Nepal's Tourism Sector Faces Hurdles: From Airport Capacity to Policy Gaps

Kathmandu. The House of Representatives election is approaching. Political parties are campaigning in every village and neighborhood. In their efforts to present themselves as superior to their competitors, they have been expressing various viewpoints.

In this context, one topic that perhaps no candidate fails to mention is the daily departure of 2,200 to 2,500 Nepalis from the airport. The sentiment of Nepalis is so attached to this number that a few days ago, when CPN-UML Chairman KP Sharma Oli stated that Nepalis go abroad by 'choice,' a large group on social media heavily criticized him.

This was natural—Nepali youth, both male and female, are certainly not going to the hot deserts or war-torn Iraq, Afghanistan, and Ukraine by choice. Nepalis are in a situation where they must risk their lives out of necessity for subsistence.

The solution to ending this compulsion is to create employment with respectable income within Nepal itself, but the most crucial question is where and how to create that employment. The sector that has drawn everyone's attention for this purpose is tourism. Tourism not only creates respectable employment but is also an excellent means of earning foreign currency in an import-oriented economy like Nepal's. Therefore, the development of this sector can maintain a balance between the economy and employment.

While saying this, how to expand the tourism business in Nepal remains the most complex issue.

There are dozens of businesses related to tourism in Nepal. If we consider a person coming to climb the Himalayas in a country full of mountains, they must be connected to at least 5 or 6 businesses. Such a person first arrives in Nepal by plane. After arriving in Nepal, they stay in a hotel. From there, they travel to the relevant destination by some mode of transport. For trekking and mountaineering, they need the support of trekking guides and porters. If they climb a mountain, they also need training and assistance for the ascent.

Nepal's tourism is not limited only to mountain tourism. Religious and cultural tourism, natural and wildlife tourism, as well as other adventure tourism are prevalent in Nepal.

Some people come to see Nepal's jungles, wildlife, and flora. Some come to see places like Pashupatinath, Lumbini, Janakpur, and Muktinath. Some come to observe natural scenery. Besides these, Nepal has the potential to become a tourist destination for organizing conferences, events like weddings, and even sports.

Expansion in these areas will boost both Nepal's economy and employment. The number of operating airlines in Nepal will increase. The number and occupancy of hotels will rise. Travel agencies and transport vehicles will increase. The demand for trekking guides and porters will grow. The scope of rafting, paragliding, bungee jumping, and related sectors will also widen. This will also increase the revenue of all levels of government.

Nepal's greatest strength is that its destinations do not require much promotion like those in other countries. This is because Nepal possesses natural as well as tangible and intangible cultural heritage that the world seeks out. Despite all this, Nepal has not been able to reap the expected benefits.

What are the problems? Why has Nepal's tourism not grown as expected? And why is it not becoming a suitable means of creating employment? What specific agenda should political parties include in their manifestos? We will attempt to cover the views of stakeholders in the relevant sector focusing on these issues here.

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Nepal's Mountain Tourism: Policy Issues and Necessary Steps for Reform

Obstacles in the Tourism Sector and Solutions

• Four Obstacles in the Civil Aviation Sector

The hurdle to tourist arrivals in Nepal begins at the airport. Pratap Jung Pandey, Chairman of the Airlines Operators Association of Nepal, states that the limited capacity of the airport, the small number of national flag carriers, Nepal being placed on the grey list, and the lack of provisions for leasing aircraft have prevented the quality and cost-effectiveness of airline operations in Nepal from improving.

Currently, Nepal has three airports capable of handling international flights. Kathmandu's Tribhuvan International Airport serves nearly ten million passengers annually. Of these, about five million are international passengers, and the rest are domestic.

Currently, about 3,000 people go abroad daily on employment and student visas, meaning nearly 1.1 million Nepalis go abroad annually. The same number also returns to the country.

Besides this, there is also the trend of going abroad on tourist visas. In 2025 alone, a record of over 250,000 Nepalis traveled abroad for leisure. Including business visas, diplomatic visas, sports, medical treatment, and other purposes, the annual number of Nepali travelers on international flights is around 2.8 to 3 million.

In the current situation, Tribhuvan International Airport can accommodate only about 1 to 1.2 million foreign nationals, whereas the number of foreign tourists arriving in Nepal in 2025 was 1,147,000. This means Tribhuvan Airport is currently operating at full capacity. After the upgrade is complete, an increase in passenger capacity by about 20 percent is expected.

Although Pokhara Airport will have the capacity to serve 1 to 1.2 million passengers annually and the international airport 1.8 to 2 million, these airports are not operating effectively. This situation is causing problems in tourist arrivals.

While the airport causes issues, the number of aircraft is another obstacle. Currently, the national flag carrier, Nepal Airlines, has 2 wide-body and 2 narrow-body aircraft. Himalayan Airlines has only 4 narrow-body aircraft. The full capacity of both companies' fleets is 1 million flights, meaning service for 500,000 passengers. This means that about 90 percent of the flights currently taking place must be carried by foreign airlines. Currently, 60 percent of the expenditure made by foreign tourists visiting Nepal is paid only to airline companies. Because of this, Nepal is also losing the opportunity to bring in foreign currency.

Currently, there are no direct flights to Nepal from countries like Europe, America, and Australia. They are compelled to come to Nepal only after taking a transit. Furthermore, because the Nepali airspace is blacklisted, Nepali airlines are not even allowed to fly to Europe. This situation also prevents the inflow of high-spending quality tourists.

