2019, a total of 1,197,191
tourists were recorded to have visited Nepal, thus observing a record of 307 percent
increment over the past 26 years (Ministry of Culture, Tourism and Civil Aviation - Nepal,
2020). The data showed that 53 percent of tourists visited Nepal for holiday celebrations and
pleasure, followed by trekking and mountaineering (16%), Pilgrimage (9%), etc. (See Table
2 and Figure 3).

Table 2
No. of tourists having visited Nepal for various purposes, 1993-2019
Year Holiday Trekking Busine Pilgrima Official Conv./ Others Not
Pleasure & -ss -ge Conf. Specifie
Mountaine d
-ering
199 170,279 69,619 19,495 10,429 15,812 5,367 2,566  
3
199 168,155 76,865 23,522 5,475 20,431 5,361 26,722  
4
199 183,207 84,787 21,829 5,257 20,090 5,272 42,953  
5
199 209,377 88,945 25,079 4,802 20,191 6,054 39,165  
6
199 249,360 91,525 27,409 4,068 24,106 5,824 19,565  
 10

7
199 261,347 112,644 24,954 16,164 22,123 5,181 21,271  
8
199 290,862 107,960 23,813 19,198 24,132 5,965 19,574  
9
200 255,889 118,780 29,454 15,801 20,832 5,599 17,291  
0
200 187,022 100,828 18,528 13,816 18,727   22,316  
1
200 110,143 59,279 16,990 12,366 17,783   58,907  
2
200 97,904 65,721 19,387 21,395 21,967   111,758  
3
200 167,262 69,442 13,948 45,664 17,088   71,893  
4
200 145,802 66,931 21,066 59,298 18,063   72,766  
6
200 217,815 101,320 24,487 52,594 21,670 8,019 78,644 22,156
7
200 148,180 104,822 23,039 45,091 43,044 6,938 99,634 29,529
8
200 140,992 132,929 22,758 51,542 24,518 9,985 87,134 40,098
9
201 263,938 70,218 21,377 101,335 26,374 9,627 52,347 57,651
0
201 425,721 86,260 17,859 63,783 24,054 10,836 37,311 70,391
1
201 379,627 105,015 24,785 109,854 30,460 13,646 48,540 91,165
2
201 437,891 97,309 30,309 40,678 39,881 15,952 62,214 73,381
3
201 395,849 97,185 24,494 98,765 32,395 13,432 53,728 74,271
4
201 386,065 9,162 20,876 14,996 21,479 9,038 77354  
5
201 489,451 66,490 24,322 82,830 21,310 12,801 55,797  
6
201 658,153 75,217   141,033     65,815  
7
201 703,843 187,692   169,180     112,357  
8
201 778173 197786   171937     49301  
9
Tot. 7,922,30 2,444,731 519,78 1,377,35 546,53 154,89 1,406,92 458,642
7 0 1 0 7 3
Source: Data Source: Nepal Tourism Statistics 2019
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Figure 3
Grouping of tourists visiting Nepal based on their purpose of visit, 1993-2019

3%
9%
1%
4%

9%
53%
4%

16%

Holiday Pleasure Trekking & Mountaineering

Business Pilgrimage
Official Convention/Conferences
Others Not Specified
Data Source: Nepal Tourism Statistics 2019.

As for the calendar year 2020, due to the travel restrictions following declaration of Covid-19
pandemic across the globe, only a total of 220,120 foreign tourists have visited Nepal
between January to November 2020 (Nepalisansar, 2020), thus greatly impacting the “Visit
Nepal 2020” year which was planned to achieve a milestone in the history of Nepal’s tourism
industry by attracting at least two million tourists to visit Nepal for various purposes.
However, With the resurgence of foreign visitors in the later part of the year, the tourism
board has started preparing strategic plans to attract more tourists to the country and
compensate the loss.

