The Rs 8 billion, 17-storey luxury property promoted by Australian-based Nepali millionaire and owner of the project Shesh Ghale is also one of the largest foreign direct investments in Nepal.

The Sheraton Kathmandu Hotel will be located in Kantipath, adjacent to the office of Keshar Library and opposite the west gate of the Narayanhiti Palace Museum. The hotel, which is due to open in February 2018, is being built by MIT Group Holdings Nepal, a member of the Ghale group of companies which has diverse operations in Australia and other countries. During the ground breaking ceremony, PM Koirala said that the project will have a “huge influence” on the country’s economic development and will also bolster “investor confidence”.

“Indeed, the project demonstrates the beginning of country’s economic development,” he said, adding that such a large investment in the country, despite adverse business environment, will also encourage other investors to follow suit.

He also said that the government was committed to make favorable environment for investors by ensuring long-lasting peace and security in the country.

The new hotel will offer 218 suites and guest rooms, a health club, spa and retail outlets and provide 450 new jobs. It will also feature a 1,000-seat conference hall which will be the biggest hall in Kathmandu, the group claimed.

In addition, there will be two conference rooms, three meeting rooms and a board room. US-based Starwood Hotels and Resort Worldwide Inc, one of the world’s largest hotel companies that owns, operates, franchises and manages hotels and resorts, will manage the hotel under its Sheraton brand.

The Sheraton Kathmandu Hotel marks the re-entry of the Sheraton brand in Nepal. It had earlier managed the Hotel Everest as the Hotel Everest She6raton in the 1980s. It had also managed Gokarna Forest Resort under the Le Meridien brand.

“Coming back to Kathmandu is indeed a pleasure for us and there is a great excitement in the company,” said Dilip Puri, regional vice-president, South Asia, of Starwood Hotels and Resorts. “Nepal is one of the best tourism destinations in the world and Nepal’s tourism has good growth prospects.” On the same occasion, Australian ambassador to Nepal Glenn White said that the project would be a good demonstration for attracting other investments in Nepal.

Meanwhile, Ghale, who is also an incumbent president of the Non-Resident Nepali Association, said that the project, initiated after a five-year long effort, will play a key role in promoting Nepal’s tourism.

“As the country is still reeling under political stalemate, there is a huge risk in investing in Nepal. However, investors are still hoping that the new constitution will bring the country’s situation into the right track and provide a congenial environment for investment,” Ghale said. “We believe that tourism will be the backbone of country’s economy once the country achieves political stability.”

According to the Tourism Ministry statistics, the five-star hotels achieved an average occupancy of 58.85 percent last year, down from 62.76 percent in the previous year. Out of the 678,535 room nights produced last year, only 399,318 were occupied. There are 10 five-star hotels in Nepal, eight of them in Kathmandu and two in Pokhara.