Bank loans to hotel sector decrease

KATHMANDU, MAR 21:

In the first seven months of the current fiscal year, the growth rate of loans floated by the financial sector to the hotel sector decreased by half as compared to the previous year.

The central bank’s statistics reveal that during the first seven months, total loan percentage was eight per cent, which stood at 16.8 per cent in the same period last year.

According to Hotel Association Nepal (HAN), tourism entrepreneurs are not willing to invest more in the tourism sector as there is no security to their investment. “Hoteliers will not invest if there is no return,” said a HAN official.

Due to low number of bookings in third month of the year too, hotel entrepreneurs are worried that are in for a tough time this year. According to HAN, though March is a tourist season most of the hotels here have showed serious concern regarding falling bookings and reservations.

“We lack special programmes and promotional activities this year and that is why we are not receiving good arrivals even in the tourist season,” claimed tourism entrepreneurs.

In first seven months of 2011-12, total loans floated to the hotel sector was Rs 1850.5 million which has now dropped to Rs 1147.9 million. HAN also expressed its discontent over Nepal Tourism Board (NTB)’s failure to coordinate with the private sector while participating in various international promotional programmes.

However, NTB said fall in the growth rate of loans to the hotel sector does not mean that tourism entrepreneurs are not investing in the hotel sector.

“Tourism entrepreneurs are earning more than what they were earning in the early 2000s,” said director of marketing and planning at NTB Kashi Raj Bhandari. He said the investment and loan amount in 2006 was quite high but by the end of 2007, earnings of tourism sector had increased which has kept tourism entrepreneurs at a safe side and that is why they are making investments on their own instead of taking loans.

Source: THT