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1.1 Introduction
1.2 Historical background of tourism
1.3 Scope of tourism in Nepal
1.4 Meaning and objective of tourism
1.5 Problems and prospects of tourism in Nepal
1.6 Expansion and diversification of tourist attraction
1.7 Objectives of the fieldwork
1.8 Limitation of study
1.9 Need of study
1.10 Method of data collection and processing

2.1 Concept of tourism
2.2 Nature of tourism
2.3 Types of tourism
2.4 Importance of tourism

3.1 Tourism development using various plan period
3.2 New tourism policy 1995 & its objectives
3.2.1 Basic Policy
3.2.2 Policy Strategies
3.3 Classification of tourism industries
3.4 Manpower development
3.5 Facilities and incentives to the tourism industry & business
3.6 Existing tourism institution
Public sector & private sector institution

4.1 Tourist arrival trend in Nepal
4.2 Tourist arrival by purpose of visit
4.3 Tourist arrival by the mode of transport of airlines
4.4 Tourist arrival by nationality
4.5 Impact of tourism in Nepal
Foreign exchange earning & employment generation

5.1 Summary
5.2 Findings




List of table
Tourist arrivals (1962-2004)
Tourist arrivals by month (2003 vs. 2004)
Tourist arrivals by Age Group & Sex (2003 vs. 2004)
Tourist arrivals by purpose of visit
Tourist arrivals by mode of transport (2003 vs. 2004)
Tourist arrivals by nationality (2003 vs. 2004)
Foreign exchange earning from tourism (2002 - 2004)
Employment generation

List of Diagram
Tourist arrivals (1990-2004)
Tourist arrivals of month (2003 vs. 2004)
Tourist arrivals by Age group & Sex (2003 vs. 2004)
Tourist arrivals by nationality in 2004
Employment earning from tourism (trend)
Employment generation
Chapter I



epal is one of the small but richest countries in the world in the in term of bio-
diversity due to its unique geographical position and altitude variation. It is one of the
world's best places to explore as religious, culture and natural resources. Because of
the presence of fine blend of art, culture and tradition along with natural beauty, with
varieties of beauty and pleasure to offer, Nepal has a great potential to attract all
types of tourist from all over the world. The main attraction of the tourist due to
having following ingredients:

12 Nepal's natural attraction.

13 Resulting from physical, historical and cultural monuments and temples.
14 Art treasure and festivals and its wildlife.
15 Himalayas and their scenic beauties are also the prominent attraction to the
16 The land of yeti and land of Buddha.
17 Peaked mountain river and lakes conductive climate and mysterious charm.

Tourism is multifarious industry, which promotes cottage industries, trade and other
series sector. It is the second largest sources of foreign exchange earning. The total
percentage change of tourist arrivals from FY 2002/03 has increased by 22.7% and
the foreign exchange earnings during the FY 2002/03 increased by 80.5%.

In 2002 the total number of tourists visiting Nepal reached 275463. Tourism has not
been long. Since Nepal was opened to foreign tourist. But the tourist inflow rate of
Nepal has been increasing day by day. According to the propose of visit, in 2002,
110143 tourist visit Nepal for holiday pleasure, 59279 for trekking and
mountaineering, 16990 for business, 12366 for pilgrimage, 17783 for official and
58907 for others.
Considering the growing importance of tourist; government had formed different plan
and policies and an implementation strategy provides, different facilities and
incentives to develop the tourism sector. Besides these the institutional arrangement
like tourism council, ministry of tourism and civil aviation, department of tourism and
tourism development board have been created for its development.
"Visit Nepal Year 1998" was one of the major steps by government in other to identify
Nepal as one of the special tourist destination in the world. The main objectives of
"Visit Nepal Year 1998" were to inflow of tourist to 5 million; attract quality tourists
and increasing their expenditure. According to the government version the "Visit
Nepal Year 1998" was successful in attracting more tourists. Similarly the declaration
of "2007" as the "destinations Nepal year" is aimed to attract more tourists in coming


Tourism is a human activity, which has proved important for all nations since it
fosters international brotherhood and understanding. In Nepal, the modern concept
of tourism is a recent phenomenon. Although the inflow of Visitors for different
purpose was there for very early periods, the study of the inflow of foreign visitors to
Nepal can be classified in the following three stages.


Before the unification of Nepal by late king Prithivi Narayan Shah, tourism was closely
related to religion, polities and business. Many visitors, namely from the neighboring
countries of China, India and Tibet visited Nepal for religious purpose. Among are
notable persons. But "Manjushree" is the first visitors in Nepal to make the valley fit
or human habitation either India or China. During the time of Lichhavi rulers the
famous Chinese traveler Huich-Tsang and also Chinese envoy, Li-Y-Pio and Wang
Hiuentse visited Nepal with his companions.


After the unification of Nepal, visitors from Britain came to Nepal for political purpose.
Among the Knox, Hamilton and captain Kirkpatrick were notable persons. During the
region was vertically closed for outsiders, especially Europeans in other to preserve
unity and independence.
1.2.3 TOURISM AFTER 1950
1846: One of the important dates in Nepal's history: it marked the advent of the
"RANA" regime that lasted until 1950; 104 years during which the successive Kings of
Nepal, although formally remaining on their throne with all the external decorum
were in fact relegated to purely nominal and honorific role, deprived of all power and
authority. During that period, Nepal was a forbidden land for foreigners except for the
small traders and Indian pilgrims. Outsiders were locked upon with an eye of
suspicion, an account of close relationship with the British in India, only a few
foreigners changed to visit Nepal. From time to time several distinguished botanists
and naturalists including Sir Brian Hodgson, F.R.S. (who was resident from 1822-
1843) and Sir Joseph Hooker F.R.S. who had made botanical surveys and collection of
Nepal's flora and fauna, traveled the country. Among the European visitors, British
King George v Prince of Wales came to Nepal for the purpose of hunting tigers in
tarai forest in 1911 and 1921 respectively. Due to the deliberately conservative
policy of Rana rulers, Nepal remained virtually isolated and unknown to the outside

From the point of view of tourism the great revolution of 1951 was a boon for Nepal.
In the realization of this fact, Nepal obtained the membership of international union
of official travel organization in 1959 and pacific area travel association in 1964. Even
Nepal its door since 1951, promotion of 1960's. After consideration the great
importance of tourism. Development of tourism was established to make organized
efforts at the government level for the development of tourism. A tourism centre was
established to provide training facilities for tourism development. Tourism act was
promulgated in 1964 because of the increasing number tourist and importance.
Ministry of incentives to the tourism industry and business, industrial enterprises act
and foreign investment and technology transfer act 1992 was promulgated in Nepal
gazette by HMG.