Challenges and prospects concerning tourism in Nepal

Tourism occupies a very important place in the plans and policies of Nepal government.
Since the first five-year development plan (1956-1960) of Nepal, activities related to tourism
infrastructure development were prioritized and emphasized. Ever since the opening of the
country to the outside world and development of regional and international relations after
1950s, the nation experienced a progressive growth in tourism industry, however, a decline
 12

in tourist numbers on few occasions recorded due to various socio-political reasons and
natural calamities. Like any other industry, road towards tourism development is bound by
issues and challenges, and opportunities as well. Therefore, it is very crucial to identify these
hurdles to make an informed decision and strategic future concerning development of
tourism industry in the country.

Figure 4 shows the percentage change in the volume of tourists visiting Nepal between
1995-2019: drastic drop in numbers between 2000-2002 due to political instability resulting
from the royal massacre and Maoist insurgency, and the numbers again plummeted in 2015
following the mega-earthquake and resulting disasters in Nepal (Bajracharya & Raju, 2020).

Figure 4
Percentage change in the no. of tourists visiting Nepal, 1995-2019

Mega-
Earthquake

Political instability

Data Source: Nepal Tourism Statistics 2019

The mega-earthquakes of April and May 2015 were the first significant natural disasters
since 1934 and represented a major setback to Nepal’s tourism development (Beirman et
al., 2018). Even though the natural disasters such as earthquake in a Himalayan country like
Nepal is inevitable, a systematic and stable government with strategic plans in place is key
towards growth and sustainability of tourism in the country; the resistance of the community
towards such events can be increased by adopting proper disaster relief and recovery plan.
The post-earthquake period was marked with some serious issues pertaining to the
preservation and reconstruction of some of the cultural sites. The early 2000s was a dark
period for the tourism industry and the country’s economy. The royal massacre on 1 June
2001 caused a state of confusion and speculation in the economy, and moreover, the
ongoing Maoist insurgency during the period led to safety and security issues in the country
(Bajracharya & Raju, 2020). The internal political drama and the resulting security issues
have had a huge impact on the arrival of tourists in Nepal during this period.
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Beirman et al. (2018) while conducting a research on Nepal tourism in the aftermath of the
2015 earthquake and aftershocks, recognised that Nepal is a difficult destination for tourists
with disabilities. According to Buhalis and Darcy (2011), travellers with a disability
(temporary or permanent) comprise 10% of the global tourism market and is likely to grow as
the populations of tourism generating countries age. The infrastructure to support accessible
tourism in Nepal is minimal; however, it was recognised that the challenge Nepal poses to
travellers with disabilities serves as an attraction, especially to the more adventurous
traveller (Beirman et al., 2018).
Due to the altitudinal variation and fragile geographic structures of Nepal, the phenomenon
of climate change and its impact had been observed in Nepal in the form of increase in
frequency of natural hazards, rise in temperature, change in rainfall patterns, shifting of tree
line and unfavourable weather change phenomena (Eugenio-Martin & Campos-Soria, 2010).
With reference to global Climate Change Vulnerability Index (CCVI), Nepal is fourth most
vulnerable country to climate change impacts in the world (MoSTE, 2015). Climate change
adversely affects those climate sensitive countries who are highly dependent on tourism
(Heymann & Fuchs-Sobolew, 2008), and it brings more risks by causing regional and
seasonal shifts in tourist flows. As per K.C (2017), most of the nature-based tourism
activities in the Himalayas are weather-sensitive, so the rain and foggy conditions
significantly decrease the quality of the trekking experience in the Himalaya. It was observed
that the unfavourable weather change phenomena had caused unpleasant situation for the
trekkers and mountaineers, and sudden climatic disasters taking lives of many tourists in the
past (A. K.C., 2017). Besides various measures taken by the government and the
international organizations to fight climate change crises in long run, it is very crucial to put
into place, the interim measures such as advanced early warning system, adequate rescue
measures and alternative tourism route for minimizing the impact of climate change on
tourism in Nepal.
Information, communication and technology (ICT) plays a vital role in developing business
practices around the globe. Many industries have experienced a giant leap through
application of ICT medium and platforms. Tan et al. (2019) points out that Nepal, which
relies on Tourism as its second biggest industry after remittance, has not been able to
harness the real benefits of ICT in tourism. His research work titled “Digital tourism
development and sustainability for Nepal” explores the Tourism Industry of Nepal to evaluate
the implementation, development and sustainability factors related to ICT application and
use. The study depicts that ICT is an important requirement for the growth of Tourism
industry in Nepal, and new forms of technological innovation requiring a new policy and laws
to address them adequately were found to be is missing at large in Nepal. The need for an
active role of ICT systems is felt for an effective management of payment gateway,
distribution channels, marketing, logistics, information collection, information sharing and risk
mitigation (Tan et al., 2019).
Health tourism is a specific branch of tourism that includes professional and controlled use of
natural healing factors and physical therapy in order to maintain and improve the health and
quality of life. According to Magablih (2002), “health tourism is the movement of a patient,
with the purpose of getting services that help in recovering his ailment, or at least in
stabilizing his medical case, outside his own country for a period of time not less than 24
hours and up to 1 year, each time, and the patient has no intent to work or reside
permanently.” Due to the crisis in health care systems in the developed countries, there
substantial growth in demand for health tourism. A literature review on the potential of health
tourism development in Nepal was conducted by Prasad and Shimizu (2019). Ayurveda, an
 14

