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Tourism Marketing

Strategy for Nepal


2005-2020

Tourism For Rural Poverty Alleviation Programme


CONTENTS
Foreword vi

1 Background 2
2 Nepal's Present tourism performance 4
2.1 Visitor numbers 4
2.2 Visitor expenditure 5
2.3 Length of stay 5
2.4 Reasons for visiting Nepal 6
2.5 Seasonality 7
2.6 Demography 8
2.7 Sources of information on Nepal 9
2.8 Access to Nepal 9
2.9 Distribution of visitors within Nepal 10
2.10 Occupancy 10
2.11 Key issues arising in the review of tourism performance 11
3 How Nepal has been marketed 12
3.1 The image of Nepal 12
3.2 Nepal Tourism Board marketing 13
3.3 Regional marketing of Nepal 16
3.4 International co-operative marketing of Nepal 17
3.5 Key issues arising in the review of marketing 17
4 Targets for future growth 18
4.1 Approach to growth 18
4.2 Projections of visitor arrivals and subsequent employment 19
4.3 Targets for seasonality 20
4.4 Market growth assumptions 22
4.5 Targets for visitor distribution 22
4.6 Inter-Himalayan tourism 22
4.7 Visitor bed night and occupancy targets 22
4.8 Visitor spend targets 23
4.9 Monitoring and review 23
4.10 Key issues relating to tourism growth 23
5 Marketing strategy for Nepal's tourism industry 24
5.1 General principles 24
5.2 Overall marketing objectives 24
5.3 Positioning Nepal 26
5.4 Branding Nepal 27
5.5 Clustering the product 27
5.6 Special interest product marketing 28
5.7 Key source markets for Nepal 30
5.8 Medium term marketing actions 2005-2009 32
5.9 County by country actions 2005-2009 33
5.10 Long term marketing actions 2010-2015 35
5.11 Key issues in the Marketing Strategy for Nepal's tourism industry 37
6 Resources for marketing and the role of the Nepal Tourism Board 38
6.1 Resource needs 38
6.2 Leadership and consultation 40
6.3 Marketing department structure 40
Published by Tourism for Rural Povery Alleviation Programme, June 2004
6.4 Research department 41
TRAPAP NEP/99/013 6.5 Key issues relating to resources and the Nepal Tourism Board’s role 43
Written by Robert Travers, UNDP Appendix : Visitor growth projections
Photography by Nepal Tourism Board, Robert Travers
Designed by WaterCommunication
v
FOREWORD
As part of its role of policy review, the Tourism for Rural Poverty Alleviation Programme prioritised
the need to review the marketing of Nepal and the formulation of a new marketing strategy for
the Nepal Tourism Board and Nepal's tourism industry. This document is the culmination of
extensive review and consultation, and is the first comprehensive marketing strategy to be
drawn up for Nepal in many years. It accords with the findings of the draft Nepal's Tourism
Industry Strategic Plan 2005-2009 and the short term marketing plan contained in the Nepal
Tourist Board's Operational Plan 2061-2062 B.S, both of which UNDP's consultants based with
the Tourism for Rural Poverty Alleviation Programme have helped produce. The Tourism for Rural
Poverty Alleviation Programme has also assisted the formulation of pro-poor tourism policies for
His Majesty's Government.

The Tourism Marketing Strategy for Nepal 2005-2020 provides guidance to the tourism industry
and to the Nepal Tourism Board for the future, and outlines the role of marketing in helping to
achieve the targets set by His Majesty's Government in the short term, and suggests ambitious
long term targets for future growth.

The Tourism for Rural Poverty Alleviation Programme is particularly concerned with promoting an
agenda which is pro-environment, pro-women, pro-community and pro-poor. This document
recognises that these objectives can only be achieved through tourism when tourism is prospering,
and outlines the way forward for a strong and united industry approach to marketing, led by the
Nepal Tourism Board.

Shanker Prasad Koirola Rabi Jung Pandey


NATIONAL PROGRAMME DIRECTOR NATIONAL PROGRAMME MANAGER
Acknoldgement
I would like to place on record my sincere thanks to Nepal's irrepressible private sector tourism entrepreneurs Tourism for Rural Poverty Alleviation Programme
who, both collectively through their representative associations and individually, have stimulated debate and PO Box 107
good humour throughout the preparation of this study. My thanks must also go to Tek Bahadur Dangi, Chief Kathmandu
Executive Officer of the Nepal Tourism Board, Nandini Lahe Thapa, Director of Marketing, and all the staff of the
June 2004
Board's marketing and research departments for their constant support and vigorous questioning of the ideas
and proposals put forward by an Irishman a long way from home. The refining process which has resulted from
this interaction has been invaluable and was always well informed. Finally to my colleagues in the Tourism for
Rural Poverty Alleviation Programme, UNDP, SNV-Nepal and DFID and MOCTCA I must express my thanks for

their untiring commitment and friendship over the past year.

Rober t Travers, UNDP


Tourism for Rural Poverty Alliviation Programme
Kathmandu

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Tourism Marketing Tourism Marketing
Strategy for Nepal Strategy for Nepal
2005-2020 2005-2020

1 BACKGROUND

N epal, the mystical Himalayan mountain kingdom


on the roof of the world, has held a very powerful
appeal as a tourist destination. Put simply, it is
Nepal has an immense amount to offer both the
general and special interest visitor and it developed
as one of the world's most fashionable long haul exotic
and Tsensing Sherpa, extensively promoted by the
Nepal Tourism Board, also helped. Recovery has
continued in 2004.
critical means of reaching the consumer) are lacking.

Nepal achieved much on the rising tide of being a


somewhere where many people from a great many destinations through the 1970s, '80s and '90s. During fashionable tourism destination. Now however that
countries would like to visit. Even more powerfully, this period visitor numbers grew from a meagre 45,000 Despite its considerable successes achieved against tide is ebbing fast. It is essential that the government,
once people have visited Nepal, research in the past to just under half a million and the country largely a long-term background of political uncertainty, in the the tourist board and the industry now go Once people have
has shown that a high percentage of these visitors pioneered the concept of trekking tourism. growing Asian tourism economy Nepal is under- out and market the destination in a visited Nepal,
wish to return again and again. Why is this? performing. It is rapidly losing market share in an professional, integrated and strategic way research has shown
Nepal offers tourists a breath-taking experience of that a high
Surprisingly, this growth was achieved against a increasingly competitive world tourism economy. as partners rather than as competitors.
percentage of these
nature and ever-present mountain scenery, including background of considerable political turmoil within Other destinations, in particular New Zealand, have Nepal's competition is outside the country, visitors wish to
Everest, the world's highest peak. Nepal. taken on the mantle of the world's leading eco- and is very strong. Concerted strategic return again and
It is mysterious kingdom once cut off from the world, tourism destination. At present, apart from the marketing effort is now essential if tourism again.
and it has an incredibly rich cultural heritage, both built Tourism's potential can only truly be realised in a obvious problem of negative media coverage, Nepal is to be a driving force for economic growth and poverty
and living. This includes intriguing historic living cities, climate of peace and stability. What has been achieved seriously lacks credible market research as to why alleviation in Nepal.
overflowing with monuments some of which are of in Nepal against a background of instability is exactly its tourism industry is under-
great antiquity. It has many styles of traditional remarkable: What could be achieved in terms of performing and what aspects of the
settlement, all set against some of the world's most employment and wealth creation however, if the product need attention. There has
dramatic mountain scenery. Festivals, often dating country were to achieve a lasting peaceful settlement, been no coherent marketing
from pre-history, still abound and are filled with vitality is a goal which needs to be constantly striven for in a strategy. Regular surveys of
and colour. country where extreme poverty and social deprivation departing visitors are not
Nepal's flora and fauna are truly amazing, both in are at the roots of continuing political unrest. undertaken, so the country cannot
terms of their variety and, in some cases, their rarity. gauge their levels of satisfaction,
The country is blessed by a pleasant year-round Between 1999 and 2002, visitor numbers collapsed unsatisfied wants, spending in
climate, affording stunning mountain views for much by more than fifty percent. 2003 saw some hopeful Nepal or current propensity to
of the year. signs of possible recovery from some markets, in return. Information on potential in
In addition to this the country is peopled by an particular India, as a result of a period of cease-fire existing and new markets is only
unfailingly friendly population who are generally very between the government and the Maoists. Massive beginning to be gathered, and
happy to share their innate hospitality as well as their international publicity for the fiftieth anniversary of the marketing partnerships with the
many customs and traditions with visitors. first conquest of Mount Everest by Sir Edmund Hillary travel trade in these markets (the

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2 NEPAL'S
PRESENT TOURISM
PERFORMANCE

2.1 Visitor numbers biggest producer of international visitor arrivals. Access North America (the United States and Canada) the Tourism for Rural Poverty Alleviation Programme
Nepal received just over 330,000 visitors from outside to Nepal is very easy and there are no visa restrictions. remains an important market for Nepal, although the (TRPAP). Table 2 shows the last data available.
the country in 2003. This figure is very disappointing Japan is Nepal's second most important market in United States' relative importance declined in 2003.
although is an improvement on 2002. It is only three terms of numbers. Traffic from China and South Korea to Nepal has shown Average spending per day was $31 or $727 per trip in
fifths of the 1999 peak of just under half a million The United Kingdom, France and Germany are rapid growth from a small base. China is Nepal's other 2001. In 2002 this latter figure dropped to $512 and
visitors. Table 1 shows this collapse, and where Nepal's consistent producers of long haul traffic, and, long haul near neighbour and is forecast to be the world's biggest recovered in 2003 to $740.
main source markets currently are. access is a critical issue for the future of Napal's generator of outbound tourists by 2020. TABLE 2 Estimated visitor
TABLE 1 Top arrival generating countries to Nepal 2003 and historic growth "Table 2 should be treated with expenditure by market 2001
Country 1998 1999 2000 2001 2002 2003 Rank 2003 It is estimated, based on research undertaken in 2001 caution owing to the small sample Country Per day US$ Per trip US$

India 143,229 140,661 95,915 64,320 66,777 88,813 1 for NTB, that 25 percent of visitors come on a package, size for some countries, however it India 48 520
whereas 75 percent come to Nepal independently. clearly shows the potential of India
Japan 37,386 38,893 41,070 28,830 23,223 25,313 2 Japan 26 620
and China, if additional traffic and
UK 35,499 36,852 37,765 33,533 21,007 23,318 3 UK 22 877
In addition, domestic tourism within Nepal should not be length of stay can be stimulated. It is
USA 35,902 39,332 40,442 32,052 17,518 18,919 4 ignored. There is a relatively wealthy expatriate community vital for planning purposes that NTB USA 40 1182

France 21,992 24,490 24,506 21,187 13,376 16,854 5 based in Kathmandu. In difficult times it is extensively resume visitor expenditure surveys on France 28 748

Germany 23,862 26,378 26,263 21,577 15,774 15,932 6 relied on by many hotels, especially those based outside an annual basis." Germany 26 714
the cities of Kathmandu and Lalipur. There is also a China (PR) 55 588
China n/a 5,638 7,139 8,738 8,715 11,068 7

S Korea 2,786 5,370 8,880 11,568 8,798 10,822 8


growing coterie of wealthy Nepalis who can afford to 2.3 Length of stay S Korea 32 420
take short breaks. On a larger and largely unquantified The average length of stay of people
Sri Lanka 11,031 12,432 16,648 9,844 9,805 9,903 9 Spain 35 895
scale, the immense difficulties of time-consuming internal visiting Nepal was 7.9 days in 2002.
Spain 8,832 9,370 8,874 5,897 5,267 9,481 10 surface travel have resulted extensive tradition of This is considerably shorter than in Source: Nepal Tourism
department (Departing
Board research
Visitor's Survey
Total traditional rest houses, tea houses, basic homestay and previous years. Length of stay right 2001)
Arrivals 463,684 491,504 463,646 361,237 275,468 330,000* hospitality throughout Nepal. through the 1990s had been 10-13 days. The drop to
Source: Nepal Tourism Board research department and MOCTCA *estimated 7.9 days for 2002 is mostly due to the large fall in non-
2.2 Visitor expenditure Indian arrivals, whereas arrivals from India went up.
The following initial points are however worth noting tourism. The United Kingdom is currently more buoyant Lack of up-to-date data on visitor expenditure is a People coming from India have shorter stays than
in relation to the recent performance by market: (or less affected by recent events in Nepal) than its major planning weakness in Nepal. At present the those from North America or Europe.
European neighbours. Switzerland and Austria can be Nepal Tourist Board (NTB) does not undertake an
India, in terms of numbers, is by far Nepal's most consolidated into these markets. annual visitor expenditure survey, although there are As shown in table 3, the longest staying market for
important source market. It is consistently the country's plans to undertake one in 2004 with assistance from 2001 was Australia (17.2 days). India, although the