In present contest, the government and private sector jointly trying to develop the
infrastructure for the tourism, Nepal tourism board was established. Many
international chains of hotels were organized, which represent "Nepal as world of its


In Nepal, tourism is not only important economic sources of foreign currency but also
a major employment generator. By the medium of tourism people, can exchange
knowledge. And create understanding among the people of the world. Tourism
provided us an opportunity to understand society, habits, food and the way of life
style of different nations. Directly and indirectly Nepalese people are getting benefits
from the tourism, many people are getting employment from this sector. Because of
the demands of local products, incentives to the local crafts and industries and
artistic skills of the people is increased. Flock-lore, traditional ceremonies, art and
industry are reviewed because tourists are interested in them. Socially culturally,
Tourism is product, which encourages intellectual curiosity among people and nations
and develops a healthy respect for another's beliefs and custom.


The directory meaning of the word Tourism is "organizing touring or other services
for tourists". Generally, tourism is to travel abroad from country to country with a
view to sightseeing, trekking, mountaineering, enjoying scenic beauty, studying
cultural heritage etc. All enterprises that are connected with and facilities traveling
constitute the tourism industry.

At one time tourism was concerned to travel related jobs only. Mass
competition developed the cut throat competitions and developed the concept of
"survival of the fittest", new idea and destinations, exploring virgin landscape,
providing but quality service and accommodation at best prices. The technique of
managing all these aspects of travel related job is known as "Tourism".

In conclusion, "Tourism is all activities undertaken by people staying away

from home for 24 hours or more, on holiday, visiting friends or relatives, at business
or other conferences or any peoples other than for i.e. boarding education and semi
permanent employment. It doesn’t include day trippers from a home address either
outside the country or with in.


Nepalese Economics by Prof. A. M. Shrestha

Tourism Policy 2052

18 To established Nepal as a prime destination in the tourism market through

effective publicity and promotion.

19 To established backward and forward linkage of tourism sector with the

national economy so as to develop it an important sector for the overall
economic development.

20 To enhance employment opportunities, income generation and foreign

currency earning from the tourism sector and internal these benefits down to
the village level.


In spite of tremendous importance and various efforts, Nepal does not seem to have
been able to attain desired result in tourism development rapidly on the account of
the following problems.

21 Limited tourist spots which are also not very much developed.
22 Shortage of necessary infrastructures for proper development of existing as
well as feasible tourists places.
23 Basic requirements needs for the development of tourism are still inadequate.
24 Problem of overcrowding and environment pollution, which is hampering the
tourism in Nepal.
25 World heritage sites are not properly maintained incase of culture tourism.
26 Lack of appropriate programs to inspire tourist to stay longer in Nepal an
spend higher expenditure.
27 Limited internal air services which are also not up to the required standard.
28 Problems in adventure tourism, in terms of the development of the new
trekking routes and tourism spots.
29 Lack of personnel security.
30 Lack of clear-cut and comprehensive national tourism policy.
31 Lack of attention paid by HMG to maintain standard in tourism industry.
32 Government steps towards individual are still unsatisfactory.
33 Limited marketing budget for the development of tourism.
Nepal is probably one of the most fascinating and beautiful countries in the world.
Tourists visited Nepal to experience the world's famous Himalayan peaks; unique
architecture reserved in ancient towns and the warm welcome of ever smiling
people. It posses numerous possibilities of developing tourist traffic because three
are in the country unique geographical features and cultural charms. The main
features of touristy possibilities in the country may be outlined under following

34 Because of unique situation on the southern sight of the mighty Himalayan of

mountain, there are numerous scenic beauties in various sector of the
country; there are snow capped mountain peaks with grand glaciers sliding
down through narrow valleys. Some parts are bare rocky ranges with splendid
landscape, some parts are forested ranges with charming scenery, some parts
are spotted with pleasant lakes, springs and falls, some parts are curved by
several winding rivers and river let's jumping down through steep mountain
valley and in various mountainous parts of Nepal.

35 The main important tourist centers are Kathmandu, Patan, Bhaktapur, Kirtipur,
Pokhara, Lumbini, Manang, Jomsom, Dhulikhel, Helambu, Gosainkunda,
Nagarkot and so on.

36 These are many famous temples, stupas, holy centers and durbar squares in
various zone of Nepal. Among them kumari temple is one of the famous living
goddess's temple. The temple of Kathmandu valley is of great religious and
cultural importance because their walls, windows, and doors have been so
carved and painted as to present various arts culture and beliefs of the
ancient people in Nepal. There are also; laces of early kings in which are
manifested several culture and architecture glories of ancient Nepal.

37 Furthermore, Nepal is a country where land route follower tourist feels

tremendous relief to be here and find peaceful surrounding and good
environment. Perhaps, it may be due to friendly Nepalese people and
hospitable by nature, the tourist will have no difficulty in adjusting in general.
These all are great attraction to tourist.
38 The tourism industry will be identified as a priority sector and the investment
will be mobilized accordingly.
39 Emphasis will be given to produce local goods and handicrafts for tourist
40 Eco tourism, medical tourism conference and convention tourism, cultural
tourism, festival tourism, scientific tourism, village tourism, adventure
tourism, holiday tourism, sports tourism and other value based tourism
activities will be performed.