ancient system of medicine based on the Tridosha Theory of disease, is inherent to Nepal
and was strongly encouraged in the medieval period of her history. Representing only 0.01%
of earth’s land area, Nepal is gifted by nature with 2.6% of all flowering plants. Therefore,
Nepal possesses a huge potential in health tourism development; however, there is not any
clear vision and strategy for its development (Bishnu Prasad & Shimizu, 2019). It was
observed that the health tourism providers failed to provide services in such a way as to
meet the expectations of health tourists who want to get quality in treatment, equipment,
employees’ look planned organization of cultural and heritage programs, co-operation,
friendliness and translator’s services, patient safety and airport pick up services including
road safety measures and the quality of roads offered to them to reach their destination
(Bishnu Prasad & Shimizu, 2019). With the huge potential and resources at disposal, this
growing interest of tourism in ancient medicines and practices can be tapped through
development of an institutional framework concerning health tourism.

Most visitors expect to see the local flora and fauna diversity, the unique architecture,
wildlife, a pristine environment and local customs and traditions, however this must be
managed in such a way to also meet the expectations of the local communities – access to
essential services, good communications and the opportunities to generate a liveable
income from tourism. The tourism development philosophy with a suitable balance between
the three dimensions of environmental, economic and socio-cultural aspects would
guarantee a long-term sustainability. Late King Mahendra, having realized about the
vulnerable ecosystems and fragile environment of the country began to have concerns
regarding the developing tourism in Nepal and its consequences. With the death of King
Mahendra in 1972, the newly crowned King Birendra took on a more proactive role in
developing ‘tourism’ with one of his main goals being to rid Nepal of its ‘freak and drug
heaven’ image and to replace it with ‘adventure tourism’ (Wall, 2020). The positive impacts
from a well-structured sustainable tourism plan as per Wall (2020) are as follows:
 Local community can mix with people from diverse backgrounds with different
lifestyles which through ‘demonstration effect’ may lead to the development of
improved lifestyles and practices from the tourists’ examples.
 There can be an improvement in local life through better local facilities and
infrastructure (developed to sustain tourism) which could lead to better education,
health care, employment opportunities and income. Tourism related business
opportunities can be developed.
 The conservation of local and cultural heritage of an area and rebirth of its crafts,
architectural traditions and ancestral heritage to meet client expectations.
 The income generated from permits and fees should be reinvested back into the local
communities to strengthen capital development.
 The government would benefit financially from the taxes and other tourism related
charges.