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TABLE 3 Estimated length of stay by biggest inbound market for reasons make up 5.2 percent. The trend illustrates Very limited consumer survey data is available for
market 2001 Nepal, has much shorter average the substantial growth of trekking and mountaineering Nepal and this is a major weakness. The latest
Country Average number length of stay at 7.2 days. This is tourism. On the one hand it is a considerable information available on reasons for visiting the
of days 2001
not surprising due to the achievement and points us to where Nepal's current Kingdom is outlined in table 5. It is unfortunate that
Australia 17.2 proximity of the market and the image in the marketplace lies. On the other hand 'heritage' and 'wildlife' were not probed separately as
Israel 17 ease of access. though, trekking in Nepal is a product which is largely motivators, because they can appeal to very different
Canada 16.5 Research conducted in 2001 restricted to the October-May period, almost entirely segments. The very important category 'visiting friends
Netherlands 16.5
also shows that independent reliant on long haul markets and increasingly coming and relatives' (VFR) was not being recorded in
visitors on average spend seven under pressure from new, exotic and (in some cases) mainstream NTB research until recently, however,
Germany 16.2 the largest volume market, has little interest in trekking
or eight days longer than better managed and more stable tourism destinations. another survey conducted for NTB in 2001 gives a
USA 15.5 at present, and pilgrimage as a motivator, seems quite
packaged visitors, and those who slightly different analysis, showing that
Thailand 13.5 weak. Holiday and business are the main motivators
stay longest are those coming for Tourist arrivals by purpose of visit and major 42 percent of visitors come for a holiday;
of travel to Nepal. On the other hand pilgrimage from
France 12.9 'adventure' (up to 31 days for nationalities (from 1997) indicate that Indian arrivals 27 percent come for adventure;
Buddhist Sri Lanka is a very important motivator.
UK 12.9 independent visitors). dominate in what is still the largest motivator. Coming 15 percent for business or conventions;
to Nepal for holiday or pleasure purposes. They are 6 percent come to visit friends or relations;
China 11.5
2.4 Reasons for also sources important for official travel, business, 5 percent come on pilgrimage;
2.5 Seasonality
Nepal enjoys a long tourism season and there If overall tourism
Italy 10.6
visiting Nepal conventions and pilgrimage. 3 percent come as volunteers; and
is no time of the year when visitors cease to distribution can be
Republic of Korea 10.5 Visitor arrivals by purpose in the 3 percent for other reasons
come. For the largest volume market, India, made more evenly
Japan 10.3 early 1960s shows that about 87 Japanese, American, German, French, Spanish, Swiss spread through
tourism distribution is quite evenly spread effective tactical
Bangladesh 10 percent of the total visitors came and Italian tourists have holiday or pleasure as their Table 5 illustrates what data is available on reasons
with May, June and December being the peak marketing of
Spain 9.8
for holiday or pleasure purposes, major motivating factor to visit Nepal, followed by for visiting Nepal by country.
months. For higher spending and longer summertime product
followed by official reasons (7.2 trekking and mountaineering. then Nepal’s tourism
Sri Lanka 8 staying long haul markets however, October
percent), business (2.6 percent). It is important to note the strong interest in trekking or industry can improve
India 7.2 is the peak, followed by March and April. This its overall occupancy
Trekking and mountaineering Holiday and pleasure and trekking and mountaineering mountaineering in the largest European markets
indicates a need for a two-pronged marketing and efficiency.
Total 11.9 only accounted for a tiny 0.1 have seen the biggest decline between 2001 and (Germany, France and the UK). In the smaller European
approach, one aimed at India which can be
Source: Nepal Tourism Board research percent. In 2001 however, 52 2002 (both at minus 41 percent). In 2001, these two markets however holiday and pleasure are the main
department price competitive when higher spending markets are
percent of visitors came for categories made up 80 percent of all visitors to Nepal, motivators, as they are in the USA and Japan. India,
absent, and the other aimed at other markets.
holiday or pleasure followed by trekking and but this dropped to 40 percent in 2002. The categories
mountaineering at 28 percent, business accounts for of business, pilgrimage and official only had minor
5 percent, and pilgrimage 3.8 percent and official declines. This is illustrated in table 4.
TABLE 5 Reason for visiting Nepal 2001 (top counties*) Percentages.
TABLE 4 Purpose of Visit 2001-2002 Holiday or Trekking or Business or Pilgrimage Other Total
2001 Percentage 2002 Percentage Percentage change pleasure mountaineering official
2001 to 2002 India 64 - 24 2 10 100

Holiday, pleasure 187022 52 110143 40 - 41.1 Japan 59 30 5 3 3 100


Trekking, UK 43 47 7 - 3 100
mountaineering 100828 28 59279 2 - 41.2 USA 45 40 8 - 7 100
Business 18528 5 16990 6 - 8.3 France 52 43 3 - 2 100
Pilgrimage 12836 4 12366 4 - 3.7 Germany 46 45 6 - 3 100
Official 18727 5 17783 6 - 5.0 Sri Lanka 5 2 3 85 5 100
Other 23296 6 58907 21 + 152.9 Spain 75 21 2 2 100
Total 361237 100 275468 100 - 23.7 All visitors 52 28 10 4 6 100
Source: Nepal Tourism Board research department
Source: Nepal Tourism Board research department *no information available on China or Korea

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CHART 1 Seasonality of tourism in Nepal A very surprisingly high proportion of independent I. public relations; and
visitors at present travel alone (57 percent according II. travel trade marketing
to a 2001 survey carried out for NTB). A high proportion
(23 percent) of packaged visitors travel with friends. It is important to note that holiday shows are not an
The vast majority of 'groups' to Nepal are very small, important source of information for visitors to Nepal
five persons or less. In many other countries this and that the internet is likely to continue to grow in
number would not be large enough to comprise a importance.
group.
2.8 Access to Nepal
2.7 Sources of According to NTB statistics, four fifths of tourist arrivals
information on Nepal come by air, but only one fifth by land. Given the open
The main sources of information on Nepal, according nature of Nepal's land border with India, these figures
to research carried out for NTB in 2001, are as must be treated with some caution. None-the-less,
follows: efficient, cost-effective air access is vital to Nepal's
Overall, word of mouth and personal tourism industry, and in a period of declining visitor
recommendations from friends are the main sources numbers the loss of key access routes is a major threat.
of information. Guidebooks are also important. Less In 2002, the main carriers to Nepal in volume terms
important are travel agents and (at present) the were the following, in order of importance:
internet. RNAC;
For independent visitors, the same sources are Indian Airlines;
used, but there is less reliance on travel agents and Royal Thai Airways;
more on the internet. Qatar Airlines
For packaged visitors in contrast, travel agents Gulf Air;
are hugely important, more so than any other source. Austrian Air;
Biman Bangladesh and
This sharp divide indicates a need for Nepal to China Southwest.
concentrate its marketing activities in two areas:

Source: Nepal's Tourism Industry Strategic Plan 2005 - 2009

If overall tourism distribution, as illustrated historically is ageing. Almost 60 percent of visitors to Nepal were There is need for
at chart 1, can be made more evenly spread through under 45 in 2001, but worldwide, older age groups Nepal to concentrate
its marketing
effective tactical marketing of summertime product are travelling more. Nepal also attracts very small activities in two areas:
(such as city breaks, conferences, hill station resorts numbers of children (only 4 percent of visitors were I. Public relations;
and spas) then Nepal's tourism industry can improve under fifteen in 2001). In a country which is so II. Travel trade
its overall occupancy and efficiency. obviously child-friendly, this is indicative of an image marketing
and product deficiency. Nepal has not invested enough
2.6 Demography in family-friendly product such as picnic areas,
The demographics of visitors to Nepal have shown a playgrounds, child-friendly museums and other leisure-
slight male bias (60 percent of visitors were male in learning facilities, nor has it marketed itself as a family
2002) This is consistent with a country whose image destination to tourism markets like India where large
has been built on trekking and mountaineering. families will travel together.
Younger age groups also predominate, but the market

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Singapore Airlines, Druk Airlines and a number of importance recorded in a 2001 survey) are: Association of Nepal (HAN) indicate that actual overall available in hotel accommodation, 23,120 of which
others also carried small volumes. Martinair Nagarkot; annual bed occupancy is likely to be below twenty five were in Kathmandu. The extent of lodge, hotel, tea
commenced an additional European service in Annapurna; percent, with considerable implications in terms of house and other forms of unclassified tourist
October 2003 and Singapore has ceased operating to Chitwan; operating efficiency of the country's bedstock and accommodation is not quantified, but is quite
Nepal. In 2004 Jet Airways connected Kathmandu to Everest; inability to re-invest. In 2002 there were 37,616 beds extensive.
its extensive Indian network: This represents a Dhulikhel;
significant marketing opportunity for Nepal. Lukla;
Langtang; and 2.11 Key
issues arising in the review of tourism
Qatar Airlines and Gulf Air are particularly important Lumbini. performance
for European access at present. Thai Airways is the
most important carrier for North America and Japan. For adventure tourist however, the top three regions  Growth is possible, despite political unrest. However exploiting the full potential of Nepal's
The operation of a low cost, frequent service, air are Kathmandu, Pokhara and Annapura, followed by strong tourism product does require peace.
corridor between Delhi and Kathmandu would be a Patan and Bhaktapur. Of other regions Everest is the  There is an urgent need to market Nepal in a professional and concentrated way in order to
huge step forward for tourism. Cities from which next most popular and surprisingly few adventure impact an increasingly competitive market and re-capture lost business.
passengers arrive in Nepal, in order of importance in tourists mentioned Chitwan or other areas in this  There are significant gaps in research data on Nepal's tourism performance.
2001 were: Delhi, Bangkok, Banares, Doha, Lhasa, survey.  India is Nepal's most important source market in terms of numbers and the ability to address
Singapore and Abu Dhabi. Singapore's figure declined uneven seasonality.
dramatically in 2002 as the airline withdrew its service. 2.10 Occupancy  Japan is Nepal's second most important market in terms of numbers, and importantly attracts
Lhasa is an indication of the importance of Nepal- There is no comprehensive data available on hotel or higher spending tourists.
Tibet joint destination holidays: The routing is usually guesthouse/lodge occupancy in Nepal. NTB has  The United Kingdom, France and Germany are consistent producers of high spending, long haul
Kathmandu-Lhasa-Kathmandu). estimated occupancy in 2003 at thirtyfour percent tourism.
overall, however this calculation was arrived at by  China and South Korea have long term potential.
2.9 Distribution of comparing arrivals to bed stock. It assumes that all  Declining length of stay is an issue of concern.
visitors within Nepal overseas arrivals use certified serviced  Tibet is often combined with Nepal as a holiday option.
The most popular tourism areas within Nepal are accommodation, but this assumption is not proven.  Business and pilgrimage tourism are less affected by the recent downturn in tourism to Nepal.
Kathmandu, Patan and Bhaktapur, the three historic Also not all accommodation is certified and the  Uneven seasonal distribution of tourism is a challenge which marketing and product
cultural cities. Outside Kathmandu, Pokhara is the calculation does not consider bed occupancy. It is development must address.
most popular destination. Thereafter (in order of therefore seriously flawed. Discussions with the Hotel  Developing better access both internally and externally needs to be a priority for tourism
development.
 Very low levels of hotel occupancy are a major concern.

The operation of a low


cost, frequent service,
air corridor between
Delhi and Kathmandu
would be a huge step
forward for tourism.