41 The participation of local government bodies, municipalities, vpcs and NGOS

will be sought to conserve and develop religious, cultural and historical
heritage sites in the Kathmandu valley and outside.
42 Tourism product goods and services will be categorized and quality standards
specified for each category.
43 A number of feasible activities such as hot air ballooning, hot spring, honey
hunting, bird watching, anthropological tours, rhododendrons tours and so on
will be encouraged.
44 Comparing sites and other facilities on the trails will be maintained and
conserved and the private sector encourages setting involved in operation.
NGO's and local communities will be mobilized to mobilize to monitor
activities in the newly operated trekking trails.
45 Duty free shopping and casino activities will be allowed to operate with proper
safeguards. Tours will be promoted cultural, archaeological, historical areas as
well as parks, museum and zoos.
46 Rivers will be kept free from pollution for rafting purpose. Environment impact
assignment will be made a part and parcel for the operation of tourism
activities in conserved areas and their vicinities.
47 Guidelines and performance standards will be developed in collaboration with
the private sector to encourage the quality and efficiency of the hotel and
tourism industry.
48 Incentives holidays and facilities will be tried to promote domestic tourism in
corporation with the private sector.
49 A fixed percentage of foreign currency earned from the tourism industry will
be allowed for discretionary expenditure by the industry.
50 The tourism industry will be identified as a priority sector and the investment
will be mobilized accordingly.
Every activity is performed with certain objective, which has to be achieved on these
premises. Similarly, this fieldwork study has also some objectives, which are as
51 To highlight upon the tourism development and its aspect in the context of
52 To assess the tourism market in Nepal.
53 To identify and analyzed the major problem of tourism development in Nepal.
54 To evaluate the tourist inflow in Nepal and income generated through them.
55 To assess the impact of tourism in Nepalese economy.
56 To provide specific suggestion for improvement of tourism development in
57 To evaluate the plans, programs, facilities and incentives developed by
government and concerned tourism authority.


58 The study mainly concentration on tourist arrivals and its effect in foreign
exchange earning.
59 The study on development of tourism uses the trend of 10 years, 5 years and
4 years only.
60 The study in same causes suffered from the lack of relevant data as sought on
classified as region wide basis.
61 Most of the data are of secondary type. Which is available from Nepal tourism
board, immigration and other sources of books.
62 If focuses only on some major factor of tourism related sector therefore
overall. Position of development of tourism in Nepal can't be judged by this


63 The development of tourism helps to those people who are unknown about
the tourism and its development in Nepal by providing required information.
64 Teachers and students also may obtain a lot of information's regarding
development of tourism account for proper study about it.
65 In the context of modern economy of Nepal tourism business can play a vital
role the employment generation.
66 Government can obtained the required information through it in other to
amend and improve the rules and regulation of tourism to meet the
requirement of the country.


67 Some necessary interviews and observation have made under primary
68 For the proper analysis of the study, available books, reports, tourist arrivals
statistics of Nepal tourism board, annual report and other publications of
Nepal tourism board have been consulted under secondary sources.
69 The collected data are re-arranged and tabulated where necessary to
facilitate the purpose of the study.
70 The hypothesis is tested by those analyzed data and information.
71 For analyzing and interpreting of data different tools such as the financial
tools and statistical requirement.
Chapter II



he word "tourism" so popular today is derived from of the French word Tourism that
originated in the 19th century. Tourism means journey from place to place for
pleasure. Tourism has been defined in various ways. Some authors describe tourism
as a system consists of four interrelated parts-market, travel, destination and
marketing. In general Webster's new international directory defines tourism is
"Traveling for recreation."

According to Edmend Picard, professor of economics at university of Brussels, "The

function of tourism is to import currency from foreign resources into the country. Its
impact is what tourist expenditure can do to the different sector of the economy and
in particular the hotelkeepers".

In 1981, according to international association of scientific exports on tourism (IASET)

and tourism society Cardiff "Tourism may be defined in term of particular activities
selected by choice and under taken outside the home environment. Tourism may or
not involve overnight stay away from home".

Similarly, base on tourism statistical report 1965 of Nepal "The citizens of al the
foreign countries, expect India visiting the kingdom of Nepal for at lest 24 hours in
the pursuit tourists interests such as recreation, health, study, religion pilgrimage,
sports, visit to friends and relatives, meeting and conference, trekking and
mountaineering, short delegation and mission, excluding the person on any
remunerative job and representative of staff or organization permanently located in
Nepal". This definition is based on the decision made by the international union of
official travel organization (IUOTO) at Rome in 1968. At present however, Indian
visitors are also considered to be tourists.

The travel and stay attributes of tourism are defined by the demand for the provision
of a wide range of goods and services. In term of the tourist destination these can be
grouped into five board sectors.

72 Attraction
73 Transport
74 Accommodation
75 Supporting facilities and,
76 Infrastructure

The attraction help to encourage the tourists to visit the country, transport service
enable them to do so, the accommodation and supporting facilities (e.g. shops,
restaurants, travel insurance, sports, banks and travel goods etc) cater for their well
being, while infrastructure assures the essential functioning of all of these.


Tourism is a service industry. It represents one of the world's largest industries with
nearly 700 million estimated international visitors arrivals in the year 2000. While a
total of 25.5 million international tourist arrivals were recorded in the year 1950, their
volume has increased to 692.7 million arrivals in 2001. Which are over 27 times
increase over a period of 50 years. Similarly in terms of receipts from tourism, while
2100 million US Dollars were recorded in the year 1950, a total receipt of 516 billion
dollars has been recorded in the year 2001 which is approximately 25 times increase
in 50 years.

