Economic Development in Nepal

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Nottingham University Business School

MBA Programme

BUSINESS ECONOMICS (N14M79)

A CASE STUDY ON THE CHALLENGES FACED BY THE TOURISM INDUTRY OF NEPAL

NAME:
Trishakti, J.B. Rana; Student ID: UNIMKL-012016

Word Count: 2190
(Excluding Executive Summary)

EXECUTIVE SUMMARY

As a poor developing nation, Nepal faces many challenges and opportunities. It has just emerged from a decade long civil war and emerged as a Federal Democratic Republic in 2008. Tourism industry in Nepal has gone through a rough phase during this period, which has resulted in low revenues and employment generation.

Tourism industry represents more positive potentials than other industries in contributing to Nepal’s growth. In 2011, Tourism contributed 8.8% to GDP and employed 7.7% of total population employed. Total number of tourist arrival in 2011 was 736,215 which is a significant increase as compared to previous years. Vision 2020 of the Nepal Tourism Board is to achieve the arrival of 2 million tourists and provide employment to 1 million people.

As a touristic destination, Nepal has a competitive advantage in terms of natural assets and diverse and rich culture. Located between India and China, Nepal needs to take advantage of its location and attract more tourists from these countries. It also needs to promote itself at the world stage and improve its brand positioning.

Despite the growth of tourism in the past couple of years, the industry is still functioning below par. The growth is taking place at a very slow rate due to major obstacles like lack of infrastructure, poor accessibility, low investment and poor marketing and promotion. The government needs to take immediate action in strengthening this industry in order to achieve Vision 2020.

TABLE OF CONTENTS

1.0 Introduction.……………………………………………………4 2.1 Background…………………………………………….4 2.2 Industry Overview……………………………………..4 2.3 Case Study and Objectives…………………………….5

2.0 Industry Analysis………………………………………………5 3.4 Tourist Arrivals………………………………………..5 3.5 Revenue and Employment from Tourism……………..7 3.6.1 Gross Foreign Exchange from Tourism……….7 3.6.2 Employment from Tourism……………………7 3.6 Tourism Services………………………………………8 3.7.3 Transportation………………………………….8 3.7.4 Accommodation………………………………..8 3.7.5 Trekking and Mountaineering………………….8 3.7.6 Religious Tourism……………………………..8

3.0 Internal Analysis (SWOT Analysis)…………………………...9 4.7 Strengths……………………………………………….9 4.8 Weaknesses…………………………………………….9 4.9 Opportunities…………………………………………..10 4.10 Threats…………………………………………………10

4.0 Recommendations……………………………………………..11 5.11 Improve Infrastructure………………………………....11 5.12 Improve Safety and Security…………………………..11 5.13 Air Accessibility……………………………………….11 5.14 Improve Marketing and Promotion……………………12 5.15 Development of New Tourism Areas………………….12

5.0 Conclusion……………………………………………………..12

6.0 Bibliography……………………………………………………13

1.0 INTRODUCTION

1.1Background

Nepal, home to eight of the world’s ten highest mountains including Mount Everest, is a landlocked country located between India in the south and China in the north. With a population of just over 26.5 million and total area of 147,181 square kilometres, Nepal is the 41st most populous country and 93rd largest country by landmass (CIA, 2012). Prior to 2006 Nepal was a kingdom, now it is a federal democratic republic.

Socially, it is diverse country with 103 castes and ethnic groups and 92 living languages. Nepal is divided into three main regions: mountainous region (15%), hilly region (68%) and terai (plain) region (17%). In terms of religion, about eighty percent of Nepalese are Hindu while others are Buddhist, Muslim, Kirat and Christian.

1.2Industry Overview

Tourism is one of the potential sectors for...
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