The airlines operating in Nepal are also unable to fly according to schedule. When aircraft need regular or emergency maintenance, flights have to be suspended for a long time. In such situations or at other times, although aircraft can be leased from other countries for regular flights, Nepal cannot utilize this facility because it has not made the necessary legal provisions.

Chairman Pandey states that although the Cape Town Convention has opened this matter, Nepal's failure to become a party to it is causing problems. To solve these issues, he emphasizes the need to arrange for the proper operation of airports, add more national flag carrier aircraft, establish provisions for leasing aircraft, and adopt security measures to be removed from the EU's blacklist.

• Challenge of Occupancy Management and Unhealthy Competition in the Hotel Sector

Let's move on to the problems in the hotel sector after airlines. Binayak Shah, President of the Hotel Association Nepal (HAN), states that there are multifaceted problems in the development of the hotel sector, with the bottleneck in tourist arrivals and unhealthy competition being the main causes.

Currently, 1,147,000 tourists have arrived in Nepal, but hotels in Nepal have the capacity to serve 3.5 million people. This means that external tourists currently account for only 30 percent of the service capacity of the hotels. Even with domestic tourists included, the average occupancy is 40-50 percent, meaning a large portion of the capacity remains unused.

Furthermore, Chairman Shah states that unhealthy competition is also creating obstacles. Hotels that have completed all procedures and registered are suffering due to food and accommodation service providers that are either unregistered or outside the tax net.

'The Department of Tourism has currently registered about 300 hotels, while the statistics office reports 142,000 hotels and accommodation service providers,' Shah said. 'They are neither registered nor do they pay taxes to the state. It is necessary to bring such entities under regulatory oversight.'

Besides these, he notes that the lack of transport infrastructure development in the country, leading to travel problems, and procedural issues are preventing the sector from achieving the expected employment and productivity. Consequently, the average spending per tourist has dropped from 48 dollars daily to only 42 dollars, and the average stay has shortened from 14 days to 12 days, according to him.

• Policy Hassles for Travel Agents

Travel agents do not face problems as complex as those in the aviation and hotel sectors. However, Achyut Guragain, former President of the Nepal Association for Travel and Tours Agents (NATTA), states that the government's indifference towards solving the problems seen in the tourism sector and the security of the business community are their main concerns.

According to him, the government has not encouraged foreign tourists to visit Nepal in line with the country's immense tourism potential. He suggests that the government should introduce facilities like visa-free entry to promote foreign tourists.

Guragain also mentioned that the recent bad publicity against tourism entrepreneurs and arrests under various pretexts are creating an atmosphere of fear. He believes that arresting entrepreneurs in the name of 'fake rescue' is wrong. He emphasized the need for a 'one-door policy' as there are still many hassles related to business registration and operation.

Furthermore, Guragain clarified that the impact of development works on tourism businesses must also be considered. He analyzes that the rafting business, in particular, is currently in crisis due to the construction of dams and hydropower projects on Nepal's rivers.

• Obstacles of Protected and Controlled Areas in the Trekking Sector

Apart from the overall problems in the tourism sector, the trekking sector faces some specific difficulties. Narahari Bastola, former President of the Trekking Agencies' Association of Nepal (TAAN), states that trekking and guiding in National Parks, Wildlife Reserves, Conservation Areas, and Controlled Areas are particularly challenging.

Most trekking and tourist areas in Nepal are either within National Parks and Wildlife Reserves or are restricted zones. Areas like the Everest region, Annapurna region, Langtang region, Manang-Mustang, and Dolpa fall under this category. However, in the name of conservation, establishing not only hotels and restaurants but even hospitals in these vast areas is prohibited.

Bastola points out that this causes risks in trekking even now. While the government's initiatives for conservation in tourist areas are positive, he notes that prohibiting even essential facilities in these areas is problematic.

Moreover, Bastola stated that if an accident occurs while trekking in restricted areas, rescue takes a long time. Especially in Mustang and other areas bordering China, obtaining prior permission for flights takes more than a day, making immediate rescue impossible, he said.

In the 1960s, individuals supporting an independent Tibet in the Mustang region were preparing for war against China in the area. The Nepali Army later brought them under control. Although there is no sign of such insurgency now, the provision for restricted areas made under the Tourism Act enacted during that situation has not been removed yet.

Besides these, he shares his experience that excessive decentralization of the tourism sector is also causing regulatory problems. After the implementation of federalism, many subjects were supposed to be transferred to provincial and local levels.

Many of the subjects mentioned in this way have not yet been transferred to the respective levels. However, Bastola states that the tourism sector has been decentralized more than necessary, causing difficulties. He argues that the excessive decentralization must be stopped by immediately reforming the Tourism Act.

• The Demand for a Mountain University Unheard by the Government in Mountaineering

The most important sector of tourism is mountaineering. Nepali mountaineering entrepreneurs are providing services in areas inaccessible even to government agencies. However, they complain that the government has not supported the production of new manpower in this sector.

Fur Gelje Sherpa, President of the Nepal Mountaineering Association, says that the government has never listened to their proposal to establish a mountaineering university in Nepal. He argues that with an unbroken Himalayan range of over 900 kilometers and thousands of high peaks including Sagarmatha, this area could become the world center for mountaineering studies.

However, Sherpa stated that the government, which has already established 18 or 19 universities, is unwilling to advance this university, which has immense potential.

Although the government has opened more than 400 peaks for climbing so far, only a limited number are being climbed. He mentions that the peaks in Karnali and Sudurpaschim regions are still outside this scope. He believes that if skilled manpower can be produced, it will significantly contribute to the development of these areas. However, he regrets that no political party has consulted with them regarding including this issue in their manifesto drafting.