Hotels should be priority industry, say businessmen

Kathmandu, Oct. 2: 

The Tourism and Air Transport Committee under the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has demanded that the hotel business be given the same services and facilities as the 'national priority industry'.

The delegation of the FNCCI that included its Vice-president Hemraj Dhakal and Chairman of the committee Desh Bandhu Basnet (Ajit) called on Minister for Industry, Commerce and Supplies Ramesh Rijal and demanded the service facilities to the hotel business like the 'priority industry'.

According to the Industries Enterprises Act-2020, adventurous tourism with infrastructures, rural tourism; ecological tourism, golf course, polo, pony trekking, trekking tourism, rafting, assembly, conference tourism, sports tourism, religious tourism, cultural tourism, fun park construction and operation and wildlife reserve which are related to tourism are categorised as the priority industry but hotel and hospitality sector is not included in the definition.

"In addition to providing employment opportunities to millions by investing large capital in the hotel sector, the businesses have also contributed to the gross domestic product (GDP) of the country by earning a large amount of foreign currency," Basnet said as he handed over a memorandum to Minister Rijal. 

Therefore, classifying this sector as a national priority industry is our earnest and urgent demand, he said. 

The committee claimed that the hotel sector should be given such facilities as per the manufacturing industry according to its contribution to the economy and destination development as well as the production of tourist goods and services. The facilities to the national priority industry include special discounts on tax and import duties and concessions on utility bills like electricity and water. 

The committee has also put forward a demand that the current Foreign Investment and Technology Transfer Act, 2019 should be amended to allow foreign investment in the hotel business. 

"Currently, according to the provisions of the law, it is difficult to operate an international hotel and resort in the country with the provision that the royalty fee is not more than 5 per cent of the total sales," the memorandum submitted by the committee to the minister states. Because of this, foreign investment cannot be brought into this sector, Basnet said and demanded that the provision in the law should be removed immediately to bring in more foreign brands and investment in the hotel business.

VP Dhakal said that it is necessary to attract more investment in the hotel and hospitality sector from foreign investors, non-resident Nepalis and multi-national companies. 

Industry Minister Rijal said that the demands of the private sector would be addressed. He directed the secretary of the ministry and other concerned agencies to resolve the problems at the earliest, the committee informed in a statement. 

Published in The Rising Nepal daily on 2 October 2023.