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3 HOW NEPAL HAS


BEEN MARKETED

3.1 The image of Nepal The establishment of the Nepal Tourism Board, bringing Intense competition between Nepalese ground Nepal's main selling points are by tour operators as
The image of Nepal as a tourism destination has never together the government and private sector, has been operators for overseas business has resulted in an mountains (40 percent); beautiful nature (40 percent);
been centrally marketed in a strategic way. Tourism a major step forward. The Board has achieved much in unwillingness to market jointly overseas, and a failure friendly people (39 percent) cultural diversity (37 percent)
has grown here largely because Nepal was five years. It has established a strong co-ordinating role on the part of the travel trade in Nepal to join forces to and adventure tourism (22 percent). Nepal's strengths
fashionable, due to high profile celebrity visits to places despite modest resources. This critical central role now address competition which lies outside Nepal, not are seen as scenic beauty, friendly people, mountains,
like Chitwan and Kathmandu and the country's opening needs to be given strategic direction to deliver growth. within it. culture and a low cost base within the country.
up after hundreds of years of isolation. Private sector There has been a long term failure to invest in
individual entrepreneurs, both Nepali and foreign, There remain however a number of inherent market research to inform marketing strategy and to Weaknesses identified by tour operators include
seized the opportunities which tourism presented and weaknesses in the marketing of the destination, which guide product development initiatives as to future political instability, poor air connectivity,
The establishment of
as a result a vibrant Nepali tourism industry developed need to be addressed. These are as follows: market needs. unprofessional behaviour by some involved the Nepal Tourism
in a way which, at the time, was market-led. Good Short-term and varying tactical initiatives have been Tourism disferal has not been adeqately blamed for. in tourism, poor infrastructure and a failureBoard, bringing
personal relationships were established between undertaken in the absence of any co-ordinating long to preserve nature. together the
Nepalese ground operators and tour operators government and
term strategy or detailed market research. (A similar Nepal's tourism image was created by those who were
private sector, has
overseas, and these became the key component of problem exists in relation to regional tourism introducing new product, not through a concerted Most tour operators surveyed identified an been a major step
Nepal's marketing effort. development where initiatives by various aid agencies national spatial strategy. Some aspects of the product, urgent need to market Nepal both to the forward.
are not co-ordinated by a national tourism such as the country's incredible cultural riches and consumer and through closer ties with tour operators.
Nepal in the 1970s and '80s was at the forefront of development plan). ethnic diversity are under-protected and almost taken
environmentally-based tourism and initiatives like the Regularly changing marketing messages are for granted. UNESCO recently placing the World 3.2Nepal Tourism Board
Sagarmartha Project helped to develop this into creating a blurred image in the marketplace. Heritage Site of the Kathmandu Valley on its marketing
practical sustainable tourism. The international travel There is insufficient contact with the international endangered list sadly illustrates this point. The Nepal Tourist Board Act of 2053 BS (1997) and the
trade, attracted by pioneering individual entrepreneurs travel trade in main markets, especially at national Regenerating practical national pride in these assets establishment of the Nepal Tourism Board (NTB) in
with support from the newly created Tourism Ministry, tourist board level. will be a strategic necessity for the future of tourism, December 1998 was a considerable step forward for
succeeded in attracting a wide range of tour operators There is a need to expand professional public as there is a clear need to broaden Nepal's appeal if it Nepal's tourism industry. Although it has inherited a
(primarily from America and Europe) to feature Nepal. relations representation for Nepal's tourism product is to win back high volumes of visitors. deteriorating market environment, with a young and
Very positive word-of-mouth reports, evidenced by high in key markets. enthusiastic staff NTB is actually quite well placed to
numbers of repeat visitors, helped to market the An uncertain and inadequate national tourism In the absence of detailed consumer research into address many of the weaknesses outlined above. The
country and achieve steady growth. It became marketing budget is a key weakness. consumer satisfaction or perceptions of Nepal, an purpose of this marketing strategy is to help them, in
fashionable to trek in Nepal and even today this The demise of almost all non-stop direct air access internet-based survey of 118 tour operators was partnership with Nepal's multi-talented tourism industry,
perception remains. from Europe has significantly weakened Nepal's undertaken in 2004 through TRPAP. This shows that to do so.
competitive position and market profile.

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NTB publishes is operational plan on a year by year NTB needs to become more outward-looking 'represent it', or at least to service enquiries, in overseas sector airlines commencing operations from The main partners in
basis. The following points are important to note as (looking to the overseas tourist trade and, through markets. There are at present over fifty such India is a significant current opportunity. consumer markets
for disseminating
future marketing strategy is planned: them, to the consumer) and less inward-looking (reliant organisations, ranging from Royal Nepal Embassies information about
NTB has developed a highly commendable partnership on the tourism industry within Nepal for guidance). to volunteers. Only those organisations who can NTB's marketing mix is currently unbalanced and Nepal should be a
approach to decision making, extensively involving industry Such a shift is essential so that NTB will be able lead present a professional image should be used in this too heavily focussed on attending trade and range of tour
representative associations and the private sector the industry in Nepal, not simply follow it. way. The main partners in consumer markets for consumer shows. Insufficient attention is being operators.
generally in planning marketing activity. This is an important More joint NTB-carrier marketing activity is needed, disseminating information about Nepal should be a paid to generating positive public relations through
achievement and needs to be built upon, and expanded especially with those airlines which have the most range of tour operators, not Embassies. professional agencies: A concentration on public relations
beyond Nepal to include international tour operators and extensive marketing reach. A member of pilot districts for tourism development is essential for national tourist boards with modest
main market carriers. It is also desirable that somewhat Organisations consulted in the international travel have been initiated by TRPAP and NTB. budgets. Table 6 outlines NTB's current marketing mix.
unwieldy consultation structures be rationalised to reflect trade are quite critical of an over-reliance on travel shows For most tourist boards however, there is a more even
a more focussed marketing approach. and lack of regular in market contact. A review of the Since 1999, NTB has built its marketing around two spread of expenditure and increasing attention is being
A Nepal tourism brand needs to be developed and Board's current marketing mix supports this view. advertising slogans. These were: paid to the internet as a marketing tool.
consistently applied across all NTB activity. The brand will NTB needs to study how other national tourist Mount Everest … and more; and
need to adopted by the tourism industry. boards market. Much can be learned from highly Mystical Kingdom … Destination Nepal Table 6 clearly shows that NTB's marking mix is
NTB has run some very well designed joint trade-tourist successful Asian tourism initiatives such as Thailand, unbalanced towards exhibitions and tradeshows, the
board initiatives, such as the Mount Everest Golden Jubilee Malaysia, India and Sri Lanka. Training placements for The first of these slogans was timely in that it helped to effectiveness of which are very difficult to monitor. It is
Campaign, the Pashupati Darshan Package and the 5 star NTB staff in other national tourist boards should be capitalise on the fiftieth anniversary of the first questionable marketing policy for a national tourist
package campaign in India during the summer of 2003. sought: NTB can also teach much to other countries, successful ascent of Mount Everest, and Everest is TABLE 6 NTB marketing mix 2003-4
These types of activity need to be further developed in in particular in relation to public-private partnerships certainly an icon image for Nepal. It reinforces an Activity 2003-4 (10 months) Percentage
other key markets. and rural tourism development. inspiring and well known image of the destination and NRs
(regular budget plus
NTB needs to further expand its knowledge of current A national destination marketing website needs to would seem to have been quite effective in markets
regional marketing fund)
developments in the tourism industry in Nepal's main be developed. This is a key marketing tool for the future like Britain (where some national pride, despite Hillary
Internet development 480,000 1.7
source markets. This means developing stronger and should not be confused with a corporate NTB being from New Zealand, and nostalgia were evoked).
relationships with the key tour operators in each market, website. Investment in internet marketing, the fastest In Germany also, very useful market research Market research 195,296 0.5

and monitoring outbound tourism trends and tourism growing tourist board marketing activity worldwide, has commissioned for NTB through German aid, has also Publications 7,288,743 24
related media in them through a stronger research been very low. supported this campaign slogan. But the Everest image Exhibitions 15,065,471 49
department. At present, NTB uses a range of organisations to can also be considered macho, adventure-orientated, Media support and PR 4,840,641 16
snowbound, and likely to stimulate mostly
Advertising 2,261,390 7
mountaineering and trekking. Developing single image
Tour operator support 525,297 1.8
destinations is also high risk, and there is a need to
broaden Nepal's appeal if high growth is to be achieved Total 30,656,838 100
in the future. Source: Nepal Tourism Board Marketing Department.

board to spend almost 50 percent of its marketing


The second slogan, Mystical Kingdom, was developed budget attending fairs and exhibitions. Lack of Nepal
A Nepal tourism tourism industry support at some trade shows (where
for Destination Nepal campaign and continues to be
brand needs to be
developed and used. It is softer and also evocative. there are only one or two private sector partners) is a
consistently applied strong indicator of how effective the private sector sees
across all NTB As noted above, joint marketing activity with tour these events. It is however not a question of cutting the
activity. The brand
operators and airlines is seriously under-developed. NTB exhibitions budget, which in national tourist board terms
will need to adopted
by the tourism has a good relationship with the national carrier RNAC, is very small, but if using it more effectively to attend
industry. but regular marketing partnerships with other carriers, those shows which the private sector will support in a
in particular those serving the high value markets of stronger way, backed up by other elements of in-country
Europe and North America, need to be developed marketing. The need it to increase expenditure in all
further. The potential of joint marketing with private the other areas of the marketing mix.

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Strategy for Nepal Strategy for Nepal
2005-2020 2005-2020

Key issues of concern are: NTB's declining overall resources for marketing at realistically address the challenge to extend the length explored and the ideal partnership would include Tibet,
Lack of investment in internet marketing, the fastest the very time when Nepal needs aggressive of stay and regional dispersal of visitors, by offering Nepal is often its gateway and both destinations are
growing national tourist board marketing activity; marketing to recover lost ground. them more to see and do. combined by tour operations.
An under-resourced research department;
Clear evidence that the Board is not Lack of financial resources has resulted in NTB not being Plans for rural tourism development are being progressed A recent study commissioned by the Asian
initiating joint marketing activity with able to appoint professional public relations agents in by initiatives like TRPAP and through NTB's tourism Development Bank on South Asian sub-regional co-
overseas tour operators: These arevital for a tourist key markets such as Japan, the United Kingdom, product development department. Marketing these operation (SASEC) has identified opportunities to
board with no in-market consumer interface. Germany and France. The Board is at present unable to initiatives is at an early stage and is being hampered by jointly promote eco-tourism and Buddhist circuits in
afford to mount any effective marketing in key high political difficulties in rural areas at present. The Bangladesh, Bhutan, north and north-east India and
A survey of 28 national tourist boards1 from Europe, value markets such as France, the United States and establishment of a Sustainable Tourism Development Nepal. Whilst the Board's priority must remain the
Asia, Africa, North and Latin America has indicated Australia. This will continue to result in significant loss Unit within NTB is a welcome co-ordinating step. marketing of Nepal itself, initiatives like SASEC can
that tourist boards generally between 2001 and 2003 of market share as better resourced national tourist offer potential.
have increased their expenditure as follows: boards target these key high value markets for Nepal. There is however a need for an overall national tourism
internet up by 61 percent; dispersal strategy based on a proper tourism audit of The following guidelines should be considered by
TABLE 7 Visitor numbers and NTB revenue 2000 versus 2003-4
brochures and direct mail up by 47 potential attractions, regional accommodation stock, NTB in relation to joint marketing:
NTB accounting year 1999-00 2002-03 2003-4*
percent; growth projections and future national infrastructure The Board's primary responsibility is to market
Visitor numbers 491,504 330,000 420,000
exhibitions up by 34 percent; development plans. Nepal: Only initiatives which can clearly demonstrate
media support up by 30 percent; Tourist Service Fees 100,728 .50,000 70,000 potential additional business and value for money for
(NRs '000s)
public relations up by 17 percent; and 3.4International co- Nepal should be supported.
tour operator support by 14 percent. Fee per visitor (NRs) 205 152 167
operative marketing of Opportunities for joint in-market promotion should
marketing budget
(NRs '000s)
90,660 .25,974 26.059 Nepal be welcomed, provided they are in line with NTB's own
The internet is expected to show the fastest Nepal is often combined by the long haul consumer product development and marketing strategies.
continued growth in terms of national tourist Additional None 29,000 23,100 (Regional with holiday destinations such as India and Tibet. To a Joint marketing initiatives must take into account
government funding (Destination Nepal Marketing
board expenditure. During the same period lesser extent it is sometimes combined with Bhutan. the reality of visitor distribution patterns in the region.
(NRs '000s) campaign) fund)
NTB's marketing budget has declined 30 The possibilities for international partnerships in
percent: Since 1999-2000 it has declined Total NTB marketing marketing the Himalayan region are at present being
by 52 percent. funds 90,660 54,974 43,159
(NRs /$ '000s) ($1,269) ($763) ($599)

