29 Aug, 2005
Nepal Tries Rebranding, Shifts Marketing Focus to Asia
KATHMANDU – Facing the fallout from the negative publicity and travel advisories generated by a nagging Maoist insurgency, Nepal is reorienting its marketing strategies towards South and Southeast Asia, with Thailand being a primary target.
An Indian company, Alchemy Social Infrastructure, has been hired to carry out a US$ 50,000 rebranding exercise that will be unveiled at the ITB Berlin, the world’s biggest travel trade show, in March 2006.
The money has become available following the revamping of the tourism tax collection system earlier this year. All departing foreign visitors now pay a US$ 8 charge that is collected by the bank and goes directly to fund the Nepal Tourist Board. The previous system levied a 2 % charge on all hotels, tours, trekking and other services, all of which went first to the government.
The former system had a “collection” problem, said Tek Bahadur Dangi, managing director of the Nepal Tourist Board. “The new system has doubled our budget but also helped the tourist pay less overall.”
He said hiring an Indian company has been far more cost-effective than using one from Europe or North America which would have cost 10 times more.
After a sharp slump caused by the political crisis last February, arrivals are now beginning to climb back. The daily newspapers are full of reports about the Maoist insurgency in the countryside, and many travel advisories are in place, but life is otherwise normal nationwide, just like in Thailand.
Visitors by air in July 2005 were up 4% over July 2003 to 19,505, especially from Thailand, India, Bangladesh and China.
Thailand was up 167%, thanks to promotions by the NTB as well as a growth in the Buddhist circuit. Mr Dangi said he had been told of plans by Thai Airways International to operate four Buddhist pilgrim charters to Kathmandu this October.
Indian visitors improved by 23%, thanks to strong media coverage and TV ads in the Indian market as well as improving accessibility by numerous airlines connecting five Indian cities to Kathmandu.
Arrivals from Bangladesh were up by 78% in July, also the result of better connectivity and availability of competitive packages. Arrivals from China and Taiwan are also up considerably.
Arrivals from Malaysia did well in the first half of the year but fell 10% in July after Qatar Airways pulled out from the Kathmandu-Kuala Lumpur sector. Japanese arrivals fell 31%.
The European sector fell by 7%. Although there were gains from the British (6%), Dutch (4%) and Belgian (2%) markets, they did not compensate for a decline from Germany (-10%), France (-18%), Spain (-13%) and Italy (-10%).
India is now a prime target, especially because Indians don’t need visas. Mr Dangi said he was also targetting the 4.5 million arrivals that India gets by promoting more joint India-Nepal packages in the long haul markets. The NTB is also encouraging Indian film-makers to shoot Bollywood movies.
The real promising area is the Buddhist circuit. Special promotions are being carried out in India, China, Thailand, Singapore, Malaysia, and Sri Lanka. A Ten Year Work Plan for the improvement and conservation of the World Heritage sites in the Kathmandu Valley is being implemented in coordination with the local bodies.
The Gautam Buddha Airport of Bhairahawa, near Lumpini, birthplace of the Buddha, is being expanded in anticipation of making it Nepal’s second international airport and taking direct flights from abroad within two years.
Land is being acquired to extend the present runway to 3,000 meters to accommodate wide-bodied aircraft.
A new private airline, Air Nepal International, has begun flying to Bangkok, Kuala Lumpur, Doha and Dubai as of July 24. The company has acquired a Boeing 767 ER under a one-year Aircraft Crew Maintenance Insurance (ACMI) lease from PB Air, Thailand.
The 245-seat Boeing is operating thrice a week to Dubai, Doha and Bangkok and twice a week to Kuala Lumpur. Currently, Cosmic Air is the only Nepali private carrier operating to India and Bangladesh.
Kathmandu is also connected to Middle East by Royal Nepal Airlines, Gulf Air and Qatar Airways which bring in more than 40,000 visitors from Europe, especially since the suspension of all of Royal Nepal Airlines flights to Europe earlier this year.
Qatar Airways is now operating 11 flights a week and plans to go to double daily as of October.
After a long lull in new hotel development due to the tourism downturn, the country’s first resort hotel has also just opened. The Le Meridien Kathmandu, Gokarna Forest Golf Resort & Spa is in the Gokarna Forest, traditionally the private hunting ground of the Nepali rulers, but only 10 kilometers from Kathmandu Airport.
Tourists can also visit Tibet from Nepal, by both air and bus. A Kathmandu-Lhasa direct passenger bus service resumed on August 23.
Sajha Yatayat, a Lhasa-based agency, is managing travel permits for passengers. Besides the one-way bus fare of US$ 70 per passenger, an additional $10 will be rated as service charge for visa processing and permit issuance while foreign travellers have to pay an additional $50, which will include lodging cost for three nights.
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