The iconic Annapurna Hotel on Durbar Marg, which closed its doors in December 2020 due to a severe revenue loss after the coronavirus snuffed out the tourism industry, has revealed plans for a relaunch—in a new avatar.

Annapurna Square Pvt Ltd, on Thursday, entered into a management contract with ITC Hotels, a prominent name in luxury hospitality in India, to redevelop and operate a new 5-star hotel at the current site of Hotel Annapurna.

According to the company, the proposed Rs8 billion project will be Nepal’s largest hotel, featuring 363 rooms, including 30 service apartments. It will have two towers—24 and 15 stories tall. The hotel will have four conference spaces, a shopping arcade, and an entertainment zone.

“We have planned to launch the hotel on April 13, 2028, the Nepali New Year,” said Min Bahadur Gurung, managing director of Bhat-Bhateni Supermarket and chairman of Annapurna Square Pvt Ltd.

Annapurna Square Pvt Ltd will hold an 85 percent share in the project, with Hotel Del’ Annapurna Pvt Ltd holding the remaining share. The project will generate employment for 1,500 people.

“We are delighted to collaborate with Annapurna Square Pvt Ltd in the redevelopment of Hotel Annapurna. Our theme, The Annapurna: Reviving from a Hotel to an Iconic Destination,’ reflects our commitment to blending heritage, luxury, and modern innovation,” said Shreejana Rana, executive director of Hotel Del’ Annapurna Pvt Ltd.

“Indeed, our plan to construct the largest hotel in Nepal marks a transformative chapter for Nepal’s hospitality sector, enhancing our legacy as one of Kathmandu’s most iconic destinations.”

Started as the Hotel de l’ Annapurna in 1965, the now-defunct 149-room hotel owns 44 ropanis of land (22,385 square metres) in the heart of Kathmandu. After the hotel was closed, the venue became a parking space. Company officials said there are plans to construct three underground parking spaces in the hotel, which has become a good business in space-scarce Kathmandu.

“The re-imagined property will again preserve the rich cultural heritage of the iconic hotel while setting new benchmarks for luxury hospitality in Nepal,” said Rana.

Rana said that despite many upheavals in Nepal’s hospitality industry, they hope it will rise.

Nepal's tourism industry rebounced in 2023, crossing the coveted 1 million visitors mark for the year. This is an important milestone as the country aims to revive the sector following its battering by the Covid-19 pandemic.

However experts say that natural disasters and plane crashes and bus accidents, have deterred the growth prospect.

According to the annual World Travel and Tourism Council research report, Nepal’s tourism sector generated Rs327.9 billion ($2.5 billion) in revenue and supported 1.19 million jobs directly and indirectly last year. The report forecasts that Nepal will generate 1.22 million jobs in 2024.

The jobs generated by the tourism sector are 15.2 percent of the total.

The London-based organisation said travel and tourism’s total contribution to the country’s gross domestic product (GDP) stood at 6.6 percent to Rs358.9 billion or $2.7 billion last year, down from 6.7 percent in 2019 before the start of the Covid pandemic.

Post-Covid, a slew of luxury hotels have opened. Gurung said his entry into the hospitality industry is by choice.

“Together, we will set new standards in luxury hospitality and position Kathmandu as a world-class destination, attracting discerning travellers from around the globe,” said Gurung.

Nepal has a vast potential in tourism. “We have a vast market in India. Yet, we haven’t tapped a tiny fraction of its burgeoning middle class,” he added. “We don’t need to go far to bring tourists. They’re close to us, right there in India.”

India has been Nepal's top tourist source market, with a record 319,936 arrivals from the southern neighbour last year.

Gurung co-founded the Bhat-Bhateni Supermarket, the country’s first and largest retail chain and its most popular marketplace. He said he entered the tourism industry to contribute to the country, given the sector’s huge potential to create jobs.

In 1984, from a lowly grocery store, Gurung turned his visionary leadership and entrepreneurial spirit into a formidable retail business. Gurung's business model is driven by his determination to meet high-quality standards and achieve customer satisfaction.

“I want to achieve the same success in the hospitality industry, too,” said Gurung.

Annapurna Square Pvt Ltd has roped in ITC Hotels, a prominent name in luxury hospitality in India, to manage the hotel. This is ITC Hotels' second international project in Nepal after Fortune Resort & Wellness Spa in Bhaktapur.

In line with ITC Hotel's commitment to ‘responsible luxury’ and sustainability, the new hotel will incorporate eco-friendly practices, from energy-efficient technologies to locally sourced materials.

Refining its presence for a new era, the project is being approached as a historically inspired restoration rather than a redesign, according to Rana.

The project will also prioritise supporting Nepal’s economy by employing local artisans and sourcing Nepali products. Morphogenesis, India, one of the region’s premier architecture firms, has been entrusted with bringing this vision to life.

Renowned for its innovative designs and sustainable approach, Morphogenesis is working to transform the dream of Annapurna Square into a reality, blending modern architectural excellence with the cultural essence of Kathmandu.

Anil Chadha, chief executive of ITC Hotels, said, “We are delighted to work with Annapurna Square to manage this iconic property. ITC Hotels is committed to delivering exceptional guest experiences focusing on sustainability and cultural preservation.”

“Hotel Annapurna has played a significant role in Nepal’s history, and we are excited to help elevate its legacy. Our planet-positive philosophy will ensure that the redeveloped property shall be rooted in the heritage and local ethos of the land.”