Hotels in Pokhara close down as virus wipes out tourismAccording to the Western Region Hotel Association, 70 tourist-standard hotels have shut down completely.
Ram Prasad Bhattarai, operator of Pacific Guest House at Gaurighat, Lakeside, recently handed over the keys to the property to his landlord as he couldn't pay the rent anymore after the pandemic brought tourism to a halt.
Bhattarai had leased the property for five years, but only one year after signing the rental contract, he had to pull down the shutters on June 10
“As business came to a complete standstill, I had a hard time paying the rent and bank instalments,” said Bhattarai. The house owner returned the advance payment Bhattarai had given him.
"I don't know how long this situation will last. I cannot operate the hotel by paying a monthly rent of Rs150,000," said Bhattarai. He had returned to Nepal after working in India for 15 years, and ran a restaurant in Kathmandu for two years.
“I was making a good income from the guest house. But the Covid-19 pandemic dashed all hopes,” he said.
The lake city, which normally receives more than 400,000 tourists annually, had seen arrivals start declining from mid-February.
Bhattarai said his landlord had offered him a 50 percent discount on the rent for two months from March to April. But he demanded full payment after two months, so it was better to pack up.
Bhattarai plans to restart his hotel business in Pokhara once the situation returns to normal.
The hotels on Lakeside have begun to shut down due to the rent and interest burden. Hotel Galaxy, Hotel Paramount and Hotel Travel Inn are all shuttered.
According to the Western Region Hotel Association, 70 tourist-standard hotels have shut down completely. Most of the hotels in Pokhara are in rented buildings. Tourism entrepreneurs are having a hard time after their banks started calling them to pay the monthly instalments.
Bikal Tulachan, president of the association, said that hotels in Pokhara were incurring monthly losses of Rs200-250 million after business evaporated due to the pandemic. "If the situation continues, a number of people will definitely switch to other professions," he said.
Even now, some entrepreneurs are in a wait and watch condition. Not only hotels, other businesses related to tourism too are in the process of closing down.
Tikaram Sapkota, a former member of the Nepal Tourism Board, said more and more businesses were closing down despite the lockdown being eased. There are no customers, particularly tourists on whom the city depends.
It is harder for business owners who operate out of rented spaces, he said. “Covid-19 has hit the tourism sector the hardest, and the impact will be felt for a long time.”
Many investors are under financial and mental stress, he said. "Entrepreneurs are ready to resume operations if the instalment payment deadline is extended, rent is waived and they are exempted from paying direct and indirect taxes," he said.
On Monday, a chef who had lost his job jumped into the Seti River in a bid to commit suicide, exemplifying the level of stress caused by the economic slowdown in Pokhara.
The youth was rescued by locals. "I lost my job in the lockdown, and my family also started putting pressure on me," he said.
Tara Budamagar of Baglung, who lost her hotel job, has started selling snacks and street food.
There are 75,000 workers in the tourism sector in Gandaki province. When the tourism business comes to a standstill, there are high chances of losing jobs. Some workers have started doing other work like Tara.
Sapkota said that the tourism industry normally provides jobs to roughly 75,000 people.
As it will take two years to revive the tourism sector, it is estimated that half of the workers will lose their jobs, he said. Even if tourist arrivals reach 500,000-600,000 in 2021, only half of the current workers will get employment, he said. It is important to think about managing the rest, he said.
According to Hotel Association Nepal, the tourism industry provides 15,000 direct and 20,000 indirect jobs in hotels in Pokhara. The association is preparing health safety guidelines and operation protocols to reopen the hotel industry once the situation returns to near normal.
Even though the lockdown restrictions have been relaxed, nothing is happening in the tourism sector. Entrepreneurs said they had not been able to pay regular instalments and interest to their banks with no business activity.
The Pokhara Tourism Council, an umbrella organisation of tourism entrepreneurs in Pokhara, has been saying that the interest rate should be reduced through rescheduling and capitalisation of loans and refinancing facilities until the situation returns to normal.
Even before the lockdown, the council had met with Prime Minister KP Sharma Oli, the finance and foreign ministers, the central bank governor and other officials in Kathmandu and submitted a memorandum to bail out the hotel industry amid this crisis.
The federal government has announced a Rs100 billion refinancing fund and a Rs50 billion operation fund to operate businesses affected by Covid-19 in the budget statement for the coming fiscal year.
The council has demanded that the use of these funds be fully proportional and simplified.
Chiranjeebi Pokharel, president of the council, said that the money should be distributed in an equitable manner as there is maximum investment in tourism in Gandaki.
"Small and medium-sized entrepreneurs should be given priority to make good use of the refinancing fund," he said.
The council has demanded that arrangements be made to provide easy access to trekking, adventure activities, tourist vehicles and other businesses. He said that banks and financial institutions had been badgering borrowers to pay interest punctually.