Bank investment in hotels at 8 billion

16th Feb, 2018 | Tourism Mail Crew

KATHMANDU, Feb 16: Banks of Nepal have invested 8 billion rupees in the hotel business between July 2017 and Jan 2018, says NepalĀ  Rastra Bank.

Nepalese investment in the hotel sector has been increasing steadily alongside the major foreign investments. The investment of Nepali hotels in the sector during the same time of the year before was 6 billion rupees, which has increased this year by 15 percent.

Entrepreneurs report that generally, any project has banking investment of 70 percent. General Secretary of the Hotel Association of Nepal, Binayak Shah, says that investment in hotels has been increasing with the expectation of increased foreign tourists in Nepal in coming days.

Shah says that while investors believe the tourism sector to be ripe for investment, the uncertainty of tourist flow and the lack of tourism infrastructure means that there is still a risk in hotel investment.

According to HAN, the hotel sector has already seen an investment of 300 billion rupees. As per the current state of investments, the number of beds in starred hotels is set to increase by 4000 within two years.

According to data from the Rastra Bank, currently there are 67 thousand beds available in Nepal, of which 2450 beds are of tourist standard.

HAN President Amar Man Shakya believes that while increased investment may be a positive aspect, there is still a risk to these investments if adequate infrastructure is not developed by the government. "Big hotels have invested using bank loans. If the government doesn't develop necessary infrastructure including airports and roads, it will be difficult to attract tourists," he said, "the current occupancy of hotels is at 70%, and will the addition of big hotels, competition is bound to increase."

According to the Department of Tourism, there are 11 five-star hotels, 7 four-star hotels, and 11 three-star hotels currently under construction in the country.