Investment in hotels

Nine star-rated and 74 tourist-standard hotels opened in the country between 2010 and 2011 after the government announced the Nepal Tourism Year 2011 (NTY) campaign. According to the Ministry of Tourism and Civil Aviation (MoTCA), the number of star-rated hotels in the country has reached 106 from 97 while the number of tourist-standard hotels rose to 721 from 647. MoTCA officials said that many new hotels and resorts across the country were operating without an appropriate license. Shyam Lal Kakshapati, president of Hotel Association Nepal (HAN), said that improved tourist arrivals since mid-2009 had boosted the confidence of private sector investors. Since 2009, tourist arrivals in the country have been climbing by 20 percent per annum. “The private sector has realized that tourism could be a long-term industry if peace prevails, and this optimism is attracting more investors in the sector,” Kakshapati said.

Although there are 10 five-star hotels in the country, Kakshapati said that more such properties needed to come up, and that it would happen if the government became more flexible regarding its existing policy. As developing five-star properties requires big money, the government should ensure the investment besides amending the existing Labour Act which has been a obstacle to growth of the hotel sector.


Year Star Non-Star
2004 110 886
2005 110 896
2006 105 502
2007 105 512
2008 96 573
2009 97 647
2010 103 686
2011 106 721

(Source: MoTCA)