The role of government to incentivize domestic tourism in order to revive the tourism industry

Incoming foreign tourist numbers in Nepal may remain suppressed for the earlier half of the decade as potential tourists can be expected to be less confident in traveling overseas destinations as Nepal in where the ability and effectiveness of the government to ensure tourist safety and handle crisis situations is uncertain. Given that, international tourism is likely to face significant disruption, and therefore the Nepalese tourism industry may again have to depend on domestic tourism to prevent the industry from hard landing.

The statement goes along the fact that domestic tourism had been contributory in saving the tourism industry in 2016 during the immediate post-earthquake period. As such, the fellow Nepalese with desire to travel after spending most of their times indoor amid lockdown can be expected to revive the Nepalese tourism industry once again. Besides, the fellow citizens to engage in domestic tourism is mostly likely as the recently burgeoning alternative of traveling abroad may not be so preferable and convenient for days to come. 

So, now that there is sufficient reason to agree that domestic tourism could in fact be the trump cards for the entire Nepalese tourism industry to remain buoyant during the difficult post-pandemic days, the question is what sort of policy measures that the government can take in order to make domestic tourism more convenient in the upcoming budget speech?

But, before we advocate measure that the government might should take in the upcoming budget speech to promote domestic tourism, it would advisable for the government to implement few proposals that have already come onboard. Of which, one of the important measures that government can pursue is to promote “holiday tourism”. Recommended by the chief of Nepal Tourism Board, the measure is expected to draw 170 thousand domestic tourists generating in total of 5.3 billion for the tourism sector. Though the per-capita spending of domestic tourists on such projection is still likely to be third of observed per-capita spending of international tourists, the government should take the idea into serious consideration.

Moreover, enabling domestic tourists to ply green number plated tourist vehicles is another very important measure that the government should undertake in order to incentivize domestic tourism. As vehicles imported for the purpose of only carrying tourists are exempted with 50% of the custom duty applicable to other vehicles, allowing domestic tourists to also ply vehicles of such license can significantly reduce the cost of travel for domestic tourists.

However as of now, domestic tourists in Nepal, although classified as tourists by Tourism Policy, 2008 and subsequent amendment to the tourism act are barred from travelling in green number plated tourist vehicles. The problem follows from the definition of Tourist Vehicles provided in the Motor Vehicles and Transport Management act 1993, which defines tourist vehicles as registered for transport of foreign tourists. Even though the action plan calls for harmonization of legal provisions, very little has been done. Therefore, it is imperative that all legislation concerning the tourism industry be harmonized to ensure that domestic tourists are allowed to ply green number plated vehicles. Not to mention, now is the time for this particular measure to put into effect amid other deregulatory measures in order to unlock domestic tourism to its full potential whilst the tourism industry relies on it for survival.

Prience Shrestha

Prience Shrestha

Prience works in the research department at Samriddhi Foundation. And, he attempts to specialize in the field of Development Economics