Text by Sajeet M. Rajbhandari
The tourism industry is undoubtedly one of the most significant economic contributors to both global and national economies. Development in infrastructure and better diplomatic ties with foreign nations have proved to be key factors in building the tourism industry in Nepal. Over the past two decades there has been a steady incline in both visitors who arrive to Nepal for recreational as well as occupational purposes. The fact that popular travel websites have included Kathmandu in top tiers of places worth visiting shows that Nepal does manage to catch the interest of foreign tourists. Not only does the tourism industry contribute to over 5% of the national GDP but furthermore, the policymakers are trying increase to these numbers through ambitious projects such as the ‘Visit Nepal 2020’ which intends to bringing over two million foreign tourists to Nepal in a year.
While tourism is often portrayed as an irreplaceable resource for Nepal, it is a resource that hasn’t been realised to its fullest potential. The tourism industry contributes a sizeable chunk to the national GDP and creates around 6.7% of all employment opportunities in Nepal, yet falls way behind in terms of the number of foreign visitors with only 1.2 million tourists arriving annually.
Chinese travelers, statistically, are the second largest group of tourists arriving in Nepal; a close second to Indian travelers who are positioned at the top of the list. As per government target, 400,000 Chinese tourists are expected during Visit Nepal Year 2020. This can be viewed as a modest target for the government to fulfill as the growth rate for Chinese tourists is 20-30% annually. However, the real issue for the tourism industry lies in increasing the amount of foreign capital that it is able to bring into the Nepali economy.
National statistics state that even though the number of tourists visiting Nepal has increased, the length of their average stay has dropped to 12.4 days in 2018-19 from 13.4 days in fiscal 2016-17. Even the per day spending of tourists has dropped to $44 in 2018-19 from $54 in 2017-18, failing to reach the government target of $60 in 2018-19.
So, what do we need to understand about Chinese travelers? Nepal received 153,602 Chinese tourists in 2018, up 46.8% compared to 2017. These numbers are clearly indicative of the growth of Chinese tourists arriving in Nepal. Understanding the way Chinese tourists operate can be crucial to the economy. According to Kumarendra Shrestha, a veteran Mandarin speaking tourist guide, the scene for Chinese tourists in Nepal has indeed gone through considerable changes over the three decades that he has worked as a guide. “When I first started as a Mandarin speaking guide, there were only a few mainland Chinese tourists. My clients would normally be Taiwanese or Singaporean, and Malaysian Chinese,” shares Shrestha. He however goes on to elaborate that as the Chinese economy started to boom so did the number of Chinese travelers, not just to Nepal but in other parts of the globe as well. “The influx of Chinese tourists to Nepal started scaling up around 2006-07 when Nepal opened up to Chinese travelers and made it easier for them to get visa on arrival,” tells Shrestha. Today, a Chinese national can get a tourist visa on arrival to Nepal for free.
According to Shrestha, Chinese often travel in large groups, usually consisting of around 20-26 people and rarely dropping below 16. However, there are the occasional individual tourists as well. With people in their 30’s being the most common age group, Shrestha shares that Chinese are attracted by the culture and heritage of Nepal. Places like the Durbar Squares in the Kathmandu Valley and activities such as trekking in Pokhara and elephant tours in Chitwan are the most sought after. Typically visiting for a week, some tourists also spend up to 10-12 days during trekking season, as per Shrestha. He also adds that the Chinese are friendly and genuinely enjoy experiencing Nepali culture and often like to purchase local items such as Nepali arts and handicrafts, Kashmiri shawls and pashminas and jewelry.
Kelsang Choedrun, a Chinese transfer student at Kathmandu University, shares her passion for Nepali culture, “I enjoyed visiting Patan Durbar and Boudha. I am also planning to visit Pokhara and Lumbini during the Dashain holidays.”
There are however numerous issues that come up when one looks at the situation of Chinese tourists in Nepal. Shrestha complains, “The Nepali government has not been able to handle Chinese tourists properly. There are three M’s that tourism requires: manpower, money and management. While Nepal has manpower and money, it strongly lacks in the management front.” Shrestha recounts numerous instances where tourists get discouraged to travel inside Nepal due to the lack of physical infrastructure such as highways and airports. While financially well off travelers can afford to fly to most locations, middle and working class tourists who need to use buses and highways are often disheartened by the slow journey and the lack of proper amenities like decent bathrooms and food stops along the way. As Shrestha rightly points out that there is no point in having breath taking places if a tourist can’t get there.
An issue that has stirred much debate with regard to Chinese tourists is the increase in Chinese businesses and the use of Chinese e-payment services in Nepal. Popular tourist locations such as Jyatha is saturated with Chinese businesses that operate through Chinese e-payment services such as Alipay and WeChat. This not only puts Nepal out of the cash flow equation but also drives away local businesses. With over a billion users for WeChat and 700 million for Alipay, these e-payment companies dominate the Chinese economy and also businesses run by Chinese immigrants in Nepal. Since a large chunk of businesses are run by Non-Resident Chinese, many accept payment through services like WeChat and Alipay, both of which are not registered with the Nepal Rastra Bank. So, while Nepal did receive 153,602 Chinese tourists in 2018, which is 46.8% higher when compared to the numbers in 2017, this growth is likely to be less fruitful if what these tourists spend in Nepal never enters the country. Money can only create economic impact if it is passed around in the domestic economy instead of having a product/service used in Nepal and paid for in a foreign economy.
While the use of these services has been prohibited by policymakers, there hasn’t been any requests made to telecoms and ISPs to block transactions from these sources. Both WeChat and Alipay have in fact submitted proposals to the Nepal Rastra Bank for permission to operate in Nepal.
According to Bom Bahadur Mishra, Executive Director of Nepal Rastra Bank, while nothing is finalised yet, talks have been going on with Alipay and WeChat to make them commercially available in Nepal. Mishra emphasises that it the process of transaction that has been deemed illegal and not the companies itself. The use of these services doesn’t necessarily have to be bad news for the Nepali economy either. With such a huge user base in China, if these services are made available in a way that they can be taxed, more likely Chinese tourists are to spend more money in Nepal and that leaves room for Nepali businesses to enjoy better growth.
Zhang Shijia, another Chinese transfer student at Kathmandu University, shares that she finds herself more likely to visit shops and restaurants that communicate in Mandarin and accept payment through WeChat. Shijia says, “Using services like China Union Pay isn’t really convenient and I usually resort to using cash. It would a lot easier if WeChat could be used here.”
While tourism still has a long way to go to reach its optimum capacity, the Chinese tourist demographic has time and again demonstrated itself as a crucial part of the Nepali tourist economy; ignoring such a significant resource is nothing short of foolishness.