Source::The Kathmandu Post
China reopened its borders for travel, ending a three-year closure due to the Covid-19 pandemic on March 15 last year. With the reopening of both land and air borders and the inauguration of the China-funded international airport in Pokhara, there was a wave of optimism. Market insiders had anticipated a significant arrival of Chinese tourists, who had been Nepal’s second-largest source market after India before the pandemic.
However, this anticipated surge did not materialize. In 2023, Nepal welcomed 60,878 Chinese tourists, recovering to just one-third of the pre-pandemic levels when Chinese tourism in Nepal was flourishing. From January to May of this year, Nepal received 46,671 Chinese visitors, with the highest monthly arrival of 12,093 in March.
While Chinese tourist arrivals remained inactive, Indian tourist numbers rose to an all-time high of 319,936, as reported by the Department of Immigration. Notably, only Indian visitors arriving by air are counted as tourists in Nepal. In the first five months of this year, Nepal recorded 148,861 Indian tourists, with the peak monthly arrival of 38,288 in May.
Before the pandemic, India and China were closely competing as top tourist sources for Nepal. Now, a significant disparity has emerged between the influx of tourists from the south (India) and the north (China).
On Monday, during the 16th round of the Nepal-China diplomatic consultation mechanism meeting in Kathmandu, Beijing made a surprising announcement. China plans to promote Nepali tourism within its borders as part of celebrating 2025 as ‘Visit Nepal Year in China’. This initiative has been hailed as a "big statement" by Nepal’s leading travel trade entrepreneurs, who note that China has never before extended such soft power diplomacy to any country.
Kishore Raj Pandey, chairman of Saathi Nepal Travel and Tours, who pioneered bringing Chinese tourists to Nepal in 2001, remarked, “So far, I haven’t heard or seen Beijing promote any country’s tourism inside China. This is, in fact, a good gesture of neighbourliness. If it has been announced, Beijing indeed has some policy to encourage Chinese citizens to travel to Nepal.”
Tourism is crucial to Nepal’s economy. According to the World Travel and Tourism Council's latest annual report, Nepal’s tourism sector generated Rs327.9 billion ($2.5 billion) in revenue and supported 1.19 million jobs, both directly and indirectly, last year. The report forecasts an increase to 1.22 million jobs in 2024. In the previous year, the country welcomed 1 million tourists.
Some critics, however, view this as an ambitious promise. Prior to Monday's meeting, Luo Zhaohui, chairman of the China International Development Cooperation Agency, announced at the third Nepal Investment Summit in Kathmandu on April 28 that visa fees for Nepalis would be waived.
Despite facing numerous economic challenges, China remains optimistic about its growth prospects. Effective May 1, a new initiative was launched, accompanied by another significant announcement.
During the Nepal Investment Summit, Luo Zhaohui, chairman of the China International Development Cooperation Agency, revealed that the Chinese government is arranging new flights to Nepal’s two new international airports—Pokhara and Lumbini.
Nepal's $216 million international airport in Pokhara, known as the country's tourism hub, began operations in January last year with financial backing from Beijing. Similarly, Bhairahawa's international airport, constructed by Chinese contractors, started functioning in May 2022 after several construction delays. The aim of these projects is to decentralize economic activities within Nepal's new federal structure, attract more tourists, and curb the trend of Nepalis seeking opportunities abroad. However, only a few international flights are currently operating at these modern airports.
Basant Raj Mishra, a senior tourism entrepreneur, noted, “Under Beijing's renewed diplomacy, there is potential for these two new international airports to become operational.” He emphasized that the initiation of flights from China would spur competition.
Mishra also highlighted the tremendous opportunity presented by Beijing’s announcement, suggesting that Nepal should prepare for joint marketing and promotional activities. With a well-structured policy, he believes Nepal could attract 1 million Chinese tourists in 2025, but this requires improved flight connectivity.
Recent reports indicate that during the recent five-day Labor Day holidays in May, Chinese tourists traveled in significant numbers but were cautious with their spending. Despite a 28.2 percent increase in trips, spending only rose by 13.5 percent compared to the 2019 holiday period, reflecting ongoing economic uncertainty in China, the world's second-largest economy.
Vijay Shrestha, Vice President (Administration) at Himalaya Airlines, a Nepal-Tibet joint venture, noted, “Of all the countries, China has the largest number of airlines connecting Nepal but brings the lowest number of tourists.” Currently, five airlines connect China and Nepal. However, Shrestha pointed out, “The traffic is low, possibly due to low consumer confidence.” Himalaya Airlines has suspended its Kathmandu-Beijing flights, and Kathmandu-Shanghai flights are irregular due to low passenger numbers, with an average occupancy of only 40 percent across other routes. Shrestha believes Beijing's recent announcement to promote Nepal could change this trend.
Nepal and China established formal diplomatic relations in 1955, with trade between Nepal and Tibet dating back centuries. In 1956, Lhasa, Shigatse, Gyantse, and Yatung were designated as key trading cities for Nepali traders. Between the establishment of the People's Republic of China in 1949 and 1982, few Chinese citizens traveled abroad, with exceptions being government officials, students, and some businessmen. In 1983, China allowed residents of Guangdong Province to travel to Hong Kong on organized family visits. The Chinese National Tourism Administration formalized the Approved Destination Status (ADS) policy in 1995.
Chinese tourism in Nepal is relatively recent. Nepal first participated in the China International Travel Fair in 2000 to promote its tourism sector. Before 2000, Chinese nationals could only visit Nepal on official trips. In November 2001, the Chinese government granted Nepal ADS, and on April 16, 2001, both countries signed a memorandum of understanding to facilitate outbound travel from China to Nepal. Nepal was officially recognized as an Approved Destination in 2002, making it the first South Asian country and the 18th globally to receive this status. Consequently, 8,715 Chinese tourists visited Nepal in 2002.
Following the ADS designation, Chinese tourist arrivals initially declined due to a violent conflict in Nepal between 2002-2004. However, steady growth in Chinese arrivals resumed from June 2009. For the first time in 2013, Chinese tourist numbers in Nepal exceeded 100,000, largely due to improved air links between the two countries. According to the tourism ministry, 93 percent of Chinese visitors in 2013 were first-time tourists to Nepal. In 2014, Nepal welcomed 123,805 Chinese visitors.
The 2015 earthquake and an Indian blockade led to a significant drop in Chinese arrivals, reaching a four-year low of 64,675 in 2015, a 47.76 percent decrease from 2014. Additionally, the Tatopani border point, a significant entry for Chinese tourists, was blocked.
On December 25, 2015, Nepal announced a 'free visa' policy for Chinese tourists, extending the same treatment as to South Asian visitors. This policy aimed to revive tourist numbers and was implemented in January 2016. Thereafter, Chinese tourist arrivals increased steadily, peaking at 153,633 in 2018, a 46.8 percent increase from previous years. In 2019, Nepal recorded an all-time high of 169,543 Chinese tourists.
However, the numbers fell drastically to 19,257 in 2020 due to the pandemic, with only 6,198 and 9,599 Chinese tourists visiting Nepal in 2021 and 2022, respectively. These were primarily diplomats and those stranded in third countries due to China's stringent lockdowns.
With the Chinese economy recovering, Nepali investors have been investing in luxury hotels, anticipating a resurgence in tourism.
Picture Credit: Global Times
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