Guess what people are discussing in Pokhara—the second tourist hub in the country? Nepali politics! There is a sense of hopelessness in the air. International tourists have dwindled since the earthquake. Tourist entrepreneurs hope that the Indians, who usually drive up north during summers, will still come, but not sure how they would behave. One restaurant owner was wondering how he would react when the demanding Indian tourists start arguing. Will he relent this time knowing very well that many Nepalis blame the Indians for the blockade that wiped out any chances of tourism’s revival in late 2015 and early 2016? Of course, there are Chinese tourists, and the entrepreneurs do have signage and menus in Mandarin, as well as conversational Mandarin to deal with them. However, they complain that the Chinese are worse than the Indians when it comes to arguing, behaving rudely and paying for the services and that they always find ways to short-change them.
Many of them suggest in unison that Nepali tourists are the ones who spend the most and whom they are the happiest about. They do not mind having five people sleeping in one room, as they rack up large food and booze bills. Many Nepali families, especially nouveau riche ones, splurge and meet each and every demand of their children. A middle-aged man running a hotel with a decent restaurant had an interesting observation on behavioural economics to share. His opinion was that in busy family life in Kathmandu today, there are working couples who leave their children to be practically taken care of in all respects by grandparents or a nanny. These couples use splurges during vacations to get over their guilt of not being able to spend time with the children. Therefore, they are willing to order the fifth snack and the sixth dessert. They perhaps constitute the biggest spender in his hotel.
Cartels and More
Nepali tourism entrepreneurship has been relegated to fighting for elections for a plethora of tourism associations rather than thinking of how the tourism industry can be recalibrated. After the earthquake and the blockade, tourism entrepreneurs are lobbying for more concessional loans, waiver for interests and re-scheduling of various loans. Everyone knows where any concessional money would go on the quiet—maybe into funding another real estate venture! Tourism associations have ensured that they fight ferociously for the pie through a unique strategy of informal price cartels and arbitrage on opportunities rather than thinking of how to increase the size of the pie.
In Kathmandu, tourists pay one of the highest airport transfer prices given the five-kilometer distance to the heart of the city. Tourist guides promote stores that give them the highest commission rather than explaining to the tourists the rich heritage of the Valley. When one can google anything under the sun, a guide has to provide insights not found in online guides and share anecdotes that will excite the tourists. During my regular visits to the Golden Temple in Patan, a rich heritage destination where tourists can be retained for hours, I see groups of tourists either clicking pictures or just yawning as the guides rattle on.
Services at hotels have plummeted, as good workers who do not want to be a part of unions leave Nepal for better opportunities. Politically-affiliated unions have made words like productivity, efficiency and meritocracy alien to the hospitality industry. Owners have to battle with unions in every activity of operation. Absence of global players in the industry has created another sector where rent-seeking has become more important than entrepreneurship.
The government has done little to help improve the industry. It is not fair to expect politicians and bureaucrats to act as they rarely travel as tourists on their own money. By keeping the Nepal Tourism Board headless for years, we have suffered in the same way as by not having an ambassador to India for over three years.
Globally, the tourism industry has undergone one of the biggest transformations in the last decade. Airbnb, which does not own a single hotel, is valued more than hotel chains and Uber, which does not own a single car, is the world’s largest transport company. Tripadvisor has changed how people decide on their travel options, how they travel and what they do after that. Gone are the days of coming back and sharing pictures with your friends and loved ones over a meal. Now it is about co-creating content for future travels. It is not just about attending the ITB Berlin (Internationale Tourismus-Börse Berlin), the world’s largest tourism trade fair, or Travel marts drinking whisky you buy at duty free-stores with some agents. It is about thinking of how you excite the guy who has never even heard of Nepal. New ventures like hivetravel.com are changing how people hire experts to plan their trips.
Gone are the days of hotel ratings that the Nepal government puts so much emphasis upon. The eligibility criteria can easily substitute joke books.
It talks about having indoor games like carrom and table tennis. Many hotels around the world now use smartphones and apps to enhance guest security and experience. Our hotels still believe in and require having four clocks showing global time at the reception when no one goes to the reception to check the time anymore!
With China and India touching 150 million and 50 million outbound tourists by 2020, Nepal’s best bet still remains tourism—an industry that creates many jobs and where service differential can still ensure you make more. A lot needs to be done about the industry. It has to be entrepreneurs who drive this industry forward as it had been in the 60s, 70s and the early 90s. Perhaps the first steps will have to be disbanding the plethora of industry associations and thinking afresh!