Research methodology
The practice of using already secondary data for research and analysis has become very
prevalent due to the availability of enormous amounts of data collected and archived by
researchers and organizations (Andrews et al., 2012). As indicated by Johnston (2014)
about the processing and interpretation of existing data being a feasible option for
researchers who may have insubstantial resources; in the interest of time and resources,
 15

and due to the availability of abundant research articles, reports and statistical data
regarding tourism in Nepal, its development, challenges and prospects, this article has also
adopted the methodology of secondary data analysis to answer the research questions.
The information presented in this article are compiled and summarized through review and
critical analysis of qualitative and quantitative data from various journal articles, reports and
relevant documents. The available secondary data concerning tourism industry and
development has been analyzed and presented descriptively.

Data source
The data collected for analyses in this study were from various publications of international
institutions and government agencies. The study covers the situations and trends concerning
development of tourism industry of Nepal between the period of 1992 and 2019.
The quantitative data on tourist arrivals and their purpose of visits were collected from the
Nepal tourism statistics 2019 published by the Ministry of Culture, Tourism and Civil Aviation
of Nepal in 2020 (MoCTCA, 2020). Similarly, the data on contributions of travel and tourism
sector on the economy of Nepal was retrieved from the World Travel and Tourism Council
data (WTCC, 2019), and Nepal’s GDP growth figures were retrieved from the World bank’s
national accounts data (The World Bank, 2021). The qualitative data used in this study were
compiled from various journal articles and official reports concerning challenges and
prospects of tourism development in Nepal.

Data analyses, results and discussions

Status of tourism in Nepal and their contribution to the country’s economy
Over the last two decades, between 2001 and 2019, almost 12 million tourists visited Nepal
for various puposes, averaging 0.6 million per year. As shown in Figure 1, except for early
2000s and in 2015, rest of the caledar years have observed gradual increase in the number
of visitors to the country, however, the numbers have fluatuated in between due to various
reasons. Comparing the years, 2001 and 2019, there was an increase in number of tourist
by 231 percent, a drastic rise.

Figure 1: No. of tourists visiting Nepal between 2001 and 2019, and the percentage change.
 16

Data source: MoCTCA, 2020

Figure 2: Income generated by tourism industry of Nepal, between fiscal year 2000-2001
and 2018-2019.

Data source: WTCC, 2019 and The World Bank, 2021.

Since the fiscal year 2000-2001, till 2018-2019, the tourism industry of Nepal generated a
total income of 1.33 Trillion Nepalese Rupee (NR), averaging about 70 Billion NRs. Figure 2
depicts the exponential growth in the income generated by tourism industry over the two
 17

decades, and between 2001 and 2019, an income growth rate of 410 percent was observed.
The fiscal year 2018-2019 alone generated about 152.5 Billion NRs.

Figure 3: Annual trend of Nepal’s GDP growth and tourism’s contribution to it, 2001-2019.

Data source: MOCTCA, 2020

Figure 3 shows the linear growth of Nepal’s Gross Domestic Product (GDP). Over the past 2
decades, an average annual GDP growth rate of 3.3 percent was recorded and gradual
increase in the trend of GDP growth was observed, however, the tourism industry’s
contribution to the country’s economy was declining. Nevertheless, the sector contributes to
an annual average of 7.9 percent of the total GDP.

Figure 4: By purpose categorization of tourists visiting Nepal between 2001 and 2019.
 18

Data source: MOCTCA, 2020

As shown in Figure 4, about 53 percent of tourists who visited Nepal between 2001 and
2019 came for holidays – a usual behavior or tendency. Due to the scenic beauty and
adventurous terrains of the country, 15 percent of the tourists visited Nepal for trekking and
mountaineering, for which the nation is famous for and often called as the “Mecca of
trekking”. Nepal is also considered as a sacred destination for Hindus and people from India
visit the country predominantly for pilgrimage – about 11 percent of the tourists came for
pilgrimage (see Figure 4).

Figure 5: Trend of tourists visiting Nepal solely for trekking, between 2001 and 2019.

