By Prasanna Vaidya
The impact of COVID-19 on both the national and the global economy is being predicted every day. At this stage, every expert’s opinions are estimations/approximations while the real impact depends on the magnitude and how long the pandemic will last. Everyone seems aware of the global crisis, the COVID-19 has created and Nepal is not untouched from the prolonged impact on its tourism-based economy. The tourism sector is one of the main sectors that contributes to Nepal’s economy. Last year, Nepal’s tourism sector generated Rs 240 billion revenue and 1 million jobs.
By hosting the Visit Nepal 2020, Nepal had targeted to attract 2 million arrivals, but it is unachievable due to the pandemic. Many countries have enforced prolonged lockdowns in their effort to curb the spread of COVID-19. Because of these preventive measures, even after the lockdown ends, both the international and domestic tourists will be discouraged. As a result, there will be an immediate economic impact on the tourism sector especially hotels, airlines, and mostly the tourism-dependent retail industries will hit the hardest.
With the nationwide lockdown, which is in force since March 24, the government of Nepal is trying to slow the spread of the COVID-19 virus. Since the situation is still under control with only 217 cases so far, industries, manufacturers, and service providers of essential goods have been relieved with strict guideline while sectors which invite public gathering are still at the halt. On the other hand, to fully control the spread of the virus, Nepal needs to improve its capacity in dealing with COVID-19 and continue the infrastructural development projects aiming to restart the Visit Nepal tourism campaign next year.
Nevertheless, the Government of Nepal should also play its part in the spirit of shared responsibility to overcome the current challenges and start working to accelerate recovery measures. Perhaps some of the planning/implementing may not address all the challenges but commitment by the government provides encouragement to this sector. To support the tourism sector, Nepal should purposely encourage local tourism for domestic holidays, once it is safe which will help the local airlines, tour and travel agents, and hotels to revive their operation and brings sustainability in terms of cash flows for the time being. When the world slowly turns back to normal international travel restrictions will likely linger on to avoid importing new COVID-19 cases. So, an immunity certificate (like Yellow Fever booklet) can become a requirement for both outward and inward travel because COVID-19 survivors become immune to subsequent infections and transmissions. Already the UK is considering issuing “immunity passports” so that people can leave the lockdown early. Improving visa application processes through the online medium as part of bilateral arrangements makes easier for travelers to arrive.
In Nepal, travel has been an integral part of our lifestyle. But this outbreak has put a brake on it since February this year. Once it is safe to travel, vacation close to home can provide travelers with more peace of mind. It is the likelihood that nature and wildlife will be preferred in the months ahead. So, the hills resorts, trekking, adventure sports, wildlife reserves and slightly isolated locations will be occupied. Road trips may find greater favor with families and friends are likely to drive-outs for short vacations nearby city and some will push the ‘hometown’ visit quite significantly.
The Government of Nepal should concentrate on stimulating the tourism sector to cope and monitor worldwide measures for the pandemic. Service Tax should be relaxed to hotels, travel agencies, and airlines from March to August 2020. Monthly electricity bills should also be relaxed to hotels, travel agencies, airlines, transports, conventions and exhibition centers. The government should bring out a stimulus package to fund the employees of the tourism-related and affected sectors. There should also be relaxation on existing guidelines limiting the use of hotels as part of mitigating the reduced demand. The government also needs to propose a stimulus relief package to taxi drivers, tourist bus drivers, tourist guides, and registered trishaw drivers and resume their service with revised guidelines as their income depends on day to day service. There should be postponement of income tax monthly installments for tourism-related sectors and tax relief on the expenditure of domestic tourism for a short period. Rebates on the landing and parking charges of rental premises at the airport should be considered. And should encourage tourism and related sectors to conduct skill training to employees so that they will be prepared when the market recovers. Thus, the government should ramp-up the tourism sector to fight against slow economic growth and the pandemic.
(The author is an M.Phil at Delhi School of Economics, Delhi University.)