Tourism today has become a very complex activity encompassing a wide range of
relationships. Resulting in the improvements in standard of living and disposable
income with more leisure time, the overall numbers of tourists are expected to grow
further. Factors like availability of cheaper and convenient transport, no restrictions
on travel, availability of information on various destinations and new marketing
techniques contributed the growth of overall number of tourists in this modern world.
Additionally, a number of socio demographic factors such as increased urbanization
of population, higher educational standards, advancement in information technology,
and increased paid holidays for the worker have strongly influenced the increased
growth of tourism. Tourism is a leisure activity, which involves a discretionary use of
time and money, and recreation is often the main purpose for participation in
tourism. Some of the main characteristics of tourism are:

77 Tourism arises from a movement of people to, and their stay in, various
78 There are two elements in all tourism: the journey to the destination and the
stay including activities at the destination.

79 The journey and the stay take place outside the normal place of residence and
work, so that tourism gives rises to activities that are distinct from those of
the resident and working population of the places, through which tourists'
travels and in which they stay.
80 The movement of destination is of a temporary short-term character, with
intention the return within a few days, weeks or months.

81 Destinations are visited for purposes other than taking up permanent or

employment remunerated from within places visited.

According to Young (1973): "Tourism as a heterogeneous group embracing a large

variety of trade and industries that have the supplying of traveler's need as a
common function".

Tourism product can be seen as s composite product with the combination of

attractions, transport, and accommodation of entertainment. The individual hotel,
company, airline or there supplier supplies each of their components. Some of
SCHOLARS conceptualize tourism product as a bundle of activities, services and
benefits that constitute the entire tourism experience. The bundle consists of four
components: destination attractions, destination facilities, accessibility image and the

Tourism product is perceived as an experience from the point of view of the

consumer. This experience even in the tourist's product's ready-made package form
is purely subjective and differs in time and place. Tourist product is essential
intangible. It cannot be stored nor transported. The intangible nature of tourist's
product poses problems of measurements. It is just a perception of individual or
perceived as an experience from the viewpoint of the consumer. In tourism it is
necessary to transport the consumer to the product or services itself. The sellers of
the tourist product, who can neither hold the stock of product nor display the product
itself, have instead only representations in the form of brochures, catalogues, posters
and other printed materials.

Tourism is often regarded as an extreme form of recreation, involving longer time
periods, traveling longer distance and often staying overnights. The world is getting
smaller everyday due to the rapid advancement of transport and communication. As
a result man's life is getting busier. Man by nature cannot live within a certain limits.
He likes changes. He always wants to experience a new taste of life. For to fulfill his
desire he movers from one place to another place for various purpose like tot see his
friends and relatives, visit different places, for relaxation, for study, health, religion,
sport, business etc.

According to Valene L. Smith, "Tourist is a temporary leisured person who voluntarily

visits a place away from home for the purpose of experiencing a change".

According to Ramesh Raj Kunwar in his book Tourism and Development: Tourism is
the temporary movement of people to destination outside their normal places of
work and residence,. The activities undertaken during their stay in those destinations
and the facilities created to cater to their needs. The study of tourism is the study of
people away from their usual habitat, of the establishments, which respond to the
requirements of travelers, and form of the impacts that they have on the economic,
physical and social well being of their hosts. It involves the motivations and
experience of the tourists, the expectations of and adjustments made by residents of
reception areas, and the roles played by the numerous agencies and institutions,
which intercede between them.


According to different authors, tourism can be classified into various types. But here
is mention about 6 types of tourism base on the book of Yojna Raj Satyal. They are:


Under pleasure tourism, people go on holiday for enjoyment out of curiosity; to take
rest, observe something new, to delight of good scenery in unknown folklore. Some
tourists find pleasure in traveling to various places. This type of tourism usually
depends upon different taste of different people.


Recreational tourism is mainly concerned with leisure and rest and to cover physical
and psychical stamina. This type of tourist usually stays longer.


This type of tourism is motivated by the eagerness to learn the different cultures of
different countries.


This type of tourism is organized in different countries when such convention
facilities are available. These conferences are arranged in the cities best prepared to
receive the delegates and to cover the low occupancy rate of the hotel in the low
season. Such types of conference tourism are growing rapidly in the modern world.


Sporting tourists are interested in two types sporting which are:
82 Visiting sports events like Olympic, World Cup etc that attract not only
sportsman to the host country but also a larger number of sport fans tourist to
see these functions.
83 Visiting well organized sporting events in countries, which have specialized
facilities such as winter sports, natural sports, fishing, mountain climbing etc.


Tourists who come for business purpose are called business tourists. Business or
industrialists or professionals visiting place of their interest or fairs and exhibitions or
places of technical achievements are included under this category.


There is no doubt that tourism is one of the key economic sector in Nepal it is one of
the profitable and important export industry which is making a significant
contribution in employment and income generation as well as foreign exchange
earning, so the promotion of tourism sector include a great multiplier effects in the
economy in the economy as a whole. The various importance of tourism can be
defined as follows:
84 Tourism is a media through which people can share knowledge and creates
understanding among the people of the world. It is becoming a more powerful
tool of education, which provides opportunities to understand the society,
cultural, traditional habits, foods, dress, and life styles of different countries.
85 It does not earn only huge amount of foreign currency but also maintains the
favorable balance which rose due to inequality in import and export trade.
86 It has special contribution towards employing people at large. It includes all
type of product planning and activities implementation programmed for
example. Manpower training development of handicraft, business remote area
development etc that begins economic benefits to the country.
87 Tourism creates an ample scope for product development opportunities and
the concerned authorities should explore its possibilities as early as possible.
88 Tourism develops curiosity amongst people abort others culture and tradition
and that lead to travel and ultimately people comes to know the real meaning
of their culture tradition and religion. Understanding of each other customs.
Most important, it teachers tolerance.
89 It is a product, which creates the close relationship, develops healthy respects
between different countries. And also a vehicle for international
understanding by way of bringing diverse people face to face. It has been
noted as a major contributor to international good will as a prime means of
developing social and cultural understanding among all the people of the
90 Tourism also plays a large part in keeping family and friends in contact and
permits students and teachers exchanges.