NTB is primarily funded by the 2 percent Marketing


3.5 Key issues arising in the review of marketing
tourist service tax. Falling visitor numbers expenditure
per visitor (NRs) 184 166 103 The establishment and maturing of NTB creates an opportunity to strategically direct the
until 2003 (and more importantly, the 

continuing fall in tourism revenues and Source: Nepal Tourist Board research and marketing departments marketing of Nepal as a tourist destination.
Note: * estimates.
shortening length of stay) have resulted in There is a need to create and consistently apply a branded approach to destination marketing.
significant erosion in NTB's resources, and in particular 3.3 Regional marketing NTB needs to become more outward looking in its marketing and planning of marketing
its resources for marketing. In the first year of the of Nepal (looking to the needs of the international travel trade and the consumer).
Board's existence 90 percent of its own revenue was Local authorities, even those within the Kathmandu Lack of investment in market research is a major concern.
spent on marketing: By 2004 this figure has slipped Valley, do not have visible tourism marketing NTB needs to develop marketing partnerships with international tour operators and main
to 61 percent. programmes. Small scale initiative often centred on market carriers.
festivals are undertaken, and quite successful A greater spirit of co-operation and joint marketing needs to be developed in the private sector.
In 2003 in recognition of the Board's funding shortfall websites have been developed by tourism The adoption of a Nepal brand can create an opportunity for this.
for marketing, and in the light of falling visitor associations such as in Thamel and Pokhara and by The Board's country focus in terms of marketing activities needs to pay greater attention to high
numbers in key markets, His Majesty's Government the laudable Destination Manang campaign. However value markets.
provided additional resources, firstly for the a country which is so rich in cultural sites, ethnic variety An uncertain and under-resourced national tourism marketing budget is a critical barrier to
Destination Nepal campaign and secondly for and scenic beauty will need in the future to develop tourism growth.
marketing in near Asian markets. Table 7 illustrates an integrated regional tourism strategy if Nepal is to

16 1
Totem Tourism Marketing 2003 17
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Strategy for Nepal Strategy for Nepal
2005-2020 2005-2020

4 TARGETS FOR
FUTURE GROWTH

4.1 Approach to growth poverty reduction agenda. During these years the numbers from China actually rose slightly in 2002. Nepal's traditional high value markets are the United
Because of the need to remedy constraints foundations will be laid for an expansion of Nepal's It is a critical strategic priority to investigate how and Kingdom (UK), Japan, France, German-speaking Europe,
identified in chapters 2 and 3, the pool state of tourism product spatially as pilot areas developed by to what extent Nepal can capitalise on this growing Benelux, North America and Australia-New Zealand.
Nepal’s transport infrastructure and the current TRPAP and NTB begin to emerge. interest. These provided 40 percent of arrivals in 2003.
unstable political climate, growth projections for
tourism to Nepal are initially quite conservative. They ii. From 2010 on , it is virtually impossible to make v. Australia and New Zealand are important markets Developing markets (China, South East Asia, Southern
must take into account the need to remedy product accurate predictions for growth trends, but the and have particular potential during their hot summer Europe and Scandinavian) provided 16 percent of
deficiencies identified in Nepal's Tourism Industry underlying product strengths of Nepal and the predicted months. Attention will need to be paid to them if growth arrivals in 2003.
Strategic Plan2 . The projected growth scenario must emergence of its neighbour China as the world's is to be optimised.
also take into account the time needed to create a number one generator and receiver of tourism by 2020, By 2009, it is projected that visitor numbers will have
brand image for the destination, and the need for allow continued positive growth to be anticipated, vi. Recovering tourism growth from foreign markets doubled from there 2003 levels, to over 680,000
NTB to adapt its marketing approach in partnership provided this market is accurately researched. further afield (Europe, North America) is a major arrivals, and by 2010 Nepal will have over three
with the industry and overseas tour operators and challenge. Nepal had a good foothold in these markets quarters of a million visitors. The Marketing Strategy is
carriers. Tour operators have long pre-planning lead iii. Tourism from its southern neighbour India is, and but this has been lost in recent years. However because therefore aiming to achieve the higher growth
in times and will need to be persuaded to return to will remain, by far the most important source of visitors of the importance of long haul in terms of potential projection target outlined in the Nepal's Tourism
Nepal's traditional
featuring Nepal. to Nepal. Within this vast market increasing wealth, visitor spend, these markets need to become the Industry Strategic Plan 2004-2009. Before this
high value markets
mobility and the desire to travel initially to nearby particular focus of marketing activity. The challenge target is reached there are significant are the United
As a result this marketing strategy is built upon the places, allow steady growth to be predicted. and cost of creating new relationships in the face of implications in terms of carrying capacity of Kingdom (UK), Japan,
following assumptions regarding NTB's marketing focus: mounting competition from other long haul exotic product and spatial development which will France, German-
speaking Europe,
i. The initial scenario is recovery. Nepal's tourism will iv. The fastest growing tourism region in the world is destinations should not be underestimated. require strategic development planning. Benelux, and North
build back to its 2000 peak and meeting the targets the East-Asia/Pacific region, with a recent growth rate America.
set for NTB by His Majesty's Government for 2006. of 8.4 percent and a market share rising to fifteen 4.2 Projections of visitor The target suggested for 2015 is to achieve
Special emphasis will be given to India percent. (Europe remains the world's most popular arrivals and subsequent over a million visitors and 1.5 million by 2020.
where better access will be a key to growth. The tourism region, but its share is steadily falling and is employment
foundations laid for future growth in Asia. The Board now below 60 percent). Strong growth in tourism The first projected milestone for visitor growth is to A recent study3 estimates that each tourist to South
will give emphasis to re-establishing contact with between Asian countries is likely to continue, meet the NTB target for 2006 by getting visitor Asia supports 3.5 jobs directly and 1.5 jobs indirectly.
mainstream high value markets in Europe, North especially in the East-Asia region. Nepal has already numbers back to 1999 levels. It is envisaged that the Based on this conservative estimate, tourism in Nepal
America and Japan. In these markets emphasis will seen rapid growth from a small base from China, Korea driver for this growth will be India, which provided 27 will support 3.7 million jobs by 2010 and 7.4 million
also be given to marketable product with a strong and, to a lesser extent, Thailand. Indeed, visitor percent of all visitors in 2003. jobs by 2020.

18 2
presented in draft to the Ministry for Culture, Tourism and Civil Aviation by the Tourism for Rural Poverty Alleviation Programme in May 2004. 3
SASEC Tourism Plan 2004 (draft) covering Bangladesh, Bhutan, North East India and Nepal, Tourism Resource consultants. 19
Tourism Marketing Tourism Marketing
Strategy for Nepal Strategy for Nepal
2005-2020 2005-2020

4.3Market growth High Value Markets Through better marketing, France is expected to Europe (Spain, Italy and Scandinavian).
assumptions By 2020 Nepal's high value tourist generating markets increase its growth rate from a long term historical In 2003 these markets provided 16 percent of visitors
Detailed visitor projections by market are outlined at (UK, Japan, France, German-speaking Europe, rate of 3 percent to 5 percent to 2006. 6 percent to Nepal, but this is projected to increase significantly
the appendix. These figures are based on the following Benelux, North America and Australia-New Zealand) growth is expected to 2010 and thereafter an annual to 22 percent by 2010 .
market assumptions, which are of course subjective will be providing one third of all visitors, increasing rate of 7 percent is assumed, giving 69,000 visitors
so should be treated with caution. from 130,000 visitors to almost half a million. by 2020. i. China
China will be the main driver of growth from Nepal's
Volume markets i. Japan The German-speaking markets of Germany, Austria and developing markets. It will give strong growth of 20
By 2020 India will be supplying almost half a million The historical annual average growth rate from Japan Switzerland have shown slowing growth rates with and percent per annum from a very small base of 11,000
visitors (24 percent of Nepal's total), a drop in current to Nepal between 1988 and 2002 has been 6 percent. an average annual growth rate of 2 percent between visitors in 2003. The growth rate will accelerate to 30
market share as other Asian markets emerge. The high cost of marketing in Japan is a barrier, but it is 1988 and 2002. NTB is targeting activity in 2004 here percent per annum after 2006 as the vast Chinese
projected that this growth rate can be increased to 8 and it is assumed the growth rate can be increased to middle class travels more. By 2010 China will be
i. India and Sri Lanka percent in 2005-6, and to 9 percent to 2010. After 4 percent to 2006 and 7 percent thereafter. These providing Nepal with 68,000 visitors. By 2020 this
The average annual growth rate of visitors from India 2010 Japan's ageing population will have more leisure markets will be providing 74,000 visitors by 2020. figure will have increased to 212,000 or 14 percent
to Nepal historically between 1988 and 2002 has time, and a long term growth rate of 7 percent per The Benelux countries and the Netherlands in of Nepal's total.
been 2 percent. It is assumed that with better access annum is assumed to 2020. Nepal will be attracting particular has a strong affinity for Nepal and have Developing markets
ii. South Korea for Nepal are defined
and targeted marketing this can be increased to 9 94,000 visitors from Japan by 2020. historically grown at a long term rate of 8 percent per as China, South
percent for 2005-7. This growth rate will further annum. This rate is expected to continue until 2010 The Republic of Korea is also expected to give Korea, the south
accelerate to 12 percent between 2008 and 2010 ii. Europe after which 7 percent annual growth is assumed, giving Nepal strong growth. 7 percent growth is Asian markets of
as 'open skies' policies reach the region and the Indian The UK has historically grown at an average annual rate 47,000 visitors by 2020. expected to 2006, increasing to 12 percent to Malaysia, Singapore
economy continues to prosper. Similar rates will apply of 4 percent over the past 14 years. It is projected that 2010. Thereafter a rate of 7 percent is assumed and Thailand, and
emerging markets of
to Sri Lanka. After 2010 it is very difficult to project with more focussed marketing this can be increased to iii. North America resulting in 50,000 visitors by 2020. Europe (Spain, Italy
growth, but a more modest 5 percent growth rate is 8 percent to 2006 and by 9 percent between 2007 North America has a long term growth trend of 3.5 and Scandinavia).
assumed from Nepal's biggest market. and 2010. Thereafter an annual growth rate of 7 percent. Owing to negative travel warnings this growth iii. South East Asia
percent is assumed, giving 94,000 visitors by 2020. is assumed to slow to 2 percent until 2006. From Malaysia is expected to grow at a rate of 7 percent
2007 a recovery to 5 percent is assumed, based on until 2006. From 2007 to 2010 much stronger growth
NTB resuming marketing activity. The overall assumed is expected as Nepal penetrates this prosperous
average growth rate of 7 percent will apply after 2010 market with continuing good access. From 2010 the
resulting in 76,000 visitors by 2020. annual growth rate will fall back to 7 percent resulting
in 23,000 visitors.
iv. Australia and New Zealand
Little marketing activity has been undertaken in Singaporeans are cautious of travel to areas with
Australia by NTB. The long term growth rate over the political difficulties, so a low growth rate of 2 percent
past 14 years to 2002 has been just 1 percent. is projected until 2006. Thereafter a stronger rate of
Australia is seen as having potential for Nepal and, if 10 percent is assumed, falling back to 7 percent after
By 2020 Nepal's high marketing activity can be stimulated with partners, a 2010, resulting in 12,000 visitors.
value tourist growth rate of 4 percent is predicted to 2006,
generating markets
(UK, Japan, France, increasing to 6 per cent by 2010. Thereafter the overall A low growth rate of 5 percent until 2006 is also
German-speaking assumed average growth rate of 7 percent will apply projected from Thailand for similar reasons to
Europe, Benelux, after 2010, giving 33,000 visitors by 2020. Singapore. From 2007 more bullish growth of 10
North America and percent per annum is predicted, particularly relating
Australia-New
Zealand) will be Developing markets to Buddhist pilgrimage and leisure, From 2010 the
providing one third of Developing markets for Nepal are defined as China, general annual rate of 7 percent applies, giving 39,000
all visitors, South Korea, the south Asian markets of Malaysia, visitors.
increasing from
130,000 visitors to Singapore and Thailand, and emerging markets of
almost half a million.

