Tourism pumped Rs177b into Nepal’s economy

Nepal’s travel and tourism sector pumped Rs177 billion into the economy and supported more than 427,000 jobs last year, the World Travel and Tourism Council (WTTC) said.

According to its annual Economic Impact Research report for 2017, tourism accounts for 7.5 percent of Nepal’s GDP and is forecast to rise 4.3 percent annually to Rs287.6 billion, or 8.3 percent of the GDP in 2027. The GDP generated directly by the travel and tourism sector includes its indirect and induced impacts.

The report said that the direct contribution of travel and tourism to the GDP in 2016 was Rs85.2 billion, or 3.6 percent. This is forecast to rise by 6.8 percent to Rs91 billion in 2017. Nepal is ranked 37th in terms of travel and tourism direct contribution to GDP among 185 countries surveyed.

Nepal trails behind India and Bangladesh, but is ahead of Sri Lanka in South Asia in terms of direct contribution of tourism to the economy. This primarily reflects the economic activity generated by industries such as hotels, travel agencies, airlines and other passenger transportation services, excluding commuter services. It also includes, for example, the activities of the restaurant and leisure industries directly supported by tourists.

The London-based council said that travel and tourism investment in Nepal last year was Rs16.5 billion, 3 percent of the total investment.

In 2016, the industry directly supported 427,000 jobs, or 2.9 percent of the total employment. This is expected to rise by 2.9 percent per annum to 604,000 jobs in 2027.

The total contribution of tourism to employment, including wider effects from investment, the supply chain and induced income impacts, was 945,000 jobs in 2016. This is forecast to increase by 5.4 percent in 2017 to 996,000 jobs. The report has forecast that by 2027, the industry is expected to support 1,325,000 jobs. 

Foreign tourist arrivals to Nepal jumped 39.71 percent to 753,002 in 2016. Visitor exports generated Rs48.6 billion, or 17.7 percent of total exports in 2016. In 2017, this is expected to grow by 9 percent, and the country is expected to attract 801,000 international tourist arrivals.

By 2027, international tourist arrivals are forecast to total 1,384,000, generating expenditures of Rs102.1 billion, an increase of 6.8 percent per annum, according to the report.

Leisure travel spending (inbound and domestic) generated 86.7 percent of direct travel and tourism GDP in 2016, or Rs122.3 billion, compared to 13.3 percent for business travel spending of Rs18.8 billion.

Business travel spending is expected to grow by 8.2 percent in 2017 to Rs20.4 billion. Leisure travel spending is expected to grow by 6.9 percent this year to Rs130.8 billion.

Domestic travel spending generated 65.6 percent of the direct travel and tourism GDP in 2016 compared with 34.4 percent for visitor exports or foreign visitors.

Domestic travel spending is expected to grow by 6.1 percent in 2017 to Rs98.2 billion, while foreign visitor spending is expected to grow 9 percent this year to Rs53 billion, according to the report.



TRAVEL & TOURISM ECONOMIC IMPACT 2017
ECONOMIC CONTRIBUTION    2016    2017*
Foreign tourist spending     Rs48.6 billion    Rs53 billion
Total contribution of tourism to GDP    Rs177.9 billion    Rs189 billion
Direct contribution of tourism to GDP    Rs85.2 billion    Rs91 billion
Capital investment     Rs16.5 billion    Rs16.5 billion
Leisure travel spending    Rs122.3 billion    Rs130.8 billion
Business travel spending     Rs18.8 billion    Rs20.4 billion
Total contribution to employment    427,000     452,500
Total contribution to employment    945,000     996,000
Tourist arrivals     753,002    801,000
*Forecast (Source: WTTC)