Above all the growth of tourism creates the demands local product and increased
incentives of local craft, industries and artistic skill of local people.
Chapter III



Tourism is one of the important contributors to economic and social development of a
country like Nepal. Considering this HMG emphasized tourism development in every
plan period. Realizing its great important, department of tourism established in first
five-year plan period in 1959. The first five year plan (1956-61) gave adequate
emphasis to build requisite infrastructures for electricity, water, and construction
airports etc which are also basic infrastructures for tourism development. The third
five year plan (1956-70) aimed to increase the number of tourist and foreign
exchange earning as well as to develop tourism infrastructure by establishing hotel
and extension of aviation facilities, publicizing Nepal abroad, production of
promotional film relating to Nepal and distribution of tourism materials, conservation
of temples and historical places and development of Mahendra Museum and national

The forth five years plan (1970-75) extended special importance to the tourism
sector. During this plan period, Nepal tourism plan was drafted.

The fifth five year plan (1975-80) aimed to earn more foreign currency and make
balance of payment favorable by developing tourism in this country. This plan
emphasized on:
91 Development of tourism by developing historical, cultural and geographical
92 Development of tourist centre outside of Kathmandu valley.
93 Developing necessary facilities in tourist centre and extending training to
develop skilled manpower.
94 Longing the day of stay of the tourist as far as possible.

Similarly, eight five year plan (1992-97) also gave emphasis to develop tourism. The
major policies adopted in this plan period were historical cultural and environmental
promotion by encouraging private sector the plan also emphasize to increase
government investment in physical infrastructure. Emphasizes to bring in more
tourist and increase their average stay and expenditure, promotion of high quality
religious and increase their average stay and expenditure, promotion of high quality
religious, involvement of Nepalese diplomatic missions for tourism promotion,
procedural simplification adoption of open sky policy, encouragement of private
sector in aviation, consideration of tourism as a priority sector and categorizing
tourism sector loans as priority sectors loans. In spite of all this spreading benefits of
tourism to local communities involving non-government organization (no) and local
people in monitoring and managing adventure sites are other notable points of eight


Tourism has competitively and rapidly developing in the world and due to specific
nature hence in order to increase national production and income, to extend the
earning of foreign currencies, to create opportunities for employment, to improver
regional and imbalance and to develop the image of Nepal and the international
community his majesty's government of Nepal, Ministry of tourism and Civil Aviation
has recently introduced a new policy on 1995. This policy was passed by Tourism
Council in the third meeting on the 14th June 1995.


95 To develop tourism as a main economic sector of the nation by establishing
it's interrelation with other sectors of the country.
96 To increase employment, foreign earnings and national income and to
improve regional imbalance having expanded the tourism industry up to the
rural areas.
97 To develop and expand tourism industry by promoting natural cultural and
human environments of the country.
98 To maintain high image of the nation in international community by providing
standard services and necessary security to tourists.
99 To develop and promote Nepal as and attractive tourist centre.


The new policy has given great importance to the role of the private sector in Nepal's
tourism def. The new policy 1995 has eleven policies related to different sectors,
which are as follows:
100In this policy, private sector's participation shall be highly encouraged in the
development; and expansion of tourist activities/ his majesty's government's
involved to increase tourism infrastructure and play a role of coordinator as
well as catalyst.
101For the sake of sustainable development of the tourism industry,
environmental protection programmed shall be carried in an effective and
integrated manner.
102Priority shall be given to new tourist spots particularly rural tourist spots
having strengthened existing tourism infrastructure and facilities.
103Promoting and protecting famous religious pilgrimage places shall develop
religious tourism.
104Nepal shall, gradually be developed and as and attractive centre for the
adventurous tourism.
105To standardized service and facilities provided by the tourism entrepreneurs
and special provision for the security of tourists.
106While developing tourism sector, high attention shall be paid to improve
regional imbalances.
107Nepal shall be developed as a principal tourism destination spot by promoting
completive tourism in the markets where international tourism is originated.
108Emphasis shall be given for the development of agro-based and cottage
industry also by integrating them with the tourism industry.
109Indigenous investment shall encouraged in the service oriented agency
business where national investor have already been competent and attraction
of foreign investment or participation shall be made in the tourism industries
ice-hotel, resort, where foreign skill and technology is transferable and where
large scale investment is required.
110National civil aviation policy shall be executed as an integral part of the
tourism policy by coordinating them.


The new tourism policy 1995 has following policy strategies:
111Diversification of tourism investment
112Development and provision of wild life by utilizing existing bio-diversity and
opening up new trekking routes and climbing peaks in a phased and regional
113For protection, promotion and development, certain portion of income rose
from the tourism spots prescribed as economically backward and promotes
114Encourage conferences, cultural a youth festivals international sports and
innovative products.
115Land under the ownership of the government leasing out to ventures on the
basis of their working plan having made it environmental compatibility
116Encourage rural tourism benefiting the local and as well as national
environmental guidelines for environmental protection.
117Operation of tourism activities in an environmentally friendly way
118As mentioned above the main important strategies of the new policy is to
seek involvement of the private sector for tourism development including
investment on tourism infrastructure services and facilities. The trekking
areas have divided into three, namely general, guided and controlled.


The new tourism policy 1995 has classified tourism industries in to the following
119Classified hotels industry
121Trade agencies
123Classified restaurants and bar
124Adventurous recreational tourism
125Business (Skating, Gliding, Cable car-complex, hot air blowing gulf course,
polo, horse riding)
126Tourism related human resources development institutes/training centers.


In order to increase quality and standard in tourism services HMTTC provide
manpower-training programmers and encouraged private sectors to conduct such
programmers. The emphasis also will be given for the employment of local
manpower in travel trade services.