20 21
Tourism Marketing Tourism Marketing
Strategy for Nepal Strategy for Nepal
2005-2020 2005-2020

iv. Other Europe Although Kathmandu will remain the hub of visitors to It is recommended that NTB research department in 4.9Monitoring and
Other European countries like Spain, Italy, Sweden and Nepal, the one of the objectives of a poverty-alleviation partnership with the Hotel Association of Nepal initiate review
Finland are expected to grow at a rate of 4 percent based strategy must be to spread tourism across the an ongoing monthly occupancy survey by region as a The method adopted is based on multiple assumptions
until 2006, 6 percent until 2010 and 7 percent country in a more widely dispersed way. This can be matter of urgency to feed into the development of regarding future growth rates, source markets their
thereafter. remarkably difficult, and is of course dependent on future Tourism Master Plan. economic prosperity, their propensity to visit Nepal and
peaceful conditions in new areas and the development their ability to be targeted successfully through NTB
There are no reliable estimates of internal domestic of access infrastructure to them. The marketing focus 4.8 Visitor spend targets marketing. Because of this it is essential that a periodic
overnight tourism in Nepal (i.e. bednights created by can help to achieve spatial spread by emphasizing the Owing to a lack of reliable baseline trend data relating review process is put in place by NTB and
residents from within Nepal ), although these are selected districts' product strengths, provided they have to visitor expenditure by market within Nepal, communicated to the government to ensure that
growing in importance to Nepal's hotel industry In these product that is likely to meet the needs of the market. projections for changes in visitor expenditure have also targets set for the Board remain relevant and realistic.
circumstances it is not possible to project future Pilot areas for tourism dispersal have been identified not been made. The Nepal's Tourism Industry Strategic
growth, and it is recommended that NTB by TRPAP and NTB, but a long term strategic visitor Plan highlights urgent need to prepar tourism satellite
The marketing focus carries out research into this segment in 2005. distribution plan based on future road and air transport accounts for Nepal and TRPAP is planning to assist a
can help to achieve development policy, a comprehensive county-wide comprehensive visitor expenditure survey in 2004.
spatial spread by
It should be noted that projections are audit of potential new product and taking into account
emphasising the
selected districts' vulnerable on multiple variants such as future accommodation needs will be needed in the 4.10 Key issues relating to tourism growth
product strengths, economic conditions, political developments medium term.
provided they have within and outside Nepal and access: Beyond
product that is likely The marketing strategy will aim to meet the government's target of achieving over half a million
to meet the needs of 2010 they are highly speculative. It is therefore 4.6Inter-Himalayan visitors by 2006.
the market. essential that figures are treated with caution, tourism The marketing strategy will aim to double visitor numbers by 2009 and the higher growth
and targets reviewed each year. A hidden tourism export for Nepal is the income projection option outlined in Nepal's Tourism Industry Strategic Plan will be achieved.
earned by Nepal's handling agents for packages to A key objective will be to improve the seasonal and geographic spread of tourism and to
4.4 Targets for seasonality neighbouring Himalayan countries. In particular to Tibet highlight pro-poor tourism product, where marketable.
Tourism to Nepal is at present peaked in the March- this business should be fostered, and the length of After 2010 visitor projections are highly speculative and the need for a comprehensive spatial
April and September-October periods, when the time spent in Nepal en route to other countries tourism development and investment strategy is highlighted.
weather is most pleasant and best for trekking. June- expanded. This must also be addressed in the The need for ongoing research into visitor expenditure and regional occupancy is highlighted.
July-August is the low season due to the annual marketing strategy. There is however a research gap It is estimated that 7.4 million jobs in Nepal could be supported through tourism by 2020.
monsoon. This has significant implications for the in estimating the value of these earning to Nepal's
efficiency of tourism operations and the provision of economy, which NTB research department should
full time employment. address in co-operation with trekking and other travel
agents.
Changing this overall pattern is a key challenge, and
the message about Nepal's cooler summer weather 4.7Visitor bed night and
needs to be communicated to key target segments occupancy targets
such as the hot and dusty cities of India's great plain, Lack of research data into this vital aspect of tourism
and eventually to the sweltering heat of Beijing and development planning nationally and regionally has
other Chinese cities. Achieving a more even seasonal hampered the development of targets in this regard. It
spread is therefore a very important consideration for is assumed however that occupancy levels nationally
the marketing strategy. are in the region of 25 percent, indicating that future
accommodation development in Nepal would be
4.5 Targets for visitor highly speculative until visitor numbers recover. This
distribution low occupancy figure underlines the urgent need for a
At present visitors are concentrated in Kathmandu, more focussed and better funded national tourism
Chitwan and Pokhara areas with secondary areas being marketing strategy in the future.
trekking districts like Annapurna and Sagarmartha.

22 23
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Strategy for Nepal Strategy for Nepal
2005-2020 2005-2020

5 MARKETING STRATEGY
FOR NEPAL'S TOURISM
INDUSTRY

5.1 General principles A significant increase in marketing effort is needed to under pressure due to violence and political unrest It will involve recovering lost ground in main value
This strategy is based on a phased approach to growth make the industry more viable. Nepal must create a and from competition due to better resourced markets, and achieving a significant growth in visitors
taking into account the time required to create a fresh tourism brand whose values attract a much wider marketing of other destinations in Nepal's key from near Asian and Australian markets.
destination image and brand and a recognition that clientele than at present. markets. Nepal is under performing as a tourist
Nepal's infrastructure and tourism product will require destination. Influencing the image of Nepal through It will involve fostering referrals and encouraging repeat
development as visitor numbers grow. Whilst the Indian market will remain the most more effective marketing is therefore critical. visits to Nepal, both amongst current visitors and
important numerical or volume market for Nepal, former, aging ones.
Initial concentration is placed on the Indian and efforts must be made to genuinely research the needs The following three objectives summarise what NTB
developing near Asian markets where there is less of Nepal's other large neighbour, China, so that product will achieve through marketing in partnership with the It will involve giving priority to marketing products which
sensitivity to current political difficulties in Nepal. Asian can be put in place to capitalise on the anticipated industry. can attract visitors in the low reach and encourage
markets are also seen as important in laying the significant outbound tourism growth from this market. Recover and expand the overall volume and value industry incentives for doing so.
foundations for more expansive marketing South Korea likewise offers some potential. of tourism to Nepal, by concentrating on the country's
programmes in due course. It is vital however to win inherent product strengths, its Himalayan location, It will involve targeting new growth from pilgrimage,
back lost business from long haul markets, and the Selected long haul markets must also be targeted, as unique culture, climate, history, natural environment meetings, incentives, conventions and
Nepal must create a
difficulty of doing this should not be underestimated priority must given to these segments which are likely and friendly peoples. events (MICE), business and sports tourism brand whose
as many new trekking destinations now offer strong to give the best returns through spend and length of Reposition Nepal firmly as a varied and multi- tourists. values attract a
competition. stay, and thus added value to the economy. faceted destination, with world class cultural tourism much wider clientele
than at present.
and special interest tourism products, in addition to It will involve improving the spatial
Promotions and packages will be built upon product which Markets which can help improve seasonality will be reclaiming Nepal's position as one of the world's leading distribution of visitors within Nepal through marketing
can be reliably delivered to specific target markets. given priority also. destination for nature and adventure; and exposure, and fostering the growth of new tourism
Improve seasonality and the spatial distribution of areas, such as those being developed by TRPAP and
The tourism scenario envisaged in this marketing After 2010 it is very difficult to forecast trends, but it is visitors within Nepal and foster the growth of new NTB.
strategy is built upon the commencement of recovery envisaged that Nepal, with continued well-planned tourism areas.
in 2004. The immediate objective is continued recovery marketing and peace, can recapture its former profile When these objectives are achieved Nepal will have a
and consolidation, as Nepal re-establishes contact with of long term, steady tourism growth. Achieving these objectives will involve restoring better balanced tourism product, a less peaked
lost markets and adopts a co-ordinated approach to Nepal's image as a peaceful place which is a tourism season, and a significantly more viable, multi-
marketing. Renewed personal contact will be required 5.2Overall marketing fashionable "must see" destination, and achieve faceted tourism industry which will support greater
with key deliverers of business to Nepal, especially the objectives positive growth in visitors from higher-spending long employment.
trekking operators and group tourism providers. At present Nepal's image as a holiday destination is haul markets.

24 25
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Strategy for Nepal Strategy for Nepal
2005-2020 2005-2020

It will not however be possible to achieve all of these positioning carried out in 2001 compared Nepal with a It is important to note that this was a survey of visitors from TRPAP. The objective is to produce a brand that
objectives quickly, and so a phased approach to range of other mountainous destinations (Switzerland, to Nepal who are therefore biased by recent will be used by all stakeholders in a consistent way.
marketing is required, both because of marketing Austria, Bolivia, New Zealand, Chile) and exotic Asian experience. Market research of consumer perceptions
practicalities, the need for training for NTB marketing ones (Singapore, Malaysia, Tibet, Bhutan, and India). of Nepal in potential markets has not been carried 5.5Clustering the
staff and also because of the need to plan for an Key findings were that Nepal compares more favourably out, however in 2004 TRPAP assisted a significant product
integrated long term approach to product than all of these destinations in the following areas: survey of tour operators who feature Nepal. Key 5.5.1 Marketing starts with the product
development. friendly people; findings in relation to Nepal's competitive position Nepal has undoubtedly some of the most scenic
good facilities; were that the country's unique selling proposition is mountainous terrain in the world and is inhabited by
5.3 Positioning Nepal adventure travel destination; seen as a combination of mountains, nature, friendly warm and friendly people. It has a pleasant climate
According to initial market research undertaken by wildlife destination; people, cultural diversity and adventure. and an abundance of fascinating historical sites of
NTB, Nepal's main competitors are those countries adventure tourism; incredible quality. It can therefore offer an abundance
which can offer a similar mountain and cultural culture (except for Switzerland, which gets an 5.4 Branding Nepal of products which will attract general and special
product. Most of these are either in or beyond the equal ranking); Nepal must be distinguished from other exotic, interest holiday-makers. Marketing starts with the
great Himalayan mountain range: Bhutan, China (Tibet pilgrimage; mountainous destinations in order for it to stand out product and in order to effectively market so
Five primary product
and Yunnan) North India and Pakistan. value for money; and on a very competitive market place. This will require rich and diverse a product -base to the world, clusters have been
overall experience. the creation of a "Nepal brand" and its consistent use it is necessary to cluster it. identified as follows:
Other long haul options are also emerging as serious by all key players over time. The brand must reflect the Culture, traditions
and people cluster
competition for the adventurous traveller who Nepal does not appear to have that much advantage kingdom's core product strengths, and these strengths Each product cluster will then be marketed
Cities and leisure
traditionally came to Nepal. Destinations in the Andes over these destinations in terms of must be protected through product development. A by NTB, in partnership with the industry, cluster
such as Bolivia and Peru are emerging. South Africa entertainment; brand is not just a consistent approach to marketing, through a range of marketing activities Outdoors and
and New Zealand are also making rapid inroads into shopping (Singapore is the market-leader here); critically it must also involve also a consistent including: adventure cluster
Religion and
the adventure tourism market. China and Central exoticism (Thailand is considered more exotic); commitment to product delivery. Nepal's core product public relations and corporate pilgrimage cluster
Asian republics are also beginning to target it. nature; and strengths are seen as the following: marketing Nature and wildlife
relaxation. rich ethnic cultures with world heritage sites still alliances; cluster
Market research carried out on Nepal's competitive in actual daily use; identification and targeting of relevant tour
spectacular Himalayan landscapes including operators in key markets;
Mount Everest; advertising;
pleasant year-round climate; travel trade and press familiarisation visitors; and
adventure tourism potential; internet marketing.
rich wildlife and flora;
unique religious traditions; 1. Five primary product clusters have been
fine natural attractions including world heritage identified as follows:
sites; and its
welcoming, friendly people. The role of people and culture in enhancing tourist
The brand will incorporate all of these key strengths, experiences in destinations is assuming greater and
The country's unique but in order to change Nepal's image from a perceived greater importance in destination choice. There is
selling proposition is
seen as a trekking and adventure-dominated destination, to the substantial evidence, both empirical and anecdotal,
combination of reality of a living cultural experience, more emphasis to suggest that the 'new' traveller is seeking
mountains, nature, needs to be given to the cultural richness of Nepal. experiences and cultural contact more and more
friendly people,
The brand will also need to recover the image of peace and that the actual destination itself is becoming
cultural diversity and
adventure. and calm which Nepal once had. less important in choosing where to go on holiday.

