Nepal’s tourism earnings fell 18.1 percent in the first four months of the fiscal year due to a sharp drop in the arrivals of international visitors as the acute fuel crisis prompted travellers to defer their planned trips.

According to Nepal Rastra Bank statistics, the earnings for the period between mid-August and mid-November stood at Rs12.89 billion, less by Rs2.90 billion compared to the earnings in the same period last fiscal year. In last fiscal year 2014-15, the country had earned Rs53.42 billion in tourism revenues.

Foreign exchange earnings from tourism come from airport service charges, hotels and travel agencies. Foreign currencies exchanged by money changers are also included in tourism earnings.  

The sharp drop in the revenues has been attributed to the earthquakes in April and May and subsequent India’s trade embargo on Nepal.

The central bank said the tourism sector that remained almost inactive after the

earthquake was further been affected by the prolonged Tarai unrest and highway obstructions.

“In the review period, the occupancy rate of hotels remained very low due to scanty tourist arrivals and their short stay. Road and air traffics have been affected due to severe fuel shortages,” the NRB said. “These developments are likely to act as a headwind to the growth in the service sectors.”

Just after Nepal’s tourism had started to recover from the earthquakes, the political unrest followed by trade embargo, triggering severe fuel crisis, discouraged visitors to travel to Nepal, said Prabesh Aryal, executive director of Hotel Association of Nepal.

Hotels have downsized their menu but have not stopped taking bookings. Despite the fuel crisis, many hotels are preparing foods using firewood in their kitchen.

Although the period between mid-December and mid-January is considered off-season, hotels are not in the position to run, Aryal said. “Even hotel bookings for the first quarter of 2016 does not look encouraging, but the hoteliers are optimistic about the second quarter.”

According to the Finance Ministry, tourist arrivals plunged 46 percent in the first 10 months (January-October) of the fiscal year as a series of disasters pounded Nepal’s tourism sector.

According to a report prepared by the ministry, Nepal lost 352,330 tourists during the review period, hitting foreign exchange earnings and jobs. The country received 300,325 foreign visitors until October, down from 652,655 in the same period last year.

The trade embargo and resulting fuel shortages have forced hotels and restaurants to shut down and cut jobs, with tourists’ length of stay hitting all-time lows. The ministry said tourists were currently staying for less than six days in Nepal. Last year, the average length of stay was 12.44 days.

The average occupancy of hotels plunged below 20 percent in October. Tourist standard hotels had recorded an average occupancy of 90-95 percent in the same period last year.

The Finance Ministry report said employment in hotels and restaurants has plummeted 50 percent.

Another report released by the Tourism Ministry shows nearly 110 hotels and restaurants in Thamel, the main tourist district in Kathmandu, have closed down. The operational hotels too have occupancy rate of below 15 percent.