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

vi vii
 Tourism Marketing
Strategy for Nepal
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
somewhere where many people from a great many
countries would like to visit. Even more powerfully,
once people have visited Nepal, research in the past
has shown that a high percentage of these visitors
wish to return again and again. Why is this?
Nepal offers tourists a breath-taking experience of
nature and ever-present mountain scenery, including
Everest, the world's highest peak.
It is mysterious kingdom once cut off from the world,
and it has an incredibly rich cultural heritage, both built
and living. This includes intriguing historic living cities,
overflowing with monuments some of which are of
great antiquity. It has many styles of traditional
settlement, all set against some of the world's most
dramatic mountain scenery. Festivals, often dating
from pre-history, still abound and are filled with vitality
and colour.
Nepal's flora and fauna are truly amazing, both in
terms of their variety and, in some cases, their rarity.
The country is blessed by a pleasant year-round
climate, affording stunning mountain views for much
of the year.
In addition to this the country is peopled by an
unfailingly friendly population who are generally very
happy to share their innate hospitality as well as their
many customs and traditions with visitors.
2 3
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
destinations through the 1970s, '80s and '90s. During
this period visitor numbers grew from a meagre 45,000
to just under half a million and the country largely
pioneered the concept of trekking tourism.
Surprisingly, this growth was achieved against a
background of considerable political turmoil within
Nepal.
Tourism's potential can only truly be realised in a
climate of peace and stability. What has been achieved
in Nepal against a background of instability is
remarkable: What could be achieved in terms of
employment and wealth creation however, if the
country were to achieve a lasting peaceful settlement,
is a goal which needs to be constantly striven for in a
country where extreme poverty and social deprivation
are at the roots of continuing political unrest.
Between 1999 and 2002, visitor numbers collapsed
by more than fifty percent. 2003 saw some hopeful
signs of possible recovery from some markets, in
particular India, as a result of a period of cease-fire
between the government and the Maoists. Massive
international publicity for the fiftieth anniversary of the
first conquest of Mount Everest by Sir Edmund Hillary
Tourism Marketing
Strategy for Nepal
2005-2020
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
fashionable tourism destination. Now however that
Despite its considerable successes achieved against tide is ebbing fast. It is essential that the government,
a long-term background of political uncertainty, in the the tourist board and the industry now go Once people have
growing Asian tourism economy Nepal is under- out and market the destination in a visited Nepal,
performing. It is rapidly losing market share in an professional, integrated and strategic way research has shown
that a high
increasingly competitive world tourism economy. as partners rather than as competitors.
percentage of these
Other destinations, in particular New Zealand, have Nepal's competition is outside the country, visitors wish to
taken on the mantle of the world's leading eco- and is very strong. Concerted strategic return again and
tourism destination. At present, apart from the marketing effort is now essential if tourism again.
obvious problem of negative media coverage, Nepal is to be a driving force for economic growth and poverty
seriously lacks credible market research as to why alleviation in Nepal.
exactly its tourism industry is under-
performing and what aspects of the
product need attention. There has
been no coherent marketing
strategy. Regular surveys of
departing visitors are not
undertaken, so the country cannot
gauge their levels of satisfaction,
unsatisfied wants, spending in
Nepal or current propensity to
return. Information on potential in
existing and new markets is only
beginning to be gathered, and
marketing partnerships with the
travel trade in these markets (the
 Tourism Marketing Tourism Marketing
Strategy for Nepal Strategy for Nepal
2005-2020 2005-2020