The new policy 1995 has provided following facilities and incentives to the tourism
industry and business.
127Hotels and resorts are classified as national priority industries and are given
the privileges as per the industrial enterprises act 1992.
128Facilities and incentives as prescribed by his majesty's government shall be
provided to other tourism industries, and business, excluding hotels and
resorts, on the basis of value add, creation of employment and creativeness.
129Other prescribed tourism industries and business shall considering their
working capacity and plans, be provided to import the prescribed goods at the
confessional rate.
130On the priority basis, tourism industries shall be provided communication,
equipments, electricity and water supply.
131Hotels, restaurants and resorts opened in the rural areas as prescribed by
HMG and other tourism business shall be provided facilities and incentives as


There are several public and private sector institutions in Nepal, which are directly
and indirectly related to develop tourism in Nepal. For the develop of tourism,
tourism institution shall be arranged as follows:

A. Public Sector Institution

According to new policy 1995, there are four institutions, which are directly related to
tourism development.

In order to develop the tourism industry as a backbone of national development and
to maintain coordination among various agencies related with the tourism industry, a
high level "tourism council" was formed in April 1992 under the chairmanship of the
prime minister. The function of this council is to remove difficulties raised in the
tourism sectors, agencies and dot review related plane.


The MOTCA shall, on the basis of the policy and guidelines of tourism council, design
necessary policy for the development of tourism and to make necessary plans and to
implement it through tourism development board and development of tourism. A
monitoring work related the ministry of tourism and civil aviation should also carry
out there-to. More over, the ministry of tourism and civil aviation shall carry out the
functions of coordination and adjustment related with the tourism development and
also the secretarial functions of the council.

The department of tourism (DOT) is the main government institution of Nepal, which
formulates and implements tourism development programs as per the stipulated
policy, direction and guidelines given by the TDC and MOTCA. Once the tourism
development board becomes competent to carryout its function the Department of
tourism shall be dissolved as to remove duplication of the functions. After transfer of
responsibilities to the tourism Development Board, function like registration to the
tourism industries, regulation and facilities to be provided shall be performed by the
MONTCA itself.


TDB shall in accordance with the policy, direction and guidelines of the tourism
council and the MOTCA, perform the above mentioned functions. The proposed board
shall be autonomous body and flexible nature, it shall operate all activities related
with the tourism expect those activities which are to be operated by HMG itself.

The board shall have a separated seal and also a fund, where contribution to have
truanted by HMG and other amount to be made available from the private sector
international agencies and other sources shall be deposited. The board shall have full
authority to with draw and spend any amount from the said fund scope of words
powers, responsibilities and other detail particular shall be as prescribed but

B. Private Institutions
There are several private institutions, which are related to develop tourism in Nepal.
Thus are as follows:
136The Hotels Association of Nepal (HAN)
137The Nepal Association of Travel Agents (NATA)
138The Nepal Chapter of Pacific Asia Travel Association (PATA)
139The Trekking Agents Association of Nepal (TAAN)
140Tour Guide Association of Rafting Agents (TURGAN)
141The Nepal Association of Rafting Agents (NARA)
142The Nepal Heritage Society (NHS)
143The Nepal Star Hotel Association (NSHA) and
144The Thames Tourism Development Committee (TTDC)

There are also NGO's which have been active in promotion cultural and main NGO's
are the Annapurna conservation Area Proper (ACAP) implemented by the king
Mahendra Trust for Natural Conservation (KMTNC). NHS has also been promoting
heritage tourism in Nepal through their programs of Repair and Conservation of
Ancient Monuments.
Chapter IV


The main objective of theist chapter is to present and analysis all the information and
collected data and gets the result to meet the objectives of the study.

Table 4.1
Tourist Arrivals
(1962 – 2004)
Year Total No. Growth By air % of By land % of Average
Rate % No. total No. total length of
1962 6179 - - - - - -
1966 12567 - 11206 89 1361 11 -
1970 45970 - 36508 79 9462 21 -
1974 89938 - 74170 82 15668 17 13.2
1978 156123 - 130034 83 26089 17 11.8
1982 175448 - 153509 87 21939 13 13.3
1986 223331 - 182745 82 40586 18 11.2
1987 248080 11.1 205611 83 42469 17 12.0
1988 265943 7.2 234945 88 30998 12 12.0
1989 239945 -9.8 207907 87 32038 13 12.0
1990 254885 6.2 226421 89 28464 11 12.0
1991 292995 15.0 267932 91 25063 9 9.3
1992 334353 11.1 300469 90 33857 10 10.1
1993 293567 -12.2 254140 87 39427 13 11.9
1994 326531 11.2 289381 89 37150 11 10.0
1995 393395 11.3 325035 89 38360 11 11.3
1996 393613 8.3 343246 87 50367 13 13.5
1997 421857 7.2 371145 88 50712 12 10.5
1998 463684 9.9 398008 86 65676 14 10.5
1999 491504 6.0 421243 86 70261 14 12.3
2000 463646 -5.7 376914 81 86732 19 11.9
2001 351237 -22.1 299514 85 61723 18 12.0
2002 275468 -23.7 218660 79 56808 21 7.9
2003 338132 22.7 275438 81 62694 19 9.6
2004 385297 13.9 297335 77 87962 23 13.5
Total 6913688 251.8

Average tourists arrival per year = 6913688/25

= 276547.52
Average length of stay = 251.8/25
= 10.072
T o u ris t Arr iv a l in N e pa l






400000 292995


To ta l N o .
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Y e a r (1 9 9 0 to 2 0 0 4 )

Figure: 4.1
(Source: Nepal Tourism Statistics)


The number of tourist arrival in Nepal is increasing progressively during the period
1990-2004. However, in the year 1993, 2000, 2001, 2002 there are decline by
-12.2%, -5.07%, -22.1% and -23.7%. Even through the number of tourist arrivals are
increased but the growth rate are decrease in the year 1996 and 1999. The average
tourist visit per year is 338327. But there has been comparative decrease in the year
1993, 2000, 2001 and 2002. The average length of stay is 11.107 days but there
have been comparative decrease in the year 1991, 1992, 1994, 1997, 1998, 2002
and 2003. It may be due to many responsible factors like:
145Lack of publicity in international tourism market
146Disturbance by golf war
147Increase in pollution and lack of facilities
148Lack of Derek Air-link between Nepal and West Europe
149Air fare difference between Europe destination South Asia
150Political revolution and instability in Nepal

