What do Chinese Tourists Want? NEPAL’S TOURISM INDUSTRY HAS NO REAL IDEA OR STRATEGY TO TAP THE WORLD’S LARGEST OUTBOUND MARKET Abhilasha Rayamajhi Kathmandu  Chinese tourist arrivals drastically dropped by around 55 per cent in 2015 when compared to 2014. Nepal received 123,805 Chinese tourists in 2014 which dropped to 66,984 in 2015. Further, the inflow of Chinese tourists this year is not impressive and does not promise much growth. China ranks number one in outbound tourism with 120 million tourists who spent 215 billion US dollars in 2015 according to World Travel and Tourism Council. Chinese tourists are not only huge in numbers but also the biggest spenders. Despite the huge potential and proximity to Nepal, the tourism industry in Nepal has not been able to tap this giant market. Tourism entrepreneurs are quick to blame poor air connectivity, costly airfares and delay in development of infrastructure for the loss of interest of Chinese tourists in Nepal. However, are these the real problems or is there much more to this dismal performance?  LACK OF CREATIVITY AND FOCUS  “ The tourism industry of Nepal has a vague idea of what Chinese tourists want in Nepal and what we have on offer for them,” says Bijay Amatya, CEO of Kora Tours. According to him, in order to create demand we should clearly understand the needs of Chinese tourists. He adds, “ We must know what to market, to whom and how. Focus and creativity is lacking in the industry.” It is high time the government and stakeholders invested in aggressive promotions and simultaneously developed infrastructure, he says. He recommends that a study of our tourist carrying capacity be conducted in order to clearly understand the needs of Chinese tourists. He exclaims, “ Suppose one million Chinese tourists do visit the country, where will we take them? Do we have enough vehicles to transport them? What is the carrying capacity of tourist spots like Durbar Squares?” This rings true not just for the Chinese tourists but also tourists visiting from all over the world. Nepal’s tourism potential as a destination is God gifted, but stakeholders and the government have done precious little in terms of real research and focused development and marketing to tap this in an organised manner. FIERCE PRICE WAR  The mushrooming of hotels and tourism service providers without any real research is proof of this chaos. “ The decline in the number of tourists last year resulted in a fierce price war among travel agencies,” mentions Madhu Sudhan Acharya, President of Nepal Association of Travel and Tour Agencies ( NATTA). He says that it is simple economics that whenever supply is in excess over demand the price of products decrease. He reveals, “ We accept that there exists unhealthy competition among ourselves and we operated even in losses just to survive in the market. Hotels and travel agencies offered rooms and packages at cheaper rates to sustain themselves. We do not want to push our products at cheap rates but in turbulent times that was the only option we were left with.” He believes that with promotion demand will rise and the price war will automatically end. However, the other problem that affects hotel occupancy and the tourism industry is seasonality. Seasons play a significant role in prices according to entrepreneurs. For this reason they offer discounts in the low season to attract more customers. According to recent records from NATTA the average amount spent by Chinese tourists in Nepal is about USD 50 dollars per day which excludes their shopping expense. They claim that if they add up their expenses on shopping and adventure the figure could reach USD 200 dollars per day. However, this figure is nothing when compared to their daily expenditure in other countries. Chinese travellers spend 1,086 USD a day excluding accommodation costs in Europe, USA and even other Asian destinations. According to tourism entrepreneurs, Chinese nationals have invested or acquired many hotels and businesses in Thamel and Pokhara. Many Chinese tourist groups also come through Chinese agents who handle their travel and stay in these hotels. This is not beneficial for the local industry and adds fuel to the burning issue of price war. The challenge for Nepal’s tourism industry is to attract higher spending tourists that can contribute to sustainable development of the industry. But that’s an area where we have not made any significant progress. EXPENSIVE AIR CONNECTIVITY  Air China, China Southern, China Eastern and Sichuan Airlines have been operating flights to Kathmandu from China. Airfare charged by such international carriers are comparatively costlier and this is one of the major reason perhaps that many Chinese tourists do not choose to visit Nepal. Also in the face of adverse situations and drop in passenger load they cannot be expected to continue flying to Nepal. Plans to market Nepal as a destination for Chinese tourists needs to have this factor sorted as well. Dhiraj Chandra Shrestha, Deputy Sales Manager of China Southern Airline says, “ China Southern Airlines had to suspend its flights to Nepal after the severe fuel crisis in 2015. However, it has now resumed since April 26 and we are expecting to witness an increase in the number of Chinese tourists.” “ There are only a limited number of Chinese airlines operating flights from a few cities of China to Kathmandu and this is not sufficient to really attract the maximum Chinese tourists to Nepal,” says Sugat Ratna Kansakar, Managing Director of Nepal Airlines Corporation ( NAC). Since China is an important market, he says that the national carrier should also fly to different cities of China. NAC will be directly flying to Gonzhao in the next three to four months he informs. “ In order to make airfare more competitive NAC must intervene and invest in more aircraft. The government has passed the budget for two aircraft this year and this should continue every year.” He concludes that investment in NAC is vital to help tourism and should be a part of the master plan to increase tourist arrivals and boost the entire national economy. THE ROAD AHEAD  It is not like Chinese tourists are not travelling to Nepal. But to increase the numbers a focussed approach is required by the industry. “ About 85 per cent Chinese tourists come to Nepal for tours. About 10 per cent are here for pilgrimage and the remaining for trekking or mountaineering,” says Bishwesh Shrestha, Managing Director of Shuang Qi Tours which is one of the major agencies dealing with Chinese tourists. Lumbini and Pokhara are two popular destinations for Chinese tourists. Chinese prefer these two cities to the capital, according to him. He mentions that they visit Lumbini for pilgrimage and Pokhara for adventure tourism. Chitwan and Kathmandu come after these two cities. “ We have not been able to capitalise on this market. The government has not been able to develop infrastructure to support the industry.” He questions, “ What has the government done in the past 30 years for the development of the tourism industry?” He says that even though China is the leading outbound tourism market, Chinese economy is slowing down which will impact the outflow of Chinese tourists to Nepal. He shares, “ Due to disasters and political upheavals Nepal is no longer on the desired travel destination list for Chinese tourists and it will take time for them to be reassured about travelling to Nepal.” The task ahead is to massively promote Nepal as a safe place to travel. However, with the lack of research, lack of a coordinated approach and effective marketing the number of Chinese tourists visiting Nepal will not witness a significant growth according to him. “ We are expecting around 1,00,000 Chinese tourists. But according to current trends not more than 80,000 to 85,000 Chinese tourists will arrive this year which is only a slight increase when compared to the figures of 2015.” Top 10 destinations Chinese tourists are hitting this Summer 1.       Australia 2.       Japan 3.       France 4.       Hong Kong 5.       South Korea 6.       USA 7.      Maldives 8.      Germany 9.     Thailand  10.    Taiwan (Source: Forbes.com)  Year Chinese tourists arrival 2003 7,562 2004 13,326 2005 22,377 2006 17,538 2007 28,618 2008 35,166 2009 32,272 2010 46,360 2011 61,917 2012 71,861 2013                                                                                    1,13,173 2014                                                                                    1,23,805 2015 66,984

(This article was published in The Himalayan Times-Perspectives, July 10, 2016.)