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

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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 Tourism Marketing
Strategy for Nepal
2005-2020
CHART 1 Seasonality of tourism in Nepal
Source: Nepal's Tourism Industry Strategic Plan 2005 - 2009
If overall tourism distribution, as illustrated historically
at chart 1, can be made more evenly spread through
effective tactical marketing of summertime product
(such as city breaks, conferences, hill station resorts
and spas) then Nepal's tourism industry can improve
its overall occupancy and efficiency.
2.6 Demography
The demographics of visitors to Nepal have shown a
slight male bias (60 percent of visitors were male in
2002) This is consistent with a country whose image
has been built on trekking and mountaineering.
Younger age groups also predominate, but the market
8 9
Tourism Marketing
Strategy for Nepal
2005-2020
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:
is ageing. Almost 60 percent of visitors to Nepal were There is need for
under 45 in 2001, but worldwide, older age groups Nepal to concentrate
its marketing
are travelling more. Nepal also attracts very small activities in two areas:
numbers of children (only 4 percent of visitors were I. Public relations;
under fifteen in 2001). In a country which is so II. Travel trade
obviously child-friendly, this is indicative of an image marketing
and product deficiency. Nepal has not invested enough
in family-friendly product such as picnic areas,
playgrounds, child-friendly museums and other leisure-
learning facilities, nor has it marketed itself as a family
destination to tourism markets like India where large
families will travel together.
 Tourism Marketing
Strategy for Nepal
2005-2020
Singapore Airlines, Druk Airlines and a number of
others also carried small volumes. Martinair
commenced an additional European service in
October 2003 and Singapore has ceased operating to
Nepal. In 2004 Jet Airways connected Kathmandu to
its extensive Indian network: This represents a
significant marketing opportunity for Nepal.
Qatar Airlines and Gulf Air are particularly important
for European access at present. Thai Airways is the
most important carrier for North America and Japan.
The operation of a low cost, frequent service, air
corridor between Delhi and Kathmandu would be a
huge step forward for tourism. Cities from which
passengers arrive in Nepal, in order of importance in
2001 were: Delhi, Bangkok, Banares, Doha, Lhasa,
Singapore and Abu Dhabi. Singapore's figure declined
dramatically in 2002 as the airline withdrew its service.
Lhasa is an indication of the importance of Nepal-
Tibet joint destination holidays: The routing is usually
Kathmandu-Lhasa-Kathmandu).
2.9 Distribution of
visitors within Nepal
The most popular tourism areas within Nepal are
Kathmandu, Patan and Bhaktapur, the three historic
cultural cities. Outside Kathmandu, Pokhara is the
most popular destination. Thereafter (in order of
The operation of a low
cost, frequent service,
air corridor between
Delhi and Kathmandu
would be a huge step
forward for tourism.
10
importance recorded in a 2001 survey) are:
Nagarkot;
Annapurna;
Chitwan;
Everest;
Dhulikhel;
Lukla;
Langtang; and
Lumbini.
For adventure tourist however, the top three regions
are Kathmandu, Pokhara and Annapura, followed by
Patan and Bhaktapur. Of other regions Everest is the
next most popular and surprisingly few adventure
tourists mentioned Chitwan or other areas in this
survey.
2.10 Occupancy
There is no comprehensive data available on hotel or
guesthouse/lodge occupancy in Nepal. NTB has
estimated occupancy in 2003 at thirtyfour percent
overall, however this calculation was arrived at by
comparing arrivals to bed stock. It assumes that all
overseas arrivals use certified serviced
accommodation, but this assumption is not proven.
Also not all accommodation is certified and the
calculation does not consider bed occupancy. It is
therefore seriously flawed. Discussions with the Hotel
Tourism Marketing
Strategy for Nepal
2005-2020
Association of Nepal (HAN) indicate that actual overall available in hotel accommodation, 23,120 of which
annual bed occupancy is likely to be below twenty five were in Kathmandu. The extent of lodge, hotel, tea
percent, with considerable implications in terms of house and other forms of unclassified tourist
operating efficiency of the country's bedstock and accommodation is not quantified, but is quite
inability to re-invest. In 2002 there were 37,616 beds extensive.
2.11 Key
issues arising in the review of tourism
performance

Growth is possible, despite political unrest. However exploiting the full potential of Nepal's
strong tourism product does require peace.

There is an urgent need to market Nepal in a professional and concentrated way in order to
impact an increasingly competitive market and re-capture lost business.

There are significant gaps in research data on Nepal's tourism performance.

India is Nepal's most important source market in terms of numbers and the ability to address
uneven seasonality.

Japan is Nepal's second most important market in terms of numbers, and importantly attracts
higher spending tourists.

The United Kingdom, France and Germany are consistent producers of high spending, long haul
tourism.

China and South Korea have long term potential.

Declining length of stay is an issue of concern.

Tibet is often combined with Nepal as a holiday option.

Business and pilgrimage tourism are less affected by the recent downturn in tourism to Nepal.

Uneven seasonal distribution of tourism is a challenge which marketing and product
development must address.