The total number of tourist arrival data during 12 months of 2003 vs. 2004 is
presented as follows:
Table 4.2
Tourist Arrivals by Months
(2003 vs. 2004)
Month 2003 2004 % Change
January 21215 30988 46.1
February 24346 35631 46.3
March 27737 44290 59.7
April 25851 33514 29.6
May 22704 26802 18.0
June 20351 19793 -2.7
July 22661 24860 9.7
August 27568 33162 20.3
September 28724 25496 -11.2
October 45459 43373 -4.6
November 38398 36381 -5.3
December 33115 31007 -6.4
Total 338132 385297 13.9

Overall tourist arrival unto June has marked as 2.7%, September has marked as
11.2%, October has marked as 4.6%, November has marked as 5.3% and December
has marked as 6.4% decrease compared to the same period of last year.

The various possible causes of declining tourist arrivals during the subsequent strikes
by some bad incidents in the valley, frequent Nepal Bandhs called by various political
parties and also the introduction of new frontier formalities for Indian tourist coming
to Nepal have led down toward trend in the tourist arrival.

Tourist Arrival in 2003 vs. 2004 2003


Total No.









Figure 4.2
Table 4.3
Tourist Arrivals by Age Group & Sex
(2003 vs. 2004)
Age group 2003 2004 % Change
0-15 years 16056 38734 141.2
16-30 years 78357 84125 7.4
31-45 years 99740 128267 28.6
46-60 years 85753 96920 13.0
61 & above 58226 37251 -36.0
Total 338132 385297 13.9
Male 204732 255303 27.4
Female 133400 129994 -2.6

Tourist Arrivals by Age Group

Total No.

80000 2003
60000 2004
0-15 years 16-30 years 31-45 years 46-60 years 61 & above
Age Group

Figure 4.3


It noted that, tourist-visiting Nepal indicates that main purpose of visited as sight
seeing and pleasure (holiday pleasure) and the second main purpose of visit as
trekking and mountaineering. In between three years (2002 to 2004), 37.57% of
overall tourist visited Nepal for holiday purpose, where as 19.46% visited for trekking
and mountaineering and the minimum numbers of tourists visited are business and
pilgrimage purpose, it covers only 5.03% and 7.9% respectively. It may be due to the
lack of publicity and facilities provide by the government and private sector.

Table 4.4
Tourist Arrivals by Purpose of Visit
Year Holiday Trekking & Business Pilgrimag Official Others Total
& Mountaineerin e
Pleasure g
2002 110143 59279 16990 12366 17783 58907 275468
2003 97904 65721 19387 21395 21967 111758 338132
2004 167262 69442 13948 45664 17088 71893 385297
Total 375309 194442 50325 79425 56838 242558 998897
% 37.57 19.46 5.03 7.9 5.7 24.28


Nepal is a landlocked country. So, it has not the direct route to the sea transport. The
only possible way of entering Nepal is either bevy road or by air. According to survey,
the maximum tourist arrivals in Nepal are by the different airlines.

Table 4.5
Tourist arrivals by mode of transport
(2003 vs. 2004)
Airlines 2003 2004 % Change
RNAC (RA) 70779 57678 -18.5
Indian Airlines (IC) 78461 78959 0.6
Thai Airlines (TG) 55102 58197 5.6
Qatar Airlines (QR) 26320 32866 24.9
Gulf Air (GF) 18532 16986 -8.3
Biman B'Desh (BG) 10882 9432 -13.3
Austrian Air (OS) 6228 6697 7.5
Druk Airlines (KB) 3343 4373 30.8
Pakistan International (PIA) - 1910 -
Jet Airways (9W) - 15101 -
China Southwest Air (SZ/CA) 3300 5841 77.0
Transavia Airlines (HV)* 2001 - -
Others 490 9295 1796.9
Total By Air 275438 297335 7.9
Total By Land 62694 87962 40.3
Grand Total 998132 385297 13.9
(Sources: Nepal Tourism Board, Exhibition Road, Nepal Tourism Statistics 2004)


Nepal is a Himalayan country. It's natural beauties and geographical fitness can
easily attract any even of the world. It is also a land of Yeti and birthplace of Gautam
Buddha who is well known as "Light of Asia" in the world. The tourist who visited
Nepal, since it opened to the out side world are found to have belonged to rhea
different regions. Because of the above regions the number of tourists is increasing
every year.
Table 4.6
Tourist Arrivals By Nationality
(2003 vs. 2004)
Nationality 2003 2004 % Change
North America 22992 25505 10.9
South & Central America 2262 4373 93.3
Western Europe 95162 116505 22.4
Eastern Europe 6451 7661 18.8
Asia 200045 218387 9.2
Australia & Pacific 9608 10947 13.9
Africa 1612 1161 -28.0
Grand Total 338132 385297 13.9
(Source: Nepal Tourism Board, Exhibition Road, Nepal Tourists 2004)

Tourist Arrival in 2004

1161 North America
10947 25505 4373
South & Central
116505 America
Western Europe

Eastern Europe

Australia &
7661 Pacific
Afric a

Figure 4.6


Tourism has ever been a medium to familiarize foreigners to Nepal. It is a highly
profitable and booming business, as it has become a major source of foreign
exchange. Also tourism development indirectly helps the nation creation additional
employment opportunities tourism provides 19.6% of the total foreign exchange
earning from tourism will raise over by 30% annually. Approximately 460000 tourists
come to veal everyone out of 10 is employed in this sector. So tourism has been
recognized as a very important sector for good impact in enlistment of Nepalese


Tourism is a major source of foreign exchange earning. Foreign exchange from
tourism has been increasing. The foreign exchange earning from tourism industry in
2002 to 2004 is shown in getable 4.7.1.