The actual development of the brand, logo and slogan The people of Nepal have many, varied and
for Nepal will require professional design and research fascinating traditions and cultural festivals. The
assistance and this has been initiated with assistance product cluster will give emphasis to spatial

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Tourism Marketing Tourism Marketing
Strategy for Nepal Strategy for Nepal
2005-2020 2005-2020

distribution and ethnic diversity. Pro-poor tourism experiences. NTB will target these specialist facilities in the Convention Centre and four and five folklore;
options including homestay and special interest operators through this product cluster. star hotels would also be needed. Hinduism;
product such as study tours, festivals, handicrafts, homeopathy, health springs and
village tourism and quality homestay. The combination of nature, wildlife, horticulture and The establishment of a Nepal Convention Bureau traditional Tibetan medicines;
culture in Nepal when linked with the iconic status will require NTB to commission a feasibility study to language schools;
City breaks and leisure, relaxation and well-being of Kathmandu and Mt. Everest makes the identify partners who would be prepared to fund the local customs and festivals;
products will be clustered together. The basis of the opportunity for this niche to be marketed establishment of a Nepal Convention Bureau meditation;
product will be the historic cities of the Kathmandu compelling. museum studies;
Valley, Pokhara, Janakpur, resorts, health spas, Niche product marketing music and dance;
casinos and other product of specific market There are nine national parks, three wildlife There is a wealth of special interest product that painting and art;
appeal. Shopping, festivals and handicrafts will also reserves, three conservation areas and one hunting Nepal can offer and NTB can play a significant role photography;
be featured. reserve in Nepal covering some 24,000 square in helping the private sector to capitalise on these sculpture;
kilometers, approximately 16% of the country area opportunities. Special interest niche products for traditional cooking; and
This product cluster will include trekking, rambling, of Nepal. This product cluster has potential to which special interest groups and societies can be yoga.
mountaineering, rafting and the wide range of world- address the distribution of tourism within Nepal very targeted in main markets include
class adventure product which Nepal can offer. It will effectively. architecture; Sports tourism
include a significant effort to disperse tourism ayuruedic spas; Sports tourism including golf have been identified in
through regional coverage of emerging tourist areas.
5.6Special interest astrology; the draft Nepal's Tourism Industry Strategic Plan as

The religion and pilgrimage product cluster will


product marketing bird watching; having potential for Nepal. Each sport will require
In addition to each of the five cluster areas identified Buddhist studies; dedicated marketing efforts to target organisers and
feature Nepal's flagship religious sites, such as casinos; specialists and attract them to consider Nepal as a
above, NTB will lead the industry in specific product
Lumbini, Pashupati, Swyambhu and Boudnath. It will crafts; destination for inter-regional events. A parallel
based marketing initiatives designed to increase the
also however have a strong element of ecology studies. events support budget will be needed.
economic contribution of tourism to Nepal's economy
NTB will lead the regional dispersal and include reference
industry in specific and address seasonality. These will include the
to also the ancient religions of Bon,
product based following:
marketing initiatives festivals, sacred mountains, animist
designed to increase beliefs and Nepal's small Moslem
Meetings, incentives, conferences and events
the economic community. There is an ancient tradition
contribution of Targeting the MICE market involves highly
of pilgrimage in Nepal, which saw people
tourism to Nepal's specialised marketing techniques and commitment
economy and moving not only to numerous pilgrimage
from specialist incentive agents. There is however
address seasonality. sites throughout the country, but also
potential to promote Kathmandu and Pokhara (if
between Tibet and India, usually via the ancient
direct air access is developed) as conference and
power places in Kathmandu. The product cluster will
event venues to near Asian markets. Marketing
target high end pilgrimage visitors and those who
activity will require the establishment of a Nepal
are more disposed to staying longer in Nepal and
Convention Bureau within NTB, who's function
who will combine leisure activities in their visit.
would be to track and target conventions happening
in other conference destinations primarily in India,
Wildlife and nature tourism has been, and continues
Thailand, Singapore and Malaysia, and attract them
to be, a major driver of inbound tourism to Africa
to Kathmandu. The Bureau would also track and
and this has created a very large consumer base of
target international incentive organisers. It would
potential travellers seeking out this style of travel
involve the development of a 'Nepal conference
along with a very large base of specialist tour
ambassador' support scheme to encourage
operators servicing the product development,
Nepalese academics, senior medical staff and other
marketing and sales needs. Both are always on the
conference attenders to invite conferences to
constant lookout for new, exciting and rewarding
Nepal. Special sales material relating to meeting

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as part of NTB's market planning process in 2004. so awareness does not have to be created rather it
Year 1 market approaches are outlined in the NTB's needs to be maintained, the opportunities to actually
Operational Plan 2061-2062 BS. buy product must be provided in the shop window, be
that window electronic, in tour operator brochure form
5.7.2 Main volume markets for or real. This market is particularly important for
Nepal addressing seasonality.
India is Nepal's most important volume market.
Critically also, Indians come to Nepal in the summer It is critical that the numbers of agents selling Nepal be
months when traditionally other markets do not. At significantly increased and it is suggested that NTB
present most visitors come for business, religious or marketing actions be addressed at the travel trade, not
other multipurpose reasons. The business element of the consumer. A network of Nepal specialist travel
travel is often exaggerated however, as many trips are agents should be branded and given training and
classified by Indians as business expenses. Nepal's support, in partnership with airlines offering
casinos rely on Indian business, and there is potential familiarisation trips. A travel trade marketing expert will
factor in China, Malaysia, and Singapore. need to be appointed to co-ordinate and promote this.

The main generating areas for tourism to Nepal from Meetings, incentives, conferences and exhibitions
India are the cities of Mumbai, Delhi, Kolkatta, (MICE) and sports tourism are seen as having potential
Bangalore and Chennai. as access improves. A programme of familiarisation
visits in partnership with agents and business hotels
Initial market research carried out amongst the Indian in Kathmandu and Pokhara is needed.
travel trade shows that this market has considerable
Charts 2 and 3 show future the estimated effect of potential for growth. Value for money, special offers Tour operators who run charter planes to Sri Lanka
this marketing approach on spend and length of stay. have been spread far too thinly over too many markets.
and price-led marketing will work best here. Access and Goa in their high season should be targeted and
Table 8 summarises the key market areas and also
must be improved however and NTB must work with encouraged to service Nepal at other time of the year.
5.7 Key source markets illustrates that primary and secondary markets will
Sahara, Jet and Indian Airlines in addition to RNAC.
for Nepal change over time. Indeed, this prioritisation needs to
be constantly reviewed in the light of on-going research.
The market appears to have good awareness of Nepal Sri Lanka is beginning to emerge from economic
5.7.1 Introduction
This section outlines summarises information relating
to current and potential source markets for Nepal. The methodology for addressing each these markets
Current market conditions are examined in detail in has been agreed in detail with key industry partners
the short term marketing plan contained in NTB's
Operational Plan TABLE 8 Volume, value and developing markets for Nepal in the medium and long term
2061-2062 BS. Volume markets Value markets Developing markets It is critical that the
numbers of agents
Medium term India UK, Japan, China, Malaysia,
selling Nepal be
Nepal needs to (2005-2009) Germany-Austria-Switzerland, Thailand, Singapore,
significantly increased
France, the Netherlands, South Korea, rest of
sharply focus its and it is suggested that
North America Europe, Australia-New
NTB marketing actions
marketing efforts to Zealand, Middle East
be addressed at the
be successful. In the Long term India, China UK Japan, Europe, North Russia travel trade, not the
past, limited consumer.
(2010-2015)* America, Australia-New
marketing efforts
Zealand, some South East

Asia, Middle East


Source: Consultant Note *: will require review nearer the time.

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2005-2020 2005-2020

depression as a result of a bitter civil war. It has a resulted from economic reform and greater prosperity, taking here, and Hong Kong residents have a keen eye for destination (not NTB) website, and advertising
predominantly Buddhist population which may have and an easing of travel restrictions. The opportunity to value for money. Direct air links are critical and improved materials) to roll-out the brand and based around the
potential to be attracted to Nepal in greater numbers. travel and learn more of the world has resulted in access from China via Chengdu and Lhasa is welcome. following five key strategic themes:
significant demand for touring and sight-seeing, initially  culture, traditions and people;

5.7.3 Main value markets for within China itself. As urbanisation continues and the The countries of South East Asia (Malaysia, Singapore  cities and leisure;

Nepal population become more exposed to Western and Thailand) with whom Nepal has reasonable  outdoors and adventure;

Japan has a population of 127 million and is presently influences, media changes in consumer patterns are access are potential short break and main holiday  religion and pilgrimage; and

Asia's leading outbound market. Over 17 million taking place. The greatest potential for the future, markets. To date there has been little penetration into  weather and well-being.

overseas holidays were taken in 2000 and this is however, comes from the great conurbations of these growing markets and there is an urgent need to
predicted to rise to 141.5 million by 2020. Beijing, Shanghai and Guangzhou, where there are research them. to create awareness of Nepal's cultural richness as
significantly higher levels of disposable income. Future a potential multi-faceted destination in high volume
The long haul markets of Europe and North America trends are likely to see: Other European countries such as Spain and Italy and and high value markets through a comprehensive
are important to Nepal because they are high value Scandinavia are developing markets for Nepal. public relations campaign centred on the five product
(long staying and high spending) markets. In the steady growth of holiday taking by younger clusters identified;
The long haul Europe, the UK, Germany and France are the professionals and their families; The Middle East has excellent access to Nepal and to use public relations to help to make Nepal
markets of Europe
and North America largest sources holiday-takers. The United a lengthening of holiday concentrated on the large expatriate populations can be targeted by Nepal fashionable again, through the use of celebrity-led
are important to States has traditionally been a key source of "golden weeks"; for short breaks. endorsement and events (including attracting
Nepal because they tourism for Nepal, but events at home and increasing competition from overseas; conferences and conventions);
are high value (long destinations, particularly near-Asian destinations; to initiate a carefully segmented promotional
also in Iraq have discouraged many Australia and New Zealand have not been effectively
staying and high
spending) markets. In Americans from travelling in the short term. and targeted by Nepal in the past, but offer potential. campaign in India primarily, focused on the travel trade;
Europe, the UK, increasing competition from within China for to renew contact with adventure and trekking
Germany and France 5.7.4 Developing markets
are the largest
domestic holidays. 5.8Medium term market- operators and show them an expanded product;
sources holiday- for Nepal ing actions 2005-2009 to research and build linkages with China;
takers. China, with a growing middle class of some Hong Kong/Macao has a population of 7.5 million, with The initial years of the marketing strategy are very to develop marketing partnerships with carriers and
250 million, is experiencing a rapid high disposable incomes and a strong propensity to travel important. Over-promising a holiday experience which tour operators from all primary markets;
expansion in domestic and outbound tourism. Over away from the cramped conditions of its urban cannot be delivered upon will have long term damage, to make initial contact with special interest tour
10 million Chinese now travel overseas. This has environment. Regular short breaks are a feature of holiday- which must be avoided. The short term strategy is operators in long haul markets particularly, to begin to
therefore to take a cautious approach, focusing in on foster awareness of Nepal as a potential special
India, initial exploration of developing markets and on interest, festival and cultural destination; and
regaining long haul markets and broadening their to develop an expanded Hindu pilgrimage package
experience of the product to build the foundations of (including accommodation and more than one airline
a long term Nepal brand. partner) aimed at India; and to create a new Buddhist
package, aimed at the main Buddhist countries of the
Particular attention will be given to promoting product world (Sri Lanka, Thailand, Korea, Japan and China)
which can 'fill' the summer monsoon months. This will and involving multiple airline partners.
The country's unique
selling proposition is involve targeting relaxation and well-being products,
seen as a such as resorts, spas and hill resorts, to India and other 5.9 Country by country
combination of Asian countries with hot summers. actions 2005-2009
mountains, nature, 5.9.1 Introduction
friendly people,
cultural diversity and The specific short term marketing actions are: Further detail in relation to market-by-market activity is
adventure. to develop a Nepal tourism brand to apply to all contained in NTB's Operational Plan 2061-2062 BS.
NTB and co-operative marketing activity with quality Key actions are summarized below.
industry partners;
to develop an appropriate suite of collateral
materials (visitor-friendly literature, high quality