Data source: MoCTCA, 2020

The snowcapped mountain peaks, green valleys and rivers, rich flora and fauna, and the
adventurous rugged terrains of Nepal are the main attractions for passionate hikers and
trekkers from around the world. Between 2001 and 2019, a total of 211,061 tourists visited
Nepal exclusively for the purpose of trekking and mountaineering – an annual average of
11,108 tourists. As represented in Figure 5, the growth in terms of tourists coming to Nepal
 19

for trekking has been exponential, and over the past 2 decades, number of tourists for this
adventure has increased by 618 percent.

Fluctuations in the trend of tourists visiting Nepal.

As visualized in Figure 1, the number of tourists visiting Nepal between 2001 and 2019 were
inconsistent and varied on some occasions. As a result of which, the income generation and
contribution to the country’s economy also fluctuated or declined (see Figure 2 & 3). The
driving forces behind these swinging figures are internal as well as external.
The sharp decline in 2000 and 2001 had happened due to undesirable and worrisome
events like hijacking of Indian airlines, Maoist insurgency and the infamous royal massacre
in Nepal. The year 2008 also observed a decline in the tourists, and it was caused primarily
due to a prolonged strike at the International airport of Bangkok, an important transit airport
to enter other south Asian countries. Another drastic fall in the tourist numbers visiting Nepal
was recorded in 2015, during which the country was hit hard by a mega earthquake of 7.8
magnitude claiming about 9000 lives and injuring more than 22000 people. All these events
resulted into disruption of tourism related service delivery chain. Moreover, it threatens the
security of tourists and puts their lives at risk, thereby diverting the tourists to other safe
places in the region.
Issues like political instability and natural calamities are very unpredictable. There are
numerous causes and drivers for these events to occur and not everything is under men’s
control. However, to nullify the impact of these incidences on tourists and people in general,
strategic contingency plans need to be in place for preparedness and response during these
unprecedented events. A country like Nepal whose economy is influenced by tourism
industry should anticipate and prepare response plans to maintain the flow of businesses
undisturbed. For example, the unprecedented Covid-19 pandemic has taught the countries
all over the world of the importance of domestic tourism and how it can help to the survival
and livelihood of the people dependent on tourism.

Other problems and prospects concerning tourism in Nepal.

ICT and Tourism
Regardless of the type of enterprise, accessibility to authentic information in a shortest
possible time is what every customer demand, and it fits perfectly in context to tourism and
their clients. A safe, reliable and detailed information with just a click can be made possible
only through ICT tools and platforms. Concerning the integration of ICT tools into tourism
industry, the main objective is to build an easily accessible platform where the clients can
visualize the products and related information and provide feedbacks and comments for the
better growth of the industry (Bethapudi, 2013).
There are numerous published articles and journals about tourism industry of Nepal, their
growth, challenges and opportunities. However, the contents regarding information and
communication technology (ICT) development in the tourism sector is very limited or faintly
touched. Tourism in Nepal, the second biggest industry in terms of its contribution to the
nation’s economy, for not being able to harness the immeasurable benefits of ICT, a study
was conducted by Tan et al. (2019) to analyse and identify the factors affecting the growth
and sustainability of ICT application in the tourism industry of Nepal. The need for proper
ICT system for efficient growth of the tourism industry was depicted in the study. For the
sustainable growth of ICT services, the study has recommended for the implementation of
ICT development programmes at the national, tourism industry and ICT industry levels (Tan
et al., 2019).
 20