Table 4.7.1

Foreign Exchange earning from tourism

Year Total foreign Total foreign % Change in US $

exchange earning exchange earning
(In Rs. 000) (In US $ 000)
2002 8300553 106822 -
2003 14508396 192832 -
2004 13146534 179941 -6.7
(Source: Nepal Tourism Board)


Tourism is one of the major employment generating sector developing countries like
Nepal. Employment generation from tourism and tourism related sectors were
together 1997/98. There were directly employed in tourism sector. 5% of these were
employed in hotels, the rest in travel and trekking agencies and airlines. A survey
made by Nepal Rastra Bank in 1989 said that till 1988, there was 1176 people’s
employed in the tourism related sector, of which 61.7% where at the basic level and
29.2% were at top level. The employment generation from tourism and tourism
related sector is presented in table 4.7.2.

Level of employment
% Top %Middle % Basic Average
Hotel 5912 8.5 30.0 61.5 25
Restaurants 693 12.0 38.0 50.0 13
Travel agencies 1544 17.6 13.0 39.4 30
Airlines 2738 4.4 22.0 74.0 NA
Carpets 2551 1.5 5.0 94.0 NA
Trekking 978 12.5 26.0 61.0 20
(Source: Nepal Rastra Bank, 1990)
Total employment (Number)

2551 Hotel
5912 Restaurants
Travel agencies
1544 693

Figure 4.7.2
Chapter – V



epal though a poor country has been blessed with rich natural and cultural heritage
and hence has opened gat of opportunities for her. Tourism has come long way with
its root back developed in 50s. With its growing and valuable contribution toward the
development of the Nepalese economy in context of increase in national production
and income, creating employment opportunity, improving regional imbalance and to
develop the image of Nepal. In an international community, made an immense need
to promulgate different plans and programs, implementation strategies, facilities and
incentives scheme creation of institutional arrangements, develop and expand tourist
attraction points. The recent success of “VNY 1998” has ventured to present “2002
as the Destination Nepal Year” to attract more tourist in the coming year with lots of
opportunities placed in by tourism, it has made possible for putting the joint effort by
the country people, government and other concerned sectors.


epal is blessed with natural with natural and scenic beauty and has been successful
in presenting herself the wonderful in front of the world. It is because of this, tourism
and its development has been a subject of major concern. It is considered to be one
of the powerful developing aspects for our country.
Analyzing upon the presentation and analysis part of here report, the number of the
tourist’s inflow has subsequently increased during the recent 10 years except in 1993
i.e. form 2002-2004 with minor fluctuations. Tourist’s arrivals are found quantitative
rather than qualitative. The major purpose of their arrival is sight seeing,
mountaineering and for pleasure.
Chapter – VI


ourism has an important role to play in uplifting the Nepalese Economy. It is
therefore, essential to consider all the aspects of tourism development to present the
country the best place to travel explore and adventure. Though, the data so analyzed
show the subsequent increase in the tourist arrivals yet the question of quality vs.
quantity arises. The actual and the expected data do not match. It is because of
certain weakness of our country possesses that are yet to be strengthened.

The lack of sound tourism marketing, planning, processing and research system,
Nepal could not achieve better result in tourism as per its potentiality. The
international tourism marketing was carried out without sound linkage between the
products and their target market. The limited funds and scattered marketing
activities hardly achieve any desired targets. Due to the government instability and
the bureaucratic procedures, tourism was hardly treated as a professional business
sector that needs competitive marketing strategy.

The environment pollution and degradation hinder upon the natural beauty. Though
tourism was pointed out as one of the major foreign exchange earning, the priority
given to tourism sector was only after “the VNY 1998” that the realization of the
importance of tourism spreads nationwide for greater and more and coordinate effort
for tourism development. Therefore, the need for a planned tourism development has
been realized so that tourism development program could be measurable and
achievable. The creation of different institutional arrangement would be helpful for
the development of tourism in Nepal.
Chapter – VII


n order to attract tourist, government should have preserve existing culture, arts and
movements and research in this field should be carried out to introduce new culture,
best arts etc. Sanitation and hygienic are the major problems facing by tourist here.
In order to improve these problems there are some major steps to be taken by
governments for the development of tourism in Nepal, they are:
151To keep city clean, to arrange a clean public toilet; to create various
destination interesting and pleasing way; and to preserve them.
152There are few proper hotels/lodges and other accommodation facilities and
also they are situated at the Kathmandu valley only. Due to these problems
tourists don’t like to go out side of the valley so, concern sector must give
attention to make international standard hotels and hotels outside of the
153To increase the foreign currency and number of tourist arrivals, concerned
authority must give attention to lengthen their stay and provide good security
for tourists.
154To develop tourism, tourist information centers should be established in
different parts of Nepal so that tourists could easily get information about
hotels, traveling routes trekking etc.
155The services and capacity of international Airlines, which have direct flights in
Nepal, are limited. So, the government should increase airlines capacity for
direct linkages with different parts of the world.
156To developed tourism in Nepal political stability, concerned authority must
implement tourism awareness, proper education system and new tourism
157In Nepal visa procedure is another problem, it is suggested to make visa grant
process more lucid and practicable.
158Newness is a source of pleasure to tourist so; government should identify new
places for resort area and mountaineering tourism for rapid development of
tourism in Nepal.
159The government only can’t develop tourism alone so; the government should
coordinated local government municipality, NGOs/INGOs and private sector in

160Hari Prashad Shrestha “Tourism in Nepal”

161Yajna Raj Satyal “Tourism in Nepal”
162A. M. Shrestha “Tourism scene in Nepal”
163Hari Prasad Shrestha “Nepalese Economy”
164Prem N. Kakar “Tourism and its prospect in
165Tourism arrival declines by 11
166Digest Volume 8
167No. – 9, Jan 1 – 15, 2001
168Tourism policies and objectives “Tourism Policy 2052”
169Statistical Data “Nepal Tourism Board –
Nepal Rastirya Bank (TIA)
170Institutional arrangement for – facilities and incentive to the tourism industry
and Business
171Basnet Bagala “Human Resources Base to
Sustain Tourism Sector”.