Nepal: Foreign investment in tourism up 389 percent

KATHMANDU, Nepal - Foreign investment commitments in tourism sector have increased by 389 percent over the first five months of current fiscal year.

According to data of Department of Industry (DoI), Rs 1.75 billion worth of investment commitments have been made in tourism sector in the first five months of 2014/15, up from Rs 359.45 million in the same period of 2013/14.

The highest commitment has come from investors from British Virgin Islands (BVI). They have made investment commitment of Rs 900 million for a single project. China, including Hong Kong, has made investment commitment of Rs 518.1 million. While investors from China has made commitment to invest Rs 477.5 million in 20 projects, Hong Kong investors are putting in Rs 40.6 million into two projects.

In the review period, investors from 22 countries have expressed committed to invest in tourism sector. Investors from Australia, Austria, Bangladesh, Denmark, France, India, Italy, Japan, Jordan, Malaysia, New Zealand, Russia, South Korea, Syria, Tajikistan, United Kingdom, Ukraine and the United States have also made investment commitments in tourism sector. They have shown willingness to invest in 50 tourism projects.

Of them one project is of large scale, costing Rs 900 million, seven are of medium scale with investment commitments of Rs 307.4 million, while 42, with combined investment commitments of Rs 551.25 million, are small projects.

These projects have promised to create 1,738 people.

In the first five months of 2013/14, the government had received foreign investment commitments for 23 tourism projects. They had promised 663 new jobs.

According to DoI, investment commitments have mostly come in hotels, casinos and tourism-related adventurous activities.

Recently, Silver Heritage Group of Hong Kong has made investment in Casino Shangri-La which is located on the premises of Hotel Shangri-La.

Binayak Shah, general secretary of Hotel Association of Nepal (HAN), said most of the foreign investment commitments have come in hotels. “Hotels require huge investments compared to other sector in the tourism industry. Many chain hotels are entering into the country. They are bringing huge foreign investment," added Shah.

Tourism entrepreneurs attribute rise in investment commitment in tourism sector to improving political situation in the country, rise in tourist arrivals and the entry of international hotel chains.

"Signing of Project Development Agreement (PDA) with two Indian hydropower developers and Power trade agreement (PTA) between India have relayed message all over the world that Nepal is a safe place to invest. It has encouraged many investors to put their money into Nepal," Shah added.

Jhapa has received the highest investment commitment in tourism (Rs 900 million), followed by Kathmandu with Rs 448.5 million and Lalitpur with Rs 175 million.