Kathmandu hotels expect occupancy to rebound in Oct-Nov

KATHMANDU, SEP 26 - September has been a slow month for five-star hotels in Kathmandu largely due to a sharp fall in Chinese and Indian arrivals, but the outlook for October and November is much better, said industry watchers.

Hoteliers reported a downturn in occupancy as arrivals from neighbouring China and India dropped due to the closure of the casinos, but they said that the week-long 18th Saarc Summit scheduled to be held in Kathmandu from November 22-27 would have a positive impact on occupancy and earnings besides boosting the image of the country’s tourism.

There has been a 30 percent decline in Chinese tourist movement in September, said industry sources. The peak tourist season lasts from September to late November and accounts for more than 35 percent of the tourist arrivals to Nepal. Many visitors who arrive in the autumn go trekking in the Himalayan foothills.

September is expected to close with an occupancy rate of below 60 percent, down from 61.72 percent during the same month last year. In 2012, September occupancy figures of the eight five-star hotels in Kathmandu averaged a high of 65.11 percent. A room occupancy rate of less than 60 percent is considered to be bad news for the industry.

“We have expected our hotel occupancy will close at 60 percent this September,” said Bharat Joshi, resident manager at the Hotel Yak & Yeti. “But the October booking trend looks goods so far as advance reservations have crossed 70 percent as of September 25.”

According to him, advance reservations in November have crossed 65 percent. “The Saarc Summit will be an important event that will give Kathmandu hotels a much-needed occupancy boost and bring international exposure to the country’s tourism.”

Travel trade entrepreneurs said that there had been a sharp fall in movement by Buddhist pilgrims this year particularly from Thailand, Malaysia, Taiwan and China.

Rajan Shrestha, sales and marketing director at the Radisson Hotel Kathmandu, said they were expecting 70 percent occupancy this September while advance reservations for October were not as good as last year. However, Shrestha said that November looks more promising this year as advance bookings have crossed 90 percent.

“The Saarc Summit is also expected to create a bigger impact for hoteliers in both occupancy and revenue,” he said. Shrestha added that the closure of the casinos had prompted Indian travellers to choose other destinations resulting in low occupancy in most of the hotels in September. “Moreover, arrivals from the European market have remained stagnant this year too.”

Meanwhile, the Everest Hotel, a popular hotel among Indian visitors, has reported a sharp fall in Indian clients in September. Kaushal Kumar Singh, sales and marketing director, said that hotel occupancy was expected to recover in October and November after a sluggish September.

Advance bookings for October and November have crossed 80 percent and 90 percent respectively as of September 25. The hotel has 160 rooms and all of them have been refurbished for the autumn peak season.

Meanwhile, the Ministry of Foreign Affairs has asked a number of hotels to hold some rooms for the November extravaganza. At least 2,000 delegates from the seven Saarc member countries are expected converge on Kathmandu for the summit.

The Everest Hotel said it had set aside more than 50 rooms for the Saarc delegates. “Overall, the October-November period looks good so far, but it is not encouraging as compared to the previous year,” Singh added.

Nepal’s five-star hotels encountered a glut of rooms in 2013 due to a proliferation of new accommodation ranging from guest houses to home stays which pulled away potential customers from luxury properties.

According to the Tourism Ministry, Kathmandu’s eight luxury hotels achieved an average occupancy of 62.37 percent last year, down from 66.76 percent in the previous year. In 2011, occupancy was 66.11 percent.

These properties recorded the highest occupancy rates of 75.79 percent and 70.84 percent in October and November respectively in 2013, down from 84.10 percent and 88.50 percent in October and November respectively in 2012. Out of the 575,240 room nights produced by Kathmandu-based five-star properties last year, only 358,787 were occupied. There are 10 five-star properties in Nepal, two of them in Pokhara.