The Annapurna Conservation Area in the central Nepal Himalaya can be repositioned as a high-end tourism destination with increased investment from the private sector, a new report has shown.

Clinging to the southern slopes of the Annapurna range, it is one of the most scenic places on the planet, and is triply blessed with stunning landscapes, architecture and culture. The 7,629-sq-km protected area encompasses villages, hills, valleys, gorges and lakes with the snowy Annapurnas towering over them, and is spread across the five districts of Manang, Mustang, Kaski, Myagdi and Lamjung.

“Increased private sector investment in the region could bring in more high-spending tourists to help boost the local economy in a post-Covid market,” said the report prepared by International Finance Corporation, the private-sector lending arm of the World Bank Group.

The report entitled "Architectural and Cultural Heritage Tourism Products in Nepal: An Assessment of New Private Sector Investment Opportunities in the Annapurna Conservation Area" examines a huge scope and the opportunities for investors to capitalise on the area.

It hosts the world’s deepest gorge, Kali Gandaki, which is 4.8 km long and 2.4 km wide. Fossils from the Tethys Sea dating back 60 million years have been discovered in the river valley. The region offers the world’s largest rhododendron forests at Ghorepani. Tilicho Lake in Manang, north of the Annapurna massif, is the world’s highest fresh water lake.

The Annapurna Circuit and Annapurna Base Camp trekking routes count among the world's greatest adventure walking trails. Nearly 200,000 foreign tourists throng the Annapurna Conservation Area annually. Biodiversity conservation and local people’s livelihood projects are conducted side by side here.

The Annapurna area has long harboured dreams of becoming a high-end tourism destination, but lacks investment and marketing efforts, the only way to attract a new breed of high-end clientele, said the report.

The Annapurna area was opened to foreign trekkers in 1977.

On June 3, 1950, Frenchmen Maurice Herzog and Louis Lachenal became the first climbers to summit the forbidding Himalayan peak Annapurna I. This triumph, an unimaginable struggle against hardship, was completed without supplemental oxygen, and would mark the first of the world’s 14 8,000-metre peaks to be climbed.

Herzog wrote a book called Annapurna about mountaineering which was published in 1952. More than 11 million copies were sold (till 2000) making it one of the best-selling books in the history of mountaineering.

This book has been regarded as a milestone for the development of mountaineering tourism in Nepal.

The original trek of the Annapurna Circuit started from the market town of Dumre on the Kathmandu-Pokhara highway and ended in Pokhara, and took about 23 days to complete. After the construction of roads, the original 23-day walk has now been cut to only five days.

“Obviously, it took Nepal more than four decades to establish the Annapurna Circuit, but when the time came to reap the benefits, we destroyed it,” Dhananjaya Regmi, chief executive officer of the Nepal Tourism Board, told the Post.

“This was the biggest mistake we made in Nepal’s tourism history. But still, we can capitalise on the vast potential of the Annapurna area,” Regmi, who is also an eminent environmentalist, added.

With no proper infrastructure and unhealthy business flourishing in the Annapurna area, the average daily spending of tourists is $39 per night, according to the report.

“That’s all because the road has reached everywhere. Now money goes to the limited hotels in the area, not to the locals. Now tourists can trek the area within a week compared to three weeks previously; and accordingly, their spending has come down to a week,” said Regmi.

A recent study found that hotels in the Annapurna area, on average, have a 38 percent occupancy rate, and charge around $10 a night for room and board.

The Annapurna Conservation Area is one of the most scenic places on the planet, but the problem is that trekkers often manipulate locally-owned and operated hotels and lodges to obtain free or dirt-cheap accommodation, said the International Finance Corporation report.

“No accommodation should be charging less than $20 a bed, let alone give it away for free.”

A member of the International Finance Corporation who prepared the report said, “In our interviews, we noticed a sense of fear from local operators that if they did not make their accommodations free, they would lose business.”

He added, “This is not true because any tourist travelling from Europe, Australia or North America is spending from $1,000 to $2,000 on air fare and would not have a problem paying $20 for a night’s accommodation. For the Annapurna Circuit to regain its former standing as a quality destination, free or very low-cost accommodations should be abolished.”

Higher-value accommodations produce a higher number of jobs per room.

An increase in the quality of accommodations will generate the need for trained people to staff kitchens, front offices, housekeeping and coffee shops. Ensuring that local people have the training required to work in these hotels will be important to benefit the communities, the report said.

“Our proposal is that the street parallel and closest to the Kali Gandaki River, which has several abandoned buildings, be converted into an Albergo Diffuso Boutique Hotel,” according to the report.

Albergo Diffuso, an innovative concept of hospitality, was launched in Italy in the early 1980s as a means of reviving small, historic Italian villages and town centres off the usual tourist track. It is a concept of refurbishing dilapidated and abandoned homes to convert them into hotel rooms and suites.

“This proposal would of course require buy-in from residents living on this street, local village members, and the local authority. Each group of scattered hotels can be complemented with a restaurant, café and wellness facilities,” said the report.

The report says the area could attract higher-value tourists who could spend about 20 percent more if there was greater action to boost accommodation. While there are over 1,000 hotels, lodges and tea shops, these cater to low-budget travellers.

In order to appeal to higher-value tourists, the report lays out four potential investment concepts: converting old, abandoned houses in a street in Tukuche village into boutique hotels; redeveloping an abandoned, heritage house in Jharkot into a boutique luxury hotel; establishing a network of lodges along the Seven-Passes trail in Manang; and setting up a coffee shop franchise in Lower Mustang and Manang.

While pilgrimage tourism is on the rise, this segment is also characterised by short stays; and these tourists, therefore, rarely stop overnight in the small towns and villages between Besisahar and Muktinath.

“High spending tourists are willing to pay premium prices for comfortable accommodation in the Himalayan region, as has been the case in Bhutan,” said International Finance Corporation’s Resident Representative in Nepal Babacar S Faye.

“In view of the gigantic losses that Nepal’s tourism industry has suffered due to the pandemic, it should create a new roadmap to align with the new market reality. It has the opportunity to attract more high-end tourists, a move that will impact the supply chain, and have positive ripple effects on the country’s economy.”

Tourism in Nepal has been the hardest hit sector by Covid-19 impacts. An estimated 230,000 jobs are at risk, 20,000 tour and trekking guides unemployed, and 2,600 trekking agencies closed, amounting to a loss of around $460 million to the country’s gross domestic product, the report said.