Health tourism
One of the entities which will definitely contribute to the growth of tourism industry of Nepal
and the health tourism, a nascent and unexplored field with huge potential to attract modern
tourists, especially from the west. Nepal’s practice of traditional medicines, the term defined
by WHO (2013) as “the sum total of the knowledge, skill, and practices based on the
theories, beliefs, and experiences indigenous to different cultures, whether explicable or not,
used in the maintenance of health as well as in the prevention, diagnosis, improvement or
treatment of physical and mental illness”, includes Ayurveda, Meditation, Yoga and Spa.
These practices are deeply rooted in the country’s culture and religion, and have been
practiced legitimately for ages (Koirala & Khaniya, 2009).
With the change in modern people’s way of living and consequent lifestyle associated
diseases, and their preference for the eastern conservative traditional medicine practices
over the modern western medicines, the number of tourists visiting Asian countries to
receive these ancient treatments have increased. Nepal, being one of the countries where
traditional medicines have been practiced for centuries, have enormous potential concerning
the development of health tourism. Prasad and Shimizu (2019) have conducted a study to
identify the potential for development of health tourism in Nepal. Owing the geographical
location of the country, stretching from world’s highest mountain peaks in the north to the
southern plains, and abundant medicinal plants, the country has huge potential for the
development of health tourism; however, the challenges like lack of proper documentation
and information management systems, collaboration between health and tourism sectors,
specialization in the field of traditional medicines, infrastructure and legal frameworks are
there to obstruct (Prasad & Shimizu, 2019). Therefore, addressing these gaps and issues
must be prioritized by the concerned agencies.

Climate change and sustainability

Similar to the decline in tourist numbers visiting Nepal in the past due to the political
instability and natural calamities like earthquake, climate change is predicted to affect the
tourism industry of Nepal down the line. The Hindu Kush, often known as the earth’s third
pole, is the region which is in a perilous situation due to the phenomenon of global climate
change, and Nepal, being one of countries under the region, have been already
experiencing the consequences. The global Climate Change Vulnerability Index rates the
countries depending on their vulnerability to the impact of climate change, and Nepal has
been rated amongst the top five countries in the world (MoSTE, 2015).

A few studies were conducted to qualitatively measure the impact of climate change on the
tourism industry of the country and relevant stakeholder’s perception about it (K C & Thapa
Parajuli, 2015; Nepal & Nepal, 2004; Rayamajhi, 2013). Climate change driven discomforts
like untimely and intense rain and snowfall, water scarcity, flood and landslides, decreasing
snow level and glaciers, etc. were identified to be negatively affecting the industry and the
livelihood of people dependent on tourism businesses. The major proportion of tourists visit
Nepal for trekking and mountaineering and the activity is highly dependent on the climate
and weather conditions of the area. Although not much can be done immediately at local
level to combat the change, however, interim measures like early warning and preparedness
plans and strategies can be put into place to minimize the impact of climate change and
associated hazards on the industry and people depended on it.
 21

Conclusion and recommendations

Ever since the opening of Nepal’s door to outsiders, the tourism industry has experienced an
exponential growth over the last 6 decades, starting from 1950s. The industry has
contributed hugely to the livelihood of Nepalese people through creation of thousands of
employment opportunities and income generation, thus contributing enormously to the
growth of the country’s economy. However, various distressful events like political instability,
social uprise, natural calamities have affected the industry through the decline in the number
of tourists visiting Nepal in these years. A proper strategic plan must be developed for
implementation to minimize the impact of such incidents, which are unpredictable and
inevitable in some cases.
The tourism industry of Nepal has abundance of resources and potentials to capitalize on.
For example, the ICT department of the tourism is in naïve stage, which if used efficiently
can bring a revolutionary change to the sector. The country’s richness in traditional
medicines and practices can become an attraction to the ever-increasing conservative
treatment seeking populations of the west. The state and the industry need to prioritize and
invest into these departments to make the tourism products of Nepal a more diverse and
efficient.

The phenomenon of climate change and its impact is a big issue to address, and Nepal
being amongst the nations geographically susceptible to the consequences of climate
change and global warming, it has become crucial to prepare to make the impacts bearable.
For being a famous destination for trekking and other adventures, the country is even more
susceptible to losing the tourists because of the landscape’s fragility to these climate
changes and the associated threats to the lives of visiting adventurers. Keeping abreast of
all these inevitable situations, well-informed plans should be in place to sustain the industry
and the dependents.
Further research and studies with in-depth analyses on aforementioned issues and
prospects concerning tourism in Nepal should be conducted in collaboration with all the
relevant stakeholders to make an informed decision and strategies for the sustainability of
the industry, socio-economic benefit of the people and development of the nation.
 22

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