Tourism Industry in Nepal [Updated 2024]

Meaning of Tourism Industry:

Tourism is defined as an act of travel of people by any purpose from one place to another place of a country or from one country to another country. The provision made to facilitate tourists such as hotel, lodge, trekking and travel agency, rafting, guide, etc is called Tourism Industry.

Nepal is a tourism centre where people from different countries come to visit. It is providing employment opportunities to many people directly and indirectly. As of 2024, the tourism industry employs approximately 371,140 people, accounting for 11.5% of the total employment in all industries within Nepal​ which contributed approximately 2.7% to the GDP of Nepal (Kathmandu Post)​.

Following the recovery from the COVID-19 pandemic, the government has launched the "Nepal Tourism Decade 2023-2032" initiative to further boost the industry.

People do not like to stay in one place forever. They want to travel or Visit different places from time to time with different objectives. A person who visits a place, away from where s/he usually resides, for pleasure, business, or social reasons is called a tourist. By most accepted definitions, to be classed as a tourist, a person needs to stay at that place or location for longer, than a day (24 hrs), but no longer than one year. The purpose of the visit or travel can be for pilgrimage, holiday pleasure, trekking and mountaineering, business, official convention and conference, or personal reasons, other than to be employed by a resident entity in the country or place visited.

The movement of people to the place outside their usual residence, for the specific period (longer than a day and less than a year)with an objective, is known as tourism. The term ‘tourism' also refers to a business providing services for tourists. The World Tourism Organization (WTO) defines tourism as, "Traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes."

Types of Tourism:

There are different forms of tourism. With the country of reference, there are three forms of tourism which are given below:

1. Domestic tourism: Domestic tourism means visits within a country by visitors who are residents of that country. For example a resident of Kathmandu visiting other parts of Nepal for different purposes such as holidays, business, or personal.

2. Inbound tourism: Inbound refers to 'inward' or 'being received'. Inbound tourism means visits to a country by foreigners or non-resident visitors of that country. For example, a Canadian visiting Nepal is considered inbound tourism from the Nepalese perspective.

3. Outbound tourism: Outbound refers to “outward” or “going out”. Outbound tourism means visits by residents of a country outside that country. For example, when a resident of Nepal visits Canada then it is outbound tourism from Nepalese perspectives.

The tourism Industry refers to all activities related to tourism. In other words, the tourism industry is the collective form of businesses providing services for tourists. The Industrial Enterprise Act, 2020 of Nepal, defined the tourism industry as the industry related to tourism services.

The tourism industry in the context of Nepal includes the services related to tourists' residence; motel, hotel, resort, bar and restaurants; travel agency, tour operator, healing centres, casino, massage, spa; adventure tourism; golf course, polo, pony trekking, trekking, cycling; homestay and eco-tourism, agri-tourism; cultural, religious, conference and sports tourism; fun park, water park, etc.

Importance of Tourism Industry in Nepal:

1. Source of Foreign Exchange Earnings: Tourism Industry is the major source of foreign exchange earnings for Nepal. In 2023 total foreign exchange earnings from tourism were Rs. 70 billion.

2. Employment Generation: The development of the tourism industry creates employment opportunities for people in tourism-related activities.

3. Development of Cottage/Handicraft Industry: The development of handicraft industries depends on the tourism industry. The foreign tourists like and buy handicrafts goods representing Nepalese art and culture. Attracting tourists towards this helps to develop handicraft industries in Nepal.

4. Sources of Public and Private Income: Government receives income from tourists in the form of taxes, fees, and royalties. The tourism industry provides employment opportunities to many people directly or indirectly. Therefore, the level of income of people increases.

5. Cultural Exchange: Tourism Industry helps to exchange the art and culture of Nepal with the rest of the world. The cultural exchange helps to bring change in the lifestyle and traditional thinking.

6. Development of Human Resources: As the tourism industry develops there is a need to produce a large number of trained and skilled manpower for the promotion of the tourism industry.

7. Basis of Economic Development: Tourism development helps to reduce the existing problem of unemployment by promoting employment opportunities. Likewise, it helps to protect and promote national heritage and traditional art and architecture. Hence, the government can properly utilize the tourism industry for economic development.

