Five-star hotels record robust growth

The business of hospitality companies listed on the Nepal Stock Exchange (Nepse), which has slowed down due to the Covid-19 pandemic, has bounced back strongly in the last fiscal year. The last quarter report of six hospitality companies listed in the Nepal Stock Exchange (Nepse) shows star hotels' revenue as well as profit, both increased in 2022/23.

With the Covid-19 pandemic slowing down, tourist arrivals in Nepal hit a three-year high in 2022 as the country welcomed 614,148 foreign visitors. The number of foreign visitors entering Nepal grew by 306.82 percent in 2022, putting an end to a two-year downward spiral that started in early 2020 when the coronavirus outbreak wreaked havoc across the world.

Along with the growth in the arrival of foreign tourists, the five-star hotels saw their business booming due to the surge in social events, and conventions. As of now, there are six hospitality companies listed in the Nepse, of which four are five-star hotels. Soaltee Hotel Limited, Taragaun Regency Hotels Ltd, Oriental Hotel Ltd, City Hotels Ltd, Chandragiri Hills Ltd, and Kalinchowk Darshan Ltd are listed in the Nepse.

Soaltee Hotel Limited posted a profit of 545.15m in the last fiscal year compared to a profit of Rs 297.24m in 2021/22. The country’s oldest five-star properties, Soaltee Hotel saw a 64.28 percent growth in its business in the last fiscal year. The hotel’s revenue rose to Rs 2.24bn in 2022/23 from Rs 1.36bn in 2021/22.

Orients Hotel Ltd which runs a five-star property Radisson recorded a profit of Rs 178.43m in FY 2022/23 compared to a loss of Rs 24.6m in 2021/22. Oriental Hotel also had robust revenue growth. The hotel’s income grew to Rs 1.09bn in 2022/23 from Rs 570.24m in 2021/22.

Taragaon Regency Hotels Limited, which operates the Hyatt Regency Hotel has done a profit of Rs 382.64m in 2022/23 compared to a profit of Rs 190.55m in 2021/22. Taragaon Regency Hotel’s revenue jumped by 99 percent in the last fiscal year as it recorded a business of Rs 1.38bn from Rs 692.62m in 2021/22.

Similarly, Chandragiri Hills, which operates a cable car and a five-star luxury resort in Kathmandu, has recorded a profit of Rs 151.16m in FY 2022/23 compared to a profit of 16.86m in 2021/22. Kalinchowk Darshan Ltd has made a profit of Rs 31.9m in the last fiscal year compared to a profit of Rs 14.84m in 2021/22.

However, City Hotel Ltd which runs Hyatt Place Hotel in Kathmandu recorded a loss of Rs 273.63m in 2022/23 compared to a loss of Rs 44.68m in FY 2021/22.

Chandragiri Hills General Manager (GM) Sanjeev Thapa said that the tourism business is increasing due to the healthy growth in tourist arrivals. “After the Covid-19 pandemic, the movement of local and foreign tourists is increasing in Nepal. As there have been no such ups and downs in the international market, foreign tourists’ arrival is also improving,” he said.

According to Thapa, Chandragiri Hills has been operating its cable car till 9.30 pm to facilitate tourists who want to experience the night view of Kathmandu “In addition to this, special packages have also been introduced which has helped the business flourish,” said Thapa.

With the easing of travel restrictions and China reponing outbound travel for its citizens, Nepali tourism entrepreneurs are pinning high hopes for 2023.

The number of tourist arrivals in the country has reached 534,207 in the first seven months of 2023. The tourist arrival has surged by 87.2 percent in the first seven months of 2023 compared to the same period in 2022.

While tourist arrivals have improved significantly compared to the last three years, the number is yet to touch the pre-Covid level. Nepal received 632,469 tourists in the first seven months of 2019. The arrival of foreigners in the first seven months of 2023 is 84.46 percent compared to the same period in 2019.

While the hotel sector is getting more visitors, their spending as well as average stay in Nepal has plummeted to a three-year low. According to the ‘Nepal Tourism Statistics-2022’ published by the Ministry of Culture, Tourism, and Civil Aviation, the average stay of tourists has dropped to 13.1 days in 2022. The average length of stay in 2021 was 15.5 days, a ten-year high. With tourists shortening their stay in Nepal, their spending too declined in 2022. The average daily spending of tourists declined to $40 per day, down from $48 per day in 2021.