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5.9.2 High volume markets create awareness of trekking in Nepal amongst people to visit; Nepal tourism industry partners will
India educational and active retired groups; work with MoCTCA to improve access from North create awareness of Nepal as a quality, value for
In India and Sri Lanka NTB will assist selected specialist tour operators in Japan America, including linkages via Europe; money tourism destination;
build on awareness of Nepal as a convenient, easily who will actively market Nepal's product through stimulate repeat visitation, offering product suitable foster marketing partnerships with all carriers
accessed, familiar, beautiful, welcoming and value for agents' familiarisation visits; and for visitors who are getting older; and serving the market, (including online airlines)
money leisure tourism destination with a pleasant climate; work with MoCTCA to encourage improved access target North America's Nepalese and Indian and their partner travel agents; With improvements
work with MoCTCA to encourage a substantial from Japan, including linkages via China. communities and encourage them to include Nepal in stimulate group business through to infrastructure and
improvement in air access from India, and to champion their travel plans. specialist tour operators (golf, casinos, product it will
become practical to
the development of a low cost, frequent service shuttle France pilgrimage, MICE); and encourage visitors to
air corridor between Delhi and Kathmandu; In France NTB and the industry will 5.9.4 Developing markets build up a network of trained Nepal- explore more of
build up a network of trained Nepal-specialist tour build relationships with the travel trade; China specialist tour operators in Malaysia who Nepal and stay
longer.
operators in India who will actively market Nepal's create awareness of Nepal as a destination for In China NTB's approach in partnership with the will actively market Nepal.
product; culture, festivals and soft adventure; and industry will include:
promote Nepal as a key destination for pilgrimage to work closely with those access providers who building awareness of Nepal as a value for money Thailand
plus leisure, and build relationships with specialist tour can sell Nepal in France. tourism destination; In Thailand NTB and the industry will
operators offering either Buddhist or Hindu packages; encouraging increased access to Nepal from China create awareness of Nepal as a quality, value for
stimulate group and individual business through German-speaking markets (principally increased access from Hong Kong and money tourism destination and the birthplace of Lord
specialist tour operators (casinos, soft adventure, In Germany, Austria and Switzerland the Board and Shanghai and opening up direct access from Beijing); Buddha;
pilgrimage, sport, well-being, MICE); the industry will and foster marketing partnerships with Thai Airways and
target overseas long stay FIT visitors in India, or build relationships with the travel trade in selected foster marketing partnerships with carriers and its international network;
planning to visit India and stimulate them to include cities. China-based travel agencies serving the market, and target new online carriers;
Nepal; and create awareness of new product and supporting joint activity. stimulate group business through specialist tour
develop a Nepal destination website and target environmentally sound initiatives. operators (golf, casinos, pilgrimage, MICE);
India's rapidly growing PC user base. work closely with access providers from German- Malaysia and Singapore build up a network of trained Nepal-specialist tour
speaking markets. In Malaysia and Singapore NTB in partnership the operators who will actively market Nepal.
5.9.3 High value markets stimulate repeat visitation.
United Kingdom
In the United Kingdom NTB in partnership with the Benelux
industry will In Belgium and the Netherlands NTB and the industry will:
build relationships with the travel trade especially stimulate awareness of Nepal through the press
in the greater London area; and travel trade.
create awareness of Nepal as a destination for promote Nepal as the ultimate special interest
special interest groups (trekking, horticulture, rafting, destination.
heritage, etc.); continue to foster both new and repeat trips to Nepal. In India and Sri Lanka
NTB will promote Nepal
work closely with access providers from the UK; Rebuild contacts with mainstream tour operators.
as a key destination for
identify and work closely with those tour operators pilgrimage plus leisure,
who deliver larger volumes of visitors from the UK, North America and build relationships
including special interest operators (trekking, In North America the joint NTB-industry approach will with specialist tour
operators offering
nonresident Indians etc.); and be to either Buddhist or
stimulate repeat visitation. assist selected specialist tour operators in North Hindu packages.
America who will actively market Nepal's product in
Japan partnership with Thai Airways and other airways who
In Japan NTB and the industry will may in future provide access;
work to create awareness of Nepal as a culturally encourage press and internet coverage of Nepal
rich destination suitable for special interest groups, and thus create awareness of Nepal as a culturally
educational groups and retired people to visit; rich destination suitable for action- orientated young

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2005-2020 2005-2020

Middle East more of Nepal and stay longer. The opening of better 5.11 Key issues in the Marketing Strategy for
In the Middle East NTB and its partners will regional airports will be important in this regard, as Nepal's tourism industry
foster marketing partnerships with Qatar and Gulf will improvements to the road network. Areas
Airways and their international holiday sales network; developed by TRPAP in particular can be marketed A significant increase in marketing effort is needed to make Nepal's tourism industry more
and more. viable and increase its economic contribution to the economy.
Stimulate golf and leisure business targeting the There are three overall marketing objectives:
expatriate and high-end local market. The successful creation of a new Nepal brand, and  To recover and expand the overall volume and value of tourism to Nepal, by concentrating
growing awareness of Nepal as more than just a on the country's inherent product strengths, its Himalayan location, unique culture, climate,
Korea trekking destination, and an on-going commitment to history, natural environment and friendly peoples.
In Korea NTB and its partners will market research will enable NTB to launch a more  To reposition Nepal firmly as a varied and multi-faceted destination, with world class
create awareness of Nepal as a quality, value for aggressive marketing campaign and to penetrate new cultural tourism and special interest tourism products, in addition to reclaiming Nepal's
money tourism destination and the birthplace of markets, in particular, China. The level of marketing position as one of the world's leading destination for nature and adventure; and
Lord Buddha; and will be stepped up, exploiting more fully the closer  To improve the spatial distribution of visitors within Nepal and foster the growth of new
foster marketing partnerships with all carriers Asian and capitalising on awareness already created tourism areas.
serving the market, and their partner travel agents. in all primary markets. Secondary markets will also be Nepal's positioning will be based around the variety of product which it can offer in the
targeted, and the designation of primary and secondary Himalayas.
Other European Markets markets reviewed. A strong Nepal tourism brand will be developed.
In Spain, Italy and Scandinavian NTB and its partners The marketing strategy will focus on five product clusters as follows:
will The objectives for the long term marketing strategy  culture, traditions and people;
stimulate awareness of Nepal through the press (2010-2015) are as follows:  cities and leisure;
and travel trade;  outdoors and adventure;
to promote Nepal as the ultimate special interest to continue to build awareness of Nepal as a  religion and pilgrimage; and
destination; "must see" destination in primary markets and to  nature and wildlife.
to continue to foster both new and repeat trips to target additional public relations to keep it The marketing mix will include the following:
Nepal; and fashionable;  public relations;
build contacts with mainstream tour operators. to expand marketing activity in China and South  identification and targeting of relevant tour operators in key markets;
Korea;  advertising;
Australia-New Zealand to expand the potential of pilgrimage tourism;  travel trade and press familiarisation visits; and
In Australia and New Zealand NTB will to position Nepal as the ultimate "special  nature and wildlife.
build awareness of Nepal as a holiday destination interest" destination, targeting selected special Special interest marketing will be introduced targeting meetings, conventions, incentives and
with a pleasant year-round climate, particularly interest tour operators and specialist societies in events, niche products and sport.
during the hot Australian summer; both primary and secondary markets and giving Key markets to be targeted have been categorised as main volume markets, main value
work with the travel trade and carriers to promote attention to marketable events; markets and developing markets.
Nepal and Nepal+ holidays; and to expand the menu of potential destinations
encourage positive press coverage of Nepal in within Nepal as access improves; and
Australia and New Zealand. to expand marketing partnerships with carriers
and tour operators from all primary markets.
5.10 Long term marketing
actions 2010-2015 The strategy to achieve these objectives will need to
With improvements to infrastructure and product it be evolved with industry partners, in particular with
will become practical to encourage visitors to explore industry partners in the markets themselves.

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6 RESOURCES FOR
MARKETING AND THE ROLE
OF THE NEPAL TOURISM
BOARD

6.1 Resource needs Substantial resources are required to shift and inform TABLE 10 Distribution of marketing expenditure by market area 6.1.2
6.1.1 Financial resources current perceptions of Nepal amongst consumers and Market area Current percentage of Recommended percentage of Human
marketing expenditure expenditure
Unless adequate and regular resources are secured the travel trade through launching a Nepal tourism
2003-4 2005-2009
resources
for marketing Nepal, this strategy will fail. The extent brand. NTB and the industry must convince the The overall size of the
of the marketing challenge facing Nepal should not be overseas travel trade of the reality of the safe, High volume markets 26 30 Board's marketing
underestimated. Recovering lost ground is never easy. fascinating, friendly and culturally rich place that Nepal High value markets 43 50 department is sufficient
Other destinations gain market share as Nepal's former is. Only when this is done, and the product is improved to meet future anticipated
Developing markets 31 20
customers choose other places to holiday in, and they to meet market expectations, tourism will once again medium term needs and
100 100
are all working to keep that market share. The review prosper in Nepal. the Board is fortunate to
Source :NTB marketing department, consultant have very talented staff at
of current marketing activity clearly illustrates how
unbalanced the national marketing mix is, and only A ring-fenced budget for marketing of NRs 360 million establish the Nepal brand and re-launch the country all levels. If the feasibility study recommended for a
additional funding can make it more effective. ($5 million) per annum will be required until 2009 to as a viable tourism destination. Table 9 illustrates how Nepal Convention Bureau proves positive, this office
this funding should be spent. This requires a review of would involve creating manager and marketing
TABLE 9 Nepal Tourist Board funding needs 2005-2009 and marketing mix how NTB is funded, and should be undertaken in the executive posts. A Director of Research should
Activity 2005 2006 2007 2008 2009 2009 context of preparing tourism satellite accounts which however be recruited by NTB. Professional public
NRs ('000) NRs ('000) NRs ('000) NRs ('000) NRs ('000) Percentage
will reflect the true value of tourism's contribution to relations representation is required in Europe in
Internet 50,000 50,000 50,000 50,000 50,000 14 Nepal's economy. It is clear that the current tourism addition to present provisions in India and China. Public
development
tax method of funding tourism is not sufficient to relation resources should continue to be
Market 10,000 10,000 10,000 10,000 10,000 3 deliver the potential of tourism as a generator of purchased on a contract basis, and It is clear that the
research current tourism tax
economic growth, especially in times of declining contract terms of reference should be method of funding
Publications 40,000 40,000 40,000 40,000 40,000 12 numbers when Nepal needs to market most. regularly reviewed. tourism is not
Exhibitions 50,000 50,000 50,000 50,000 50,000 14 sufficient to deliver
Staff training in changing marketing the potential of
Media 80,000 80,000 80,000 80,000 80,000 22 Funding needs beyond 2010 will need to be reviewed
tourism as a
support PR at the time in the context of competition and a revised issues is always required, and priority generator of
Advertising 70,000 70,000 70,000 70,000 70,000 19 marketing strategy. should be given to finding short term economic growth,
placements in well established national especially in times of
Overseas carrier 60,000 60,000 60,000 60,000 60,000 16 declining numbers
and tour operator With greater financial resources, the geographical tourist boards, such as Visit Britain when Nepal needs to
joint marketing emphasis of the Board's marketing strategy can shift overseas offices in Asia. market most.
Total NRs 360,000 360,000 360,000 360,000 360,000 100 as shown in table 10.
Source: Consultant