Present Situation of the Tourism industry in Nepal:

1. Total Number of Tourists Visit using Transportation in 2018 in Nepal

By Air	83.5%
By Land	16.5%

Source: Nepal Tourism Board 2023

2. The Average Length of Stay and Per Day Per Tourist Expenses in Nepal

Particulars	In 2021	In 2022	In 2023
Average Length of Stay	12.5 Days	12.7 Days	13.2 Days
Per Day Per Tourist Expenses	47$	50$	55

Source: Nepal Economic Forum 2023

3. Tourist Arrivals by Purpose of Visit to Nepal

Purpose of Visit	In 2022	In 2023
Entertainment	66%	67%
Trekking and Mountaineering	15%	16%
Pilgrimage	13%	12%
Others	6%	5%

Source: Nepal Tourism Board 2023

4.Top Five Countries with a Large Number of Tourist’s Arrival in 2019 in Nepal

Country	Tourist Arrival
India	25.5%
USA	10.3%
UK	6.1%
China	5.2%
Australia	4.7%

Source: Nepal Tourism Board 2023

5. Foreign Exchange or currency earnings from the tourism sector in Nepal

Headings	In 2022	In 2023
Foreign Exchange Earnings	75800 million	82600 million
Share of GDP	3.2%	3.5
From export	67.5%	68.1%

Source: Nepal Economic Forum 2023

6. Number of Hotels and Beds in Nepal

Year	Star Level Hotels	Beds in Star Level Hotels	Non-Star Tourist Standard Hotels	Beds in Non-Star Tourist Standard Hotels
2022/23	140	14,500	1,180	31,900

Source: Economic Survey 2022/23

7. Number of Tourist Agency and Guides in Nepal

Fiscal Year	Travel Agency	Trekking Agency	Rafting Agency	Transportation	Tour Guide	Trekking Guide
2022	3,700	2,800	85	85	4,300	18,000
2023	3,800	2,900	90	90	4,500	18,524
2024	-	-	-	-	-	-

Source: Nepal Economic Forum 2023

Prospects of the Tourism industry in Nepal:

1. Natural Beauty: Nepal is a country full of natural beauties. Since Nepal is rich in both natural and man-made heritage, it provides an unforgettable experience to every visitor.

2. Historical and Religious Places: Many places in Nepal have historical and religious importance. It attracts tourists from different places of the world.

3. Cultural Diversity: Nepal is a multi-ethnic nation. Each ethnic group has its own language, culture and tradition. This attracts tourists for learning their culture.

4. Climatic Diversity: Nepal has varying topographic altitudes. So, diverse climatic conditions can be found in different parts of the country. Therefore, the tourists coming from any part of the world can have the best climatic suited to them.

5. Trekking in the Mountainous Region: Many people from different parts of the world come for trekking in the mountainous region from where they can enjoy the scenic beauty of the Himalayan region.

6. Less Expenditure: The cost of living in Nepal is cheaper than in other countries. So, the tourists from different countries and status can visit. They can also enjoy and stay for a long duration at a very low cost.

7. Wild Life: In Nepal, there are varieties of wildlife and bird species. Many rare birds and animals are preserved in different national parks. So, the tourists come and enjoy visiting the wildlife resorts and national parks.

Problems of the Tourism industry in Nepal:

1. Lack of Recreation Facilities: Tourists who visit Nepal come for pleasure and enjoyment. But the recreational facilities for the tourists are very limited.

2. Lack of Transportation and Communication Facilities: Most of the tourists come from developed countries to spend their holiday in Nepal. But they cannot spend their time where there are no communication facilities and transportation facility. Therefore, tourists are mostly concentrated in the city and most of the beautiful places have not been explored to them.

3. Lack of Publicity: Though Nepal is an attractive tourist destination, it has not been well-publicized in a foreign country. The institutional arrangement for tourism promotion is very weak.

4. Lack of Good Quality Hotels: There are very few good quality hotels with modern facilities at the tourist spots from the accommodation. So, tourists cannot spend more days in the tourist spots which are far from such facilities.

5. Problem of Pollution: This is the other problem of the tourism sector. Lack of solid waste management, air pollution in major urban centres has become a great challenge to the development of the tourism industry.

6. Lack of Tourism Centres: There are very few tourism centres in Nepal. Due to the lack of tourism centres, the tourists have to face problems. Tourism centres provide the information required for them.

7. Lack of Security: This is one of the major problems in the tourism industry due to existing political disturbances. Crimes are a great restriction to the development of tourism.

Remedial Measures of the Tourism industry problems in Nepal:

1. Development of Transport and Communication: Transport and communication facilities are the basic requirements for developing the tourism industry in Nepal. There should be adequate development of transportation and communication facilities so that these are easily accessible to all the tourist destinations of the country.

2. Publicity: It is very important for the development of tourism. Special attention should be given to the advertisement through various means of media. Both government and private sector should emphasize the publicity.

3. Control Pollution: Government should take proper initiative for pollution control in the urban area. After taking certain measures in controlling pollution, it should be advertised as far as possible.

4. Recreational Arrangement: The provision of adequate recreational arrangement is very important for tourism development. The people related to the tourism sector should initiate to make arrangement of recreational arrangement in different tourism destinations.

5. Effective Tourism Policy: Government should prepare an effective tourism policy so that more tourists can be attracted and their stay in Nepal can be increased.

6. Security: Government should assure that there is plenty of security for tourists in destinations far from city areas.

7. Development of Sufficient Tourism Centres: Tourism Centres should be developed in all possible tourist destinations with sufficient facilities which will help to solve the problems of the tourism industry.