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.
11
 Tourism Marketing
Strategy for Nepal
2005-2020
3 HOW NEPAL HAS
BEEN MARKETED
3.1 The image of Nepal
The image of Nepal as a tourism destination has never
been centrally marketed in a strategic way. Tourism
has grown here largely because Nepal was
fashionable, due to high profile celebrity visits to places
like Chitwan and Kathmandu and the country's opening
up after hundreds of years of isolation. Private sector
individual entrepreneurs, both Nepali and foreign,
seized the opportunities which tourism presented and
as a result a vibrant Nepali tourism industry developed
in a way which, at the time, was market-led. Good
personal relationships were established between
Nepalese ground operators and tour operators
overseas, and these became the key component of
Nepal's marketing effort.
Nepal in the 1970s and '80s was at the forefront of
environmentally-based tourism and initiatives like the
Sagarmartha Project helped to develop this into
practical sustainable tourism. The international travel
trade, attracted by pioneering individual entrepreneurs
with support from the newly created Tourism Ministry,
succeeded in attracting a wide range of tour operators
(primarily from America and Europe) to feature Nepal.
Very positive word-of-mouth reports, evidenced by high
numbers of repeat visitors, helped to market the
country and achieve steady growth. It became
fashionable to trek in Nepal and even today this
perception remains.
12
The establishment of the Nepal Tourism Board, bringing
together the government and private sector, has been
a major step forward. The Board has achieved much in
five years. It has established a strong co-ordinating role
despite modest resources. This critical central role now
needs to be given strategic direction to deliver growth.
There remain however a number of inherent
weaknesses in the marketing of the destination, which
need to be addressed. These are as follows:
Short-term and varying tactical initiatives have been
undertaken in the absence of any co-ordinating long
term strategy or detailed market research. (A similar
problem exists in relation to regional tourism
development where initiatives by various aid agencies
are not co-ordinated by a national tourism
development plan).
Regularly changing marketing messages are
creating a blurred image in the marketplace.
There is insufficient contact with the international
travel trade in main markets, especially at national
tourist board level.
There is a need to expand professional public
relations representation for Nepal's tourism product
in key markets.
An uncertain and inadequate national tourism
marketing budget is a key weakness.
The demise of almost all non-stop direct air access
from Europe has significantly weakened Nepal's
competitive position and market profile.
Intense competition between Nepalese ground
operators for overseas business has resulted in an
unwillingness to market jointly overseas, and a failure
on the part of the travel trade in Nepal to join forces to
address competition which lies outside Nepal, not
within it.
There has been a long term failure to invest in
market research to inform marketing strategy and to
guide product development initiatives as to future
market needs.
Tourism disferal has not been adeqately blamed for.
Nepal's tourism image was created by those who were
introducing new product, not through a concerted
national spatial strategy. Some aspects of the product,
such as the country's incredible cultural riches and
ethnic diversity are under-protected and almost taken
for granted. UNESCO recently placing the World
Heritage Site of the Kathmandu Valley on its
endangered list sadly illustrates this point.
Regenerating practical national pride in these assets
will be a strategic necessity for the future of tourism,
as there is a clear need to broaden Nepal's appeal if it
is to win back high volumes of visitors.
In the absence of detailed consumer research into
consumer satisfaction or perceptions of Nepal, an
internet-based survey of 118 tour operators was
undertaken in 2004 through TRPAP. This shows that
Tourism Marketing
Strategy for Nepal
2005-2020
Nepal's main selling points are by tour operators as
mountains (40 percent); beautiful nature (40 percent);
friendly people (39 percent) cultural diversity (37 percent)
and adventure tourism (22 percent). Nepal's strengths
are seen as scenic beauty, friendly people, mountains,
culture and a low cost base within the country.
Weaknesses identified by tour operators include
political instability, poor air connectivity,
The establishment of
unprofessional behaviour by some involved the Nepal Tourism
in tourism, poor infrastructure and a failureBoard, bringing
to preserve nature. together the
government and
private sector, has
Most tour operators surveyed identified an been a major step
urgent need to market Nepal both to the forward.
consumer and through closer ties with tour operators.
3.2Nepal Tourism Board
marketing
The Nepal Tourist Board Act of 2053 BS (1997) and the
establishment of the Nepal Tourism Board (NTB) in
December 1998 was a considerable step forward for
Nepal's tourism industry. Although it has inherited a
deteriorating market environment, with a young and
enthusiastic staff NTB is actually quite well placed to
address many of the weaknesses outlined above. The
purpose of this marketing strategy is to help them, in
partnership with Nepal's multi-talented tourism industry,
to do so.
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 Tourism Marketing Tourism Marketing
Strategy for Nepal Strategy for Nepal
2005-2020 2005-2020

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

14 15
 Tourism Marketing Tourism Marketing
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
Note: * estimates.
shortening length of stay) have resulted in
significant erosion in NTB's resources, and in particular 3.3 Regional marketing
its resources for marketing. In the first year of the of Nepal
Board's existence 90 percent of its own revenue was Local authorities, even those within the Kathmandu
spent on marketing: By 2004 this figure has slipped Valley, do not have visible tourism marketing
to 61 percent. programmes. Small scale initiative often centred on
festivals are undertaken, and quite successful
In 2003 in recognition of the Board's funding shortfall websites have been developed by tourism
for marketing, and in the light of falling visitor associations such as in Thamel and Pokhara and by
numbers in key markets, His Majesty's Government the laudable Destination Manang campaign. However
provided additional resources, firstly for the a country which is so rich in cultural sites, ethnic variety
Destination Nepal campaign and secondly for and scenic beauty will need in the future to develop
marketing in near Asian markets. Table 7 illustrates an integrated regional tourism strategy if Nepal is to
marketing of Nepal as a tourist destination.
There is a need to create and consistently apply a branded approach to destination marketing.
NTB needs to become more outward looking in its marketing and planning of marketing
(looking to the needs of the international travel trade and the consumer).
Lack of investment in market research is a major concern.
NTB needs to develop marketing partnerships with international tour operators and main
market carriers.
A greater spirit of co-operation and joint marketing needs to be developed in the private sector.
The adoption of a Nepal brand can create an opportunity for this.
The Board's country focus in terms of marketing activities needs to pay greater attention to high
value markets.
An uncertain and under-resourced national tourism marketing budget is a critical barrier to
tourism growth.

