Tourism industry seeks incentive package for Visit Nepal 2020
KATHMANDU (The Kathmandu Post/ANN) – Cheaper aviation fuel, cash grants for high performers, tax discounts and removal of entry fees among major demands.
The tourism industry has asked the government for a slew of incentives including policy reforms instead of a standalone proposal to make Visit Nepal 2020 a winner, according to people familiar with the matter.
The government is slated to launch the much-awaited tourism marketing campaign on January 1 with an aim to bring 2 million tourists during the year, and inject at least Rs200 billion into the national economy.
Two months ago, travel traders had submitted a charter of demands to the Tourism Ministry through the Visit Nepal 2020 programme implementation sub-committee. Their requests include implementation of an auto pricing mechanism for aviation fuel sold to international airlines, and opening up some restricted areas adjoining the northern border which have huge tourism allure.
A copy of the tourism industry's wish list obtained by the Post doesn't include any suggestions for removing connectivity bottlenecks and improving roads which are in a very bad state. One senior government official said the travel traders had presented a long wish list, but they didn't have any plans to open their wallets for tourism promotion and marketing.
Aviation fuel prices at Tribhuvan International Airport are among the highest in the world at $1,000 per kilolitre. This is a constant complaint among foreign airlines as fuel accounts for 35-40 percent of their operating costs.
According to the website of Indian Oil, aviation fuel costs $667.25 per kilolitre in Delhi and $723.97 per kilolitre in Kolkata.
Nepal Oil Corporation has been charging a high price for aviation fuel and subsidising cooking gas. “The steep cost of jet fuel is one of the biggest concerns of the private sector which has made air travel expensive in Nepal. In the context of Visit Nepal 2020, we have asked the government to consider this issue seriously,” said Krishna Hari Khatri, coordinator of the Visit Nepal 2020 programme implementation sub-committee.
Khatri, who represents the private sector, said they were hoping for a full package of government incentives that would encourage the industry as a whole.
In a recent interview with the Post, Birendra Bahadur Basnet, managing director of Buddha Air, said that fuel prices are worrisome for all international airlines and domestic airlines that wish to spread their wings to the global market.
“We have also asked the government to open up some restricted areas in view of the national campaign,” said Khatri.
Most villages in Taplejung, Sankhuwasabha, Solukhumbu, Dolakha, Rasuwa, Gorkha, Mustang, Manang, Dolpa, Mugu and Humla districts that adjoin the Chinese border were declared out of bounds to foreign visitors in the 1970s.
Foreigners are required to get special permits from the Department of Immigration to travel to these areas. Also, permits are not given to individual trekkers. Only trekkers travelling in a group through a government authorised trekking agency can apply for permission. Permit fees range from $10 per week to $500 for 10 days depending on where you go.
Trekking agencies and tour operators have been lobbying with the government to open up such areas that have an immense potential to contribute to the country’s tourism and the local economy.
In the 1970s, the government imposed restrictions on the movement of foreigners in a number of northern villages bordering China's Tibet region as Khampa rebels were found using Nepali territory to mount cross-border raids. In 1974, the Nepal Army succeeded in completely disarming the Khampa rebels, but the travel restrictions remained.
“We are also in favour of opening up some restricted areas which have easy transportation access,” said Rudra Singh Tamang, spokesperson for the Tourism Ministry. “We have to first ensure there is access before opening these places.”
Tamang said the ministry was studying the proposal submitted by the private sector, and would come up with detailed packages containing incentives, promotional activities and some policy reforms, including fuel price adjustment.
“The government will lead Visit Nepal 2020, but the private sector should chip in money to support the national campaign. They also have to open their wallets wider,” he said. “In fact, the private sector is a driver of the economy; and in tourism, they lead in almost all areas. We want them to spend more on promotional activities.”
The private sector has also requested the government to waive visa fees to increase tourist arrivals during the June-August period which is considered as the off season in Nepal’s tourism. Some travel trade entrepreneurs said that the period can be promoted as monsoon tourism by offering heavy discounts on hotel charges.
Another proposal is to provide an income tax discount for travel trade entrepreneurs who bring in more than 5,000 tourists in 2020. To encourage sports tourism, they have suggested providing special cash grants for firms organising international sports events in Nepal.
In order to promote meetings, incentives, conferences and exhibitions (MICE) tourism, the tourism industry has suggested providing special cash grants to firms bringing 500 tourists at a time into the Kathmandu valley and 300 tourists elsewhere in the country.
During Nepal Tourism Year 2011, the government had provided a grant of Rs500,000 to any organiser holding MICE or interaction programmes involving more than 100 foreign passport holders entering Nepal by air at a time. Likewise, the travel trade entrepreneurs have suggested granting visa fee discounts for at least three days for tourists arriving overland to visit Lumbini.
In order to encourage mountaineering, they have suggested waiving royalty to climb peaks like Gyalzen in Sindhupalchok and Api Saipal in far western Nepal. They have also urged the government to remove entrance fees entirely at national parks and places of historical and religious sites across the country.
Private Sector Wish List
· Implement auto pricing mechanism for aviation fuel.
· Open up restricted areas in northern border regions.
· Waive visa fees to encourage arrivals during the June-August period.
· Income tax discount for operators bringing 5,000 tourists in 2020.
· Provide special cash grants for firms organising international sports events.
· Provide special cash grants for firms bringing 500 tourists at a time inside the Kathmandu Valley and 300 tourists elsewhere in the country.
· Visa fee discounts for at least three days for tourists arriving overland to visit Lumbini.
· Waive royalty to climb peaks like Gyalzen and Api Saipal.
· Remove entrance fees entirely at national parks and places of historical and religious sites across the country.