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Staff turnover needs to be avoided and present rates in Nepal's Tourism Industry will grow stronger. The CHART 4 Recommended revised NTB marketing department structure
of pay should be reviewed to bring them into line with Board's planning processes should however continue
Director of Marketing
private sector marketing executive's salaries. be fully consultative.
Manager Manager Manager Manager
Future recruitment for marketing staff needs to give At present however there are twelve advisory marketing Main Value Main Volume Developing Markets Nepal Brand
strong preference to extensive practical experience committees for different markets and this is unhelpful Markets Markets China, Malaysia, and
UK, Japan, France, India + Sri Lanka Singapore, Public
of private sector marketing, ideally in Nepal's main when it comes to prioritising resources. In fact, the
German-Switzerland- Thailand, Korea, Relations
markets. Job specifications should be highly specific, system has effectively ceased to function properly Austria, North America, Middle East,
seeking staff with precise experience of the work owing to the lack of marketing resources available for Netherlands, Spain, Italy,
required by their specific marketing posts. In order to most markets. Critically marketing advisory Scandinavia,
Australia
ensure that the Board always has the best candidates committees do not involve overseas partners, who
available to lead Nepal's tourism industry, posts at are the key agents for joint marketing overseas. Officer Officer Officer Officer
manager level and above should always be externally It is recommended that the consultation process be responsibilities responsibilities responsibilities responsibilities
UK India China Brand control
advertised. Junior positions should be internally rationalised as follows:
Japan Travel trade Other Asia Publications
recruited from within the entire NTB organisation, NTB research and marketing department staff Europe development Other Europe Distribution of
before being externally advertised should no suitable should formulate a draft annual plan in consultation US Australia publications
internal candidate be found. Recruitment at Director with overseas PR representatives, the Board's Public relations
Culture & heritage Religion & Activity and Media Centre
level should be handled by a professional recruitment advertising agency, overseas tour operators and
cluster pilgrimage cluster adventure cluster Domestic
agency and target candidates with significant carriers. The plan must be in accordance with the Nature & wildlife Cities & leisure Sports tourism Marketing
experience of consumer marketing, not necessarily in principals of the long termmarketing strategy. cluster cluster (short breaks)
tourism. Although the gender balance within the A series of industry consultations should then take Niche leisure MICE

marketing department is better than in most other place, and the draft plan should be presented to the
NTB departments, TRPAP recommends that NTB NTB Board for approval.
generally should adopt a recruitment policy which The approved annual marketing plan should then Airport and information offices within Nepal are comprehensive Tourism Facts booklet:
positively discriminates in favour of female candidates be presented to the industry at which participation in currently run by the marketing department. They are monthly arrivals data by source market;
and those from ethnic minorities to create a staff key marketing initiatives proposed should be however not a marketing function: They are a visitor distribution of accommodation by district;
structure which is more representative of the nation. canvassed. servicing function. They should thus be handled by the average occupancy by district;
Board's tourism product and resources department. distribution of bednights by district;
6.2 Leadership and The private sector needs to plan its marketing average length of stay by source market;
consultation expenditure just as NTB does, so detailed information 6.4 Research department average daily spend of tourists by source
As the Board matures and places more emphasis on on the cost of participation in NTB activities should be 6.4.1 NTB research needs market; Accurate statistical
information and market
research-based decision marketing, its leadership role clearly worked out at the earliest possible date. Events Accurate statistical information and market research estimated total tourism spend by district; research is essential in
and promotions which do not receive sufficient private is essential in order to judge the performance of Nepal's and order to judge the
sector financial support should be reviewed and the tourism industry, attract investment and guide future estimates of domestic tourism. performance of Nepal's
Operating Plan needs to be sufficiently flexible to allow tourism industry,
marketing activity. At present NTB's statistics gathering
attract investment and
for this. function is under-resourced and its output targets, in 6.4.3 Annual hotel survey guide future marketing
terms of regular analytical reports on different aspects As in almost every other country with a sizeable activity.
6.3Marketing of Nepal's tourism, needs to be improved. A Director tourism industry, a hotel performance survey
department structure of Research should be recruited to lead this important should be initiated in co-operation with the Nepal's
Some re-organisation of the Board's marketing department. hotel association, and published annually. Initial
department is required to deliver this strategy in an discussions with the chairman of the HAN have
efficient way. It is recommended that one post be 6.4.2 Tourism facts idicated that they would welcome and co-operate with
upgraded to give an additional manger post within the The following information should be gathered by NTB such an initiative. The annual hotel survey should show:
marketing department. Chart 4 outlines the research department (in co-operation with other registered accommodation stock by district;
recommended revised marketing department structure. sources), and published annually in a more average room occupancy by grade and month;

40 41
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Strategy for Nepal Strategy for Nepal
2005-2020 Appendix: Visitor growth projections 2005-2020

Markets 2003 Market Average 2004 Annual 2005 2006 Annual 2007 2008 Market
numbers Share annual Percent growth growth Share
Percent growth rate to rate to 2008
average daily room rate by grade; 6.4.5 Expectation and of total rate 2007 2008 Percent
average bed occupancy by grade; satisfaction surveys 1988 Percent Percent of total
2003
average daily expenditure per visitor, per cost centre Visitor expectation (arrival) and a visitor satisfaction
(accommodation, food and beverage, etc.); (departure) surveys should be carried out on an ongoing UK 23318 7 4 29148 8 31479 33998 9 37057 40393 6
average number of employees by grade; and basis as a matter of course. Japan 25313 8 6 29110 8 31439 33954 9 37010 40341 6
average rates of employees to visitor by grade.
France 16854 5 3 25281 5 26545 27872 6 29545 31317 5
6.4.6 Ongoing research
Germany-Austria 24050 7 2 27658 4 28764 29914 6 31709 33612 5
This may need to be commissioned in co-operation programme
with an accountancy firm familiar with hotel cost centre Specific market research assignments into aspects of -Switzerland
economics in Nepal. In time other aspects of tourism the product and the market should be carried out in a Benelux 12150 4 8 15188 8 16403 17715 8 19132 20662 3
performance should be examined (eg trekking agency planned way, in consultation with the marketing
US & Canada 23381 7 3.5 30395 2 31003 31623 5 33204 34865 6
performance, adventure tourism performance). department. Ideally three such reports should be
carried out each year and published by NTB. Examples Aus & NZ 7721 2 1 12354 4 12848 13362 6 14163 15013 2
6.4.4 Visitor attractions survey of such research projects are being developed by NTB Total High
In time also, a visitor attractions survey should be Research Department with inputs from TRPAP and SNV- Value Markets 132787 40 169132 178480 188438 201821 216202 34
undertaken annually and published. This should show: Nepal's research adviser. These are as follows:
India 88813 27 2 133220 9 145209 158278 12 177271 189680 30
a listing of main fee paying attractions for Nepal by research into Buddhist pilgrimage tourism;
district; research into Indian market prospects through Sri Lanka 9903 3 12379 9 13493 14707 12 16472 18449 3
actual annual attendances by attraction; focus groups; and Bangladesh 6004 2 9606 7 10279 10998 10 12098 13308 2
number of attractions by district; travel trade research overseas, runways
Total High
average admission cost by district; and organized through Greenwich University and one
Volume Markets 104720 32 155205 168981 183984 205842 221437 35
average number of employees per attractions by by TRPAP and NTB via the internet.
district. China 11068 3 16602 20 19922 23907 30 31079 40403 6

Korea 8798 3 14077 7 15062 16117 12 18051 20217 3

Malaysia 4165 1 5831 7 6239 6676 15 7677 8829 1

6.5 Key Issues relating to resource and the Nepal Thailand 7041 2 10209 5 10720 11256 15 12944 14886 2

Tourism Board’s role Singapore 2727 1 4091 2 4172 4256 10 4681 5149 1

Italy 6173 2 0 8642 4 8988 9347 6 9908 10503 2


Lack of adequate resources for marketing Nepal is a major constraint on tourism’s economic
potential. Spain 9481 3 2 12325 4 12818 13331 6 14131 14979 2
The current tourism tax method of funding NTB needs to be reviewed as it is not providing Sweden 1098 0 1427 4 1484 1544 6 1637 1735 0
sufficient resources to effectively market the destination.
Finland 950 0 1188 4 1235 1284 6 1361 1443 0
An annual marketing budget of at least $5 million is required for the national tourist board to
effectively deliver growth. Additional human resources are not required in the medium term. Total Developing
NTB’s marketing staff need ongoing marketing training and , following such investment, staff Markets 51501 16 74392 80642 87718 101470 118143 19
turnover needs to be minimised. In this regard marketing staff salaries should be brought into Total others 40992 12 57192 61195 65479 70063 74967 12
line with the private sector.
Total visitors 330000 100 455921 489298 525618 0 579194 630749 100
Future recruitment to the marketing department needs to be based on very specific job
descriptions and involve the use of specialised recruitment agencies for senior posts. Source : Consultant with Nepal Tourism Board research department.
NTB’s laudable industry advisory committee structures need some rationalisation so that theycan
be more effective in advising marketing policy.
The Board’s research department requires strengthening to make it more effective and output-
driven.

42 43
Nepal Tourism
Tourism Board
Marketing Tourism Marketing
Operational
Strategy for Plan
Nepal2004-5 Strategy for Nepal
Working draft
2005-2020 2005-2020

Appendix: Visitor growth projections


Markets 2009 2010 Market Growth 2015 Market 2020 Market
Share Rate to Share Share
2010 2020 2015 2015
Percent Annual Percent Percent
of total Percentage of total of total
UK 44028 47990 6 7 67309 6 94404 6
Japan 43971 47929 6 7 67222 6 94283 6

France 33196 35188 5 7 49353 5 69220 5

Germany-Austria-Switzerland 35628 37766 5 7 52969 5 74292 5

Benelux 22315 24101 3 7 33802 3 47410 3

US & Canada 36608 38438 5 7 53912 5 75614 5

Aus & NZ 15914 16869 2 7 23659 2 33183 2

Total High Value Markets 231661 248281 33 7 348227 33 488407 33

India 202958 217165 29 5 277164 26 353739 24

Sri Lanka 20663 23142 3 7 32458 3 45524 3

Bangladesh 14639 16103 2 7 22585 2 31676 2

Total High Volume Markets 238259 256410 34 7 359628 34 504397 34

China 52523 68280 9 12 120333 11 212069 14

Korea 22643 25360 3 7 35568 3 49886 3

Malaysia 10153 11676 2 7 16376 2 22969 2

Thailand 17119 19687 3 7 27612 3 38727 3

Singapore 5664 6231 1 7 8739 1 12257 1

Italy 11133 11801 2 7 16551 2 23214 2

Spain 15877 16830 2 7 23605 2 33107 2

Sweden 1839 1949 0 7 2734 0 3834 0

Finland 1530 1622 0 7 2274 0 3190 0

Total Developing Markets 138481 163435 22 7 229227 22 321502 22

Total others 80215 85830 11 7 120380 11 168840 11

Total visitors 688617 753956 100 7% 1057463 100 1483146 100

Source: Consultant with Nepal Tourism Board research department

44 45
Tourism for Rural Poverty Allevation Programme
TRPAP NEP/99/013
PO Box 107
Kathmandu, Nepal