16 1
Totem Tourism Marketing 2003 17
 Tourism Marketing
Strategy for Nepal
2005-2020
4 TARGETS FOR
FUTURE GROWTH
4.1 Approach to growth
Because of the need to remedy constraints
identified in chapters 2 and 3, the pool state of
Nepal’s transport infrastructure and the current
unstable political climate, growth projections for
tourism to Nepal are initially quite conservative. They
must take into account the need to remedy product
deficiencies identified in Nepal's Tourism Industry
Strategic Plan2 . The projected growth scenario must
also take into account the time needed to create a
brand image for the destination, and the need for
NTB to adapt its marketing approach in partnership
with the industry and overseas tour operators and
carriers. Tour operators have long pre-planning lead
in times and will need to be persuaded to return to
featuring Nepal.
As a result this marketing strategy is built upon the
following assumptions regarding NTB's marketing focus:
i. The initial scenario is recovery. Nepal's tourism will
build back to its 2000 peak and meeting the targets
set for NTB by His Majesty's Government for 2006.
Special emphasis will be given to India
where better access will be a key to growth. The
foundations laid for future growth in Asia. The Board
will give emphasis to re-establishing contact with
mainstream high value markets in Europe, North
America and Japan. In these markets emphasis will
also be given to marketable product with a strong
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.
poverty reduction agenda. During these years the
foundations will be laid for an expansion of Nepal's
tourism product spatially as pilot areas developed by
TRPAP and NTB begin to emerge.
ii. From 2010 on , it is virtually impossible to make
accurate predictions for growth trends, but the
underlying product strengths of Nepal and the predicted
emergence of its neighbour China as the world's
number one generator and receiver of tourism by 2020,
allow continued positive growth to be anticipated,
provided this market is accurately researched.
iii. Tourism from its southern neighbour India is, and
will remain, by far the most important source of visitors
to Nepal. Within this vast market increasing wealth,
mobility and the desire to travel initially to nearby
places, allow steady growth to be predicted.
iv. The fastest growing tourism region in the world is
the East-Asia/Pacific region, with a recent growth rate
of 8.4 percent and a market share rising to fifteen
percent. (Europe remains the world's most popular
tourism region, but its share is steadily falling and is
now below 60 percent). Strong growth in tourism
between Asian countries is likely to continue,
especially in the East-Asia region. Nepal has already
seen rapid growth from a small base from China, Korea
and, to a lesser extent, Thailand. Indeed, visitor
numbers from China actually rose slightly in 2002.
It is a critical strategic priority to investigate how and
to what extent Nepal can capitalise on this growing
interest.
v. Australia and New Zealand are important markets
and have particular potential during their hot summer
months. Attention will need to be paid to them if growth
is to be optimised.
vi. Recovering tourism growth from foreign markets
further afield (Europe, North America) is a major
challenge. Nepal had a good foothold in these markets
but this has been lost in recent years. However because
of the importance of long haul in terms of potential
visitor spend, these markets need to become the
particular focus of marketing activity. The challenge
and cost of creating new relationships in the face of
mounting competition from other long haul exotic
destinations should not be underestimated.
4.2 Projections of visitor
arrivals and subsequent
employment
The first projected milestone for visitor growth is to
meet the NTB target for 2006 by getting visitor
numbers back to 1999 levels. It is envisaged that the
driver for this growth will be India, which provided 27
percent of all visitors in 2003.
3
SASEC Tourism Plan 2004 (draft) covering Bangladesh, Bhutan, North East India and Nepal, Tourism Resource consultants.
Tourism Marketing
Strategy for Nepal
2005-2020
Nepal's traditional high value markets are the United
Kingdom (UK), Japan, France, German-speaking Europe,
Benelux, North America and Australia-New Zealand.
These provided 40 percent of arrivals in 2003.
Developing markets (China, South East Asia, Southern
Europe and Scandinavian) provided 16 percent of
arrivals in 2003.
By 2009, it is projected that visitor numbers will have
doubled from there 2003 levels, to over 680,000
arrivals, and by 2010 Nepal will have over three
quarters of a million visitors. The Marketing Strategy is
therefore aiming to achieve the higher growth
projection target outlined in the Nepal's Tourism
Nepal's traditional
Industry Strategic Plan 2004-2009. Before this
high value markets
target is reached there are significant are the United
implications in terms of carrying capacity of Kingdom (UK), Japan,
product and spatial development which will France, German-
speaking Europe,
require strategic development planning. Benelux, and North
America.
The target suggested for 2015 is to achieve
over a million visitors and 1.5 million by 2020.
A recent study3 estimates that each tourist to South
Asia supports 3.5 jobs directly and 1.5 jobs indirectly.
Based on this conservative estimate, tourism in Nepal
will support 3.7 million jobs by 2010 and 7.4 million
jobs by 2020.
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
Strategy for Nepal
2005-2020
iv. Other Europe
Other European countries like Spain, Italy, Sweden and
Finland are expected to grow at a rate of 4 percent
until 2006, 6 percent until 2010 and 7 percent
thereafter.
There are no reliable estimates of internal domestic
overnight tourism in Nepal (i.e. bednights created by
residents from within Nepal ), although these are
growing in importance to Nepal's hotel industry In these
circumstances it is not possible to project future
growth, and it is recommended that NTB
The marketing focus carries out research into this segment in 2005.
can help to achieve
spatial spread by
It should be noted that projections are
emphasising the
selected districts' vulnerable on multiple variants such as
product strengths, economic conditions, political developments
provided they have within and outside Nepal and access: Beyond
product that is likely
to meet the needs of 2010 they are highly speculative. It is therefore
the market. essential that figures are treated with caution,
and targets reviewed each year.
4.4 Targets for seasonality
Tourism to Nepal is at present peaked in the March-
April and September-October periods, when the
weather is most pleasant and best for trekking. June-
July-August is the low season due to the annual
monsoon. This has significant implications for the
efficiency of tourism operations and the provision of
full time employment.
Changing this overall pattern is a key challenge, and
the message about Nepal's cooler summer weather
needs to be communicated to key target segments
such as the hot and dusty cities of India's great plain,
and eventually to the sweltering heat of Beijing and
other Chinese cities. Achieving a more even seasonal
spread is therefore a very important consideration for
the marketing strategy.
4.5 Targets for visitor
distribution
At present visitors are concentrated in Kathmandu,
Chitwan and Pokhara areas with secondary areas being
trekking districts like Annapurna and Sagarmartha.
22
Although Kathmandu will remain the hub of visitors to
Nepal, the one of the objectives of a poverty-alleviation
based strategy must be to spread tourism across the
country in a more widely dispersed way. This can be
remarkably difficult, and is of course dependent on
peaceful conditions in new areas and the development
of access infrastructure to them. The marketing focus
can help to achieve spatial spread by emphasizing the
selected districts' product strengths, provided they have
product that is likely to meet the needs of the market.
Pilot areas for tourism dispersal have been identified
by TRPAP and NTB, but a long term strategic visitor
distribution plan based on future road and air transport
development policy, a comprehensive county-wide
audit of potential new product and taking into account
future accommodation needs will be needed in the
medium term.
4.6Inter-Himalayan
tourism
A hidden tourism export for Nepal is the income
earned by Nepal's handling agents for packages to
neighbouring Himalayan countries. In particular to Tibet
this business should be fostered, and the length of
time spent in Nepal en route to other countries
expanded. This must also be addressed in the
marketing strategy. There is however a research gap
in estimating the value of these earning to Nepal's
economy, which NTB research department should
address in co-operation with trekking and other travel
agents.
4.7Visitor bed night and
occupancy targets
Lack of research data into this vital aspect of tourism
development planning nationally and regionally has
hampered the development of targets in this regard. It
is assumed however that occupancy levels nationally
are in the region of 25 percent, indicating that future
accommodation development in Nepal would be
highly speculative until visitor numbers recover. This
low occupancy figure underlines the urgent need for a
more focussed and better funded national tourism
marketing strategy in the future.
Tourism Marketing
Strategy for Nepal
2005-2020
It is recommended that NTB research department in 4.9Monitoring and
partnership with the Hotel Association of Nepal initiate review
an ongoing monthly occupancy survey by region as a The method adopted is based on multiple assumptions
matter of urgency to feed into the development of regarding future growth rates, source markets their
future Tourism Master Plan. economic prosperity, their propensity to visit Nepal and
their ability to be targeted successfully through NTB
4.8 Visitor spend targets marketing. Because of this it is essential that a periodic
Owing to a lack of reliable baseline trend data relating review process is put in place by NTB and
to visitor expenditure by market within Nepal, communicated to the government to ensure that
projections for changes in visitor expenditure have also targets set for the Board remain relevant and realistic.
not been made. The Nepal's Tourism Industry Strategic
Plan highlights urgent need to prepar tourism satellite
accounts for Nepal and TRPAP is planning to assist a
comprehensive visitor expenditure survey in 2004.
4.10 Key issues relating to tourism growth
The marketing strategy will aim to meet the government's target of achieving over half a million
visitors by 2006.
The marketing strategy will aim to double visitor numbers by 2009 and the higher growth
projection option outlined in Nepal's Tourism Industry Strategic Plan will be achieved.
A key objective will be to improve the seasonal and geographic spread of tourism and to
highlight pro-poor tourism product, where marketable.
After 2010 visitor projections are highly speculative and the need for a comprehensive spatial
tourism development and investment strategy is highlighted.
The need for ongoing research into visitor expenditure and regional occupancy is highlighted.
It is estimated that 7.4 million jobs in Nepal could be supported through tourism by 2020.
23
 Tourism Marketing
Strategy for Nepal
2005-2020
5 MARKETING STRATEGY
FOR NEPAL'S TOURISM
INDUSTRY
5.1 General principles
This strategy is based on a phased approach to growth
taking into account the time required to create a fresh
destination image and brand and a recognition that
Nepal's infrastructure and tourism product will require
development as visitor numbers grow.
Initial concentration is placed on the Indian and
developing near Asian markets where there is less
sensitivity to current political difficulties in Nepal. Asian
markets are also seen as important in laying the
foundations for more expansive marketing
programmes in due course. It is vital however to win
back lost business from long haul markets, and the
difficulty of doing this should not be underestimated
as many new trekking destinations now offer strong
competition.
Promotions and packages will be built upon product which
can be reliably delivered to specific target markets.
The tourism scenario envisaged in this marketing
strategy is built upon the commencement of recovery
in 2004. The immediate objective is continued recovery
and consolidation, as Nepal re-establishes contact with
lost markets and adopts a co-ordinated approach to
marketing. Renewed personal contact will be required
with key deliverers of business to Nepal, especially the
trekking operators and group tourism providers.
24
A significant increase in marketing effort is needed to
make the industry more viable. Nepal must create a
tourism brand whose values attract a much wider
clientele than at present.
Whilst the Indian market will remain the most
important numerical or volume market for Nepal,
efforts must be made to genuinely research the needs
of Nepal's other large neighbour, China, so that product
can be put in place to capitalise on the anticipated
significant outbound tourism growth from this market.
South Korea likewise offers some potential.
Selected long haul markets must also be targeted, as
priority must given to these segments which are likely
to give the best returns through spend and length of
stay, and thus added value to the economy.
Markets which can help improve seasonality will be
given priority also.
After 2010 it is very difficult to forecast trends, but it is
envisaged that Nepal, with continued well-planned
marketing and peace, can recapture its former profile
of long term, steady tourism growth.
5.2Overall marketing
objectives
At present Nepal's image as a holiday destination is
under pressure due to violence and political unrest
and from competition due to better resourced
marketing of other destinations in Nepal's key
markets. Nepal is under performing as a tourist
destination. Influencing the image of Nepal through
more effective marketing is therefore critical.
The following three objectives summarise what NTB
will achieve through marketing in partnership with the
industry.
Recover and expand the overall volume and value
of tourism to Nepal, by concentrating on the country's
inherent product strengths, its Himalayan location,
unique culture, climate, history, natural environment
and friendly peoples.
Reposition Nepal firmly as a varied and multi-
faceted destination, with world class cultural tourism
and special interest tourism products, in addition to
reclaiming Nepal's position as one of the world's leading
destination for nature and adventure; and
Improve seasonality and the spatial distribution of
visitors within Nepal and foster the growth of new
tourism areas.
Achieving these objectives will involve restoring
Nepal's image as a peaceful place which is a
fashionable "must see" destination, and achieve
positive growth in visitors from higher-spending long
haul markets.
Tourism Marketing
Strategy for Nepal
2005-2020
It will involve recovering lost ground in main value
markets, and achieving a significant growth in visitors
from near Asian and Australian markets.
It will involve fostering referrals and encouraging repeat
visits to Nepal, both amongst current visitors and
former, aging ones.
It will involve giving priority to marketing products which
can attract visitors in the low reach and encourage
industry incentives for doing so.
It will involve targeting new growth from pilgrimage,
meetings, incentives, conventions and
Nepal must create a
events (MICE), business and sports tourism brand whose
tourists. values attract a
much wider clientele
than at present.
It will involve improving the spatial
distribution of visitors within Nepal through marketing
exposure, and fostering the growth of new tourism
areas, such as those being developed by TRPAP and
NTB.
When these objectives are achieved Nepal will have a
better balanced tourism product, a less peaked
tourism season, and a significantly more viable, multi-
faceted tourism industry which will support greater
employment.
25
 Tourism Marketing
Strategy for Nepal
2005-2020
It will not however be possible to achieve all of these
objectives quickly, and so a phased approach to
marketing is required, both because of marketing
practicalities, the need for training for NTB marketing
staff and also because of the need to plan for an
integrated long term approach to product
development.
5.3 Positioning Nepal
According to initial market research undertaken by
NTB, Nepal's main competitors are those countries
which can offer a similar mountain and cultural
product. Most of these are either in or beyond the
great Himalayan mountain range: Bhutan, China (Tibet
and Yunnan) North India and Pakistan.
Other long haul options are also emerging as serious
competition for the adventurous traveller who
traditionally came to Nepal. Destinations in the Andes
such as Bolivia and Peru are emerging. South Africa
and New Zealand are also making rapid inroads into
the adventure tourism market. China and Central
Asian republics are also beginning to target it.
Market research carried out on Nepal's competitive
The country's unique
selling proposition is
seen as a
combination of
mountains, nature,
friendly people,
cultural diversity and
adventure.
26
positioning carried out in 2001 compared Nepal with a
range of other mountainous destinations (Switzerland,
Austria, Bolivia, New Zealand, Chile) and exotic Asian
ones (Singapore, Malaysia, Tibet, Bhutan, and India).
Key findings were that Nepal compares more favourably
than all of these destinations in the following areas:
friendly people;
good facilities;
adventure travel destination;
wildlife destination;
adventure tourism;
culture (except for Switzerland, which gets an
equal ranking);
pilgrimage;
value for money; and
overall experience.
Nepal does not appear to have that much advantage
over these destinations in terms of
entertainment;
shopping (Singapore is the market-leader here);
exoticism (Thailand is considered more exotic);
nature; and
relaxation.
It is important to note that this was a survey of visitors
to Nepal who are therefore biased by recent
experience. Market research of consumer perceptions
of Nepal in potential markets has not been carried
out, however in 2004 TRPAP assisted a significant
survey of tour operators who feature Nepal. Key
findings in relation to Nepal's competitive position
were that the country's unique selling proposition is
seen as a combination of mountains, nature, friendly
people, cultural diversity and adventure.
5.4 Branding Nepal
Nepal must be distinguished from other exotic,
mountainous destinations in order for it to stand out
on a very competitive market place. This will require
the creation of a "Nepal brand" and its consistent use
by all key players over time. The brand must reflect the
kingdom's core product strengths, and these strengths
must be protected through product development. A
brand is not just a consistent approach to marketing,
critically it must also involve also a consistent
commitment to product delivery. Nepal's core product
strengths are seen as the following:
rich ethnic cultures with world heritage sites still
in actual daily use;
spectacular Himalayan landscapes including
Mount Everest;
pleasant year-round climate;
adventure tourism potential;
rich wildlife and flora;
unique religious traditions;
fine natural attractions including world heritage
sites; and its
welcoming, friendly people.
The brand will incorporate all of these key strengths,
but in order to change Nepal's image from a perceived
trekking and adventure-dominated destination, to the
reality of a living cultural experience, more emphasis
needs to be given to the cultural richness of Nepal.
The brand will also need to recover the image of peace
and calm which Nepal once had.
The actual development of the brand, logo and slogan
for Nepal will require professional design and research
assistance and this has been initiated with assistance
Tourism Marketing
Strategy for Nepal
2005-2020
from TRPAP. The objective is to produce a brand that
will be used by all stakeholders in a consistent way.
5.5Clustering the
product
5.5.1 Marketing starts with the product
Nepal has undoubtedly some of the most scenic
mountainous terrain in the world and is inhabited by
warm and friendly people. It has a pleasant climate
and an abundance of fascinating historical sites of
incredible quality. It can therefore offer an abundance
of products which will attract general and special
interest holiday-makers. Marketing starts with the
product and in order to effectively market so
Five primary product
rich and diverse a product -base to the world, clusters have been
it is necessary to cluster it. identified as follows:
Culture, traditions
and people cluster
Each product cluster will then be marketed
Cities and leisure
by NTB, in partnership with the industry, cluster
through a range of marketing activities Outdoors and
including: adventure cluster
Religion and
public relations and corporate pilgrimage cluster
marketing Nature and wildlife
alliances; cluster
identification and targeting of relevant tour
operators in key markets;
advertising;
travel trade and press familiarisation visitors; and
internet marketing.
1. Five primary product clusters have been
identified as follows:
The role of people and culture in enhancing tourist
experiences in destinations is assuming greater and
greater importance in destination choice. There is
substantial evidence, both empirical and anecdotal,
to suggest that the 'new' traveller is seeking
experiences and cultural contact more and more
and that the actual destination itself is becoming
less important in choosing where to go on holiday.
The people of Nepal have many, varied and
fascinating traditions and cultural festivals. The
product cluster will give emphasis to spatial
27
 Tourism Marketing
Strategy for Nepal
2005-2020
distribution and ethnic diversity. Pro-poor tourism
options including homestay and special interest
product such as study tours, festivals, handicrafts,
village tourism and quality homestay.
City breaks and leisure, relaxation and well-being
products will be clustered together. The basis of the
product will be the historic cities of the Kathmandu
Valley, Pokhara, Janakpur, resorts, health spas,
casinos and other product of specific market
appeal. Shopping, festivals and handicrafts will also
be featured.
This product cluster will include trekking, rambling,
mountaineering, rafting and the wide range of world-
class adventure product which Nepal can offer. It will
include a significant effort to disperse tourism
through regional coverage of emerging tourist areas.
The religion and pilgrimage product cluster will
feature Nepal's flagship religious sites, such as
Lumbini, Pashupati, Swyambhu and Boudnath. It will
also however have a strong element of
NTB will lead the regional dispersal and include reference
industry in specific
to also the ancient religions of Bon,
product based
marketing initiatives festivals, sacred mountains, animist
designed to increase beliefs and Nepal's small Moslem
the economic community. There is an ancient tradition
contribution of
of pilgrimage in Nepal, which saw people
tourism to Nepal's
economy and moving not only to numerous pilgrimage
address seasonality. sites throughout the country, but also
between Tibet and India, usually via the ancient
power places in Kathmandu. The product cluster will
target high end pilgrimage visitors and those who
are more disposed to staying longer in Nepal and
who will combine leisure activities in their visit.
Wildlife and nature tourism has been, and continues
to be, a major driver of inbound tourism to Africa
and this has created a very large consumer base of
potential travellers seeking out this style of travel
along with a very large base of specialist tour
operators servicing the product development,
marketing and sales needs. Both are always on the
constant lookout for new, exciting and rewarding
28
Tourism Marketing
Strategy for Nepal
2005-2020
experiences. NTB will target these specialist facilities in the Convention Centre and four and five folklore;
operators through this product cluster. star hotels would also be needed. Hinduism;
homeopathy, health springs and
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;
of Kathmandu and Mt. Everest makes the identify partners who would be prepared to fund the local customs and festivals;
opportunity for this niche to be marketed establishment of a Nepal Convention Bureau meditation;
compelling. museum studies;
Niche product marketing music and dance;
There are nine national parks, three wildlife There is a wealth of special interest product that painting and art;
reserves, three conservation areas and one hunting Nepal can offer and NTB can play a significant role photography;
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
of Nepal. This product cluster has potential to which special interest groups and societies can be yoga.
address the distribution of tourism within Nepal very targeted in main markets include
effectively. architecture; Sports tourism
ayuruedic spas; Sports tourism including golf have been identified in
5.6Special interest astrology; the draft Nepal's Tourism Industry Strategic Plan as
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
casinos; specialists and attract them to consider Nepal as a
above, NTB will lead the industry in specific product
crafts; destination for inter-regional events. A parallel
based marketing initiatives designed to increase the
ecology studies. events support budget will be needed.
economic contribution of tourism to Nepal's economy
and address seasonality. These will include the
following:
Meetings, incentives, conferences and events
Targeting the MICE market involves highly
specialised marketing techniques and commitment
from specialist incentive agents. There is however
potential to promote Kathmandu and Pokhara (if
direct air access is developed) as conference and
event venues to near Asian markets. Marketing
activity will require the establishment of a Nepal
Convention Bureau within NTB, who's function
would be to track and target conventions happening
in other conference destinations primarily in India,
Thailand, Singapore and Malaysia, and attract them
to Kathmandu. The Bureau would also track and
target international incentive organisers. It would
involve the development of a 'Nepal conference
ambassador' support scheme to encourage
Nepalese academics, senior medical staff and other
conference attenders to invite conferences to
Nepal. Special sales material relating to meeting
29
 Tourism Marketing Tourism Marketing
Strategy for Nepal Strategy for Nepal
2005-2020 2005-2020

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

30 31
 Tourism Marketing Tourism Marketing
Strategy for Nepal Strategy for Nepal
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

32 33
 Tourism Marketing Tourism Marketing
Strategy for Nepal Strategy for Nepal
2005-2020 2005-2020

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

34 35
 Tourism Marketing
Strategy for Nepal
2005-2020
Middle East
In the Middle East NTB and its partners will
foster marketing partnerships with Qatar and Gulf
Airways and their international holiday sales network;
and
Stimulate golf and leisure business targeting the
expatriate and high-end local market.
Korea
In Korea NTB and its partners will
create awareness of Nepal as a quality, value for
money tourism destination and the birthplace of
Lord Buddha; and
foster marketing partnerships with all carriers
serving the market, and their partner travel agents.
Other European Markets
In Spain, Italy and Scandinavian NTB and its partners
will
stimulate awareness of Nepal through the press
and travel trade;
to promote Nepal as the ultimate special interest
destination;
to continue to foster both new and repeat trips to
Nepal; and
build contacts with mainstream tour operators.
Australia-New Zealand
In Australia and New Zealand NTB will
build awareness of Nepal as a holiday destination
with a pleasant year-round climate, particularly
during the hot Australian summer;
work with the travel trade and carriers to promote
Nepal and Nepal+ holidays; and
encourage positive press coverage of Nepal in
Australia and New Zealand.
5.10 Long term marketing
actions 2010-2015
With improvements to infrastructure and product it
will become practical to encourage visitors to explore
36
more of Nepal and stay longer. The opening of better
regional airports will be important in this regard, as
will improvements to the road network. Areas
developed by TRPAP in particular can be marketed
more.
The successful creation of a new Nepal brand, and
growing awareness of Nepal as more than just a
trekking destination, and an on-going commitment to
market research will enable NTB to launch a more
aggressive marketing campaign and to penetrate new
markets, in particular, China. The level of marketing
will be stepped up, exploiting more fully the closer
Asian and capitalising on awareness already created
in all primary markets. Secondary markets will also be
targeted, and the designation of primary and secondary
markets reviewed.
The objectives for the long term marketing strategy
(2010-2015) are as follows:
to continue to build awareness of Nepal as a
"must see" destination in primary markets and to
target additional public relations to keep it
fashionable;
to expand marketing activity in China and South
Korea;
to expand the potential of pilgrimage tourism;
to position Nepal as the ultimate "special
interest" destination, targeting selected special
interest tour operators and specialist societies in
both primary and secondary markets and giving
attention to marketable events;
to expand the menu of potential destinations
within Nepal as access improves; and
to expand marketing partnerships with carriers
and tour operators from all primary markets.
The strategy to achieve these objectives will need to
be evolved with industry partners, in particular with
industry partners in the markets themselves.
Tourism Marketing
Strategy for Nepal
2005-2020
5.11 Key issues in the Marketing Strategy for
Nepal's tourism industry
A significant increase in marketing effort is needed to make Nepal's tourism industry more
viable and increase its economic contribution to the economy.
There are three overall marketing objectives:

To recover and expand the overall volume and value of tourism to Nepal, by concentrating
on the country's inherent product strengths, its Himalayan location, unique culture, climate,
history, natural environment and friendly peoples.

To reposition Nepal firmly as a varied and multi-faceted destination, with world class
cultural tourism and special interest tourism products, in addition to reclaiming Nepal's
position as one of the world's leading destination for nature and adventure; and

To improve the spatial distribution of visitors within Nepal and foster the growth of new
tourism areas.
Nepal's positioning will be based around the variety of product which it can offer in the
Himalayas.
A strong Nepal tourism brand will be developed.
The marketing strategy will focus on five product clusters as follows:

culture, traditions and people;

cities and leisure;

outdoors and adventure;

religion and pilgrimage; and

nature and wildlife.
The marketing mix will include the following:

public relations;

identification and targeting of relevant tour operators in key markets;

advertising;

travel trade and press familiarisation visits; and

nature and wildlife.
Special interest marketing will be introduced targeting meetings, conventions, incentives and
events, niche products and sport.
Key markets to be targeted have been categorised as main volume markets, main value
markets and developing markets.
37
 Tourism Marketing Tourism Marketing
Strategy for Nepal Strategy for Nepal
2005-2020 2005-2020

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

38 39
 Tourism Marketing Tourism Marketing
Strategy for Nepal Strategy for Nepal
2005-2020 2005-2020

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

40 41
 Tourism Marketing Tourism Marketing
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