Ministry of Commerce And Supplies - Enhanced Integrated ...

N T I S2010Index 2: World Market ConditionsTable 2.45Total World Export Value of Tourism, 2004-2008 (US$1,000)2004 2005 2006 2007 2008n/a 680,000,000 745,000,000 857,000,000 944,000,000Source: UNWTO (2009b).Market Access Conditions: There are no particular foreign barriers in this sector. 99 Numerous barriers exist inNepal, in particular a lack of transport infrastructure.Major Competitors in World Market: Major direct competitors seem to be other South Asian countries thatoffer tourists a somewhat similar natural and cultural heritage, such as India (in particular the Himalayanregions), Bhutan, Tibet or Sri Lanka. However, these destinations can also be complementary. A lot of visitorscombine a visit to Nepal with a visit to India (31 per cent) or Thailand (14 per cent), which are also major transitcountries for flights to Nepal. Few people currently combine it with Tibet, which is probably related to thestringent visa regulations applied by China for visits to the Tibet region. 100 The same applies to Bhutan, whichis pursuing a policy to limit the number of tourists and keeping revenue per visitor high. Policy changes thatmake visits to Tibet or Bhutan easier could offer new opportunities for visitors, but are also a potential threatfor Nepal.World Market Prospect: Tourism is a fast-growing market around the world. Global international visitorarrivals have grown by 4.3 per cent per annum between 1995 and 2008 and this growth is expected tocontinue. The UNWTO forecasts a 4.1 per cent annual growth rate until 2020, and an even faster growth of6.2 per cent in South Asia.Index 3: Domestic Supply ConditionsNepal ranks very low in the World Economic Forum’s ‘Travel & Tourism Competitiveness Index’ (WEF, 2009b),which takes into consideration the regulatory framework, infrastructure, and human and natural resources. Itranks 23 rd out of 24 ranked destination countries in Asia and the Pacific, and with a similarly low rank acrossall indicators. Some of the indicators appear questionable or plainly wrong, but it is clear that overall Nepalsuffers from a lot of infrastructural and institutional constraints that also affect the tourism industry. 101Tourism Infrastructure: A particularly popular attraction for tourists in Nepal is trekking routes; however, someof them have been converted into roads, with obviously positive effects for the local population, but which hasnegatively affected trekking activities (eg Annapurna Trekking, which used to take 20 days before, which hasnow been reduced to 9 days). According to industry sources, more careful planning and development of newtrekking routes is necessary. Hotels often do not have enough capacity.Labour Cost and Overall Production Cost: Industry sources see no significant labour cost advantage comparedto competing countries, mainly because of low labour productivity and labour unrests.99One particular exception that may be seen as a foreign barrier is the Chinese “Approved Destination Status” policy, but Nepal has been an“approved destination” since 2001.100It is relatively expensive and complicated to get a permit for direct travelling from Nepal to Tibet.101One indicator measures visa requirements, where Nepal ranks 131 st out of 133, but it seems to be based on wrong information..NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT91