Nepal tries to solidify signs of recovery by diversifying into eco- and spiritual tourism, but still faces infrastructaure and pollution issues, Marissa Carruthers reports

While 2016 arrivals were still down by 4.7 per cent compared with 2014 figures, Nepal industry members said 2017 is looking bright, with one million international arrivals anticipated.

Last year, the market showed signs of recovery, with a 39.7 per cent increase to 753,002 visiting foreigners. India was the top source market, followed by China, the US, Sri Lanka and the UK.

The devastation caused by the 7.8-magnitude earthquake that hit Nepal on April 25, 2015, saw international visitors slump from 790,118 in 2014 to 554,747 in 2015, according to figures from the Ministry of Immigration.

Despite the earthquake being restricted to 10 of the country’s 75 districts, the damage was felt nationwide. An unofficial blockade along Indian border points coupled with a fuel crisis and trade embargo hit Nepal. Overnight, the country’s tourism trade crashed.

But as the market shows signs of turning around, high hopes have been pinned on the tourism sector.

Suman Pandey, president of PATA Nepal, said: “Things are slowly starting to pick back up. Last year, we were nearly back to the figures before the earthquake and this year looks to be even better, so this is encouraging.”

The country’s recovery was severely hindered by a blanket travel warning on visiting Nepal despite many popular tourist destinations remaining untouched.

Nepal Tourism Board (NTB) CEO, Deepak Raj Joshi, said: “After the earthquake, people assumed it was the whole country. This was very damaging and we directly saw the impact it had on travel.”

Despite suffering no earthquake damage, businesses in popular Pokhara – gateway to the Himalayas – saw tourism tumble. Tejina Malla, assistant sales manager at Shangri-La Village Resort Pokhara, said: “We were not hit physically by the earthquake but we were hit very badly financially, and it’s only now starting to pick back up.”

Initiatives
Hard-hitting marketing campaigns done in major source markets in the aftermath of the disaster, to spread the word that Nepal is safe and open for business, are finally paying off. Intrepid Travel said bookings have jumped 70 per cent this year from 2016, while G Adventures, which offers ecotourism trips, reported a 62 per cent rise – surpassing its 2014 figures.

However, the industry said post-earthquake fears remain a major hurdle. Bharat Kumar Basnet, managing director of Explore Nepal, said: “People across the world thought Nepal is not a safe place to visit and we weren’t able to pass the message to the world that Kathmandu and many other places survived. People need to learn more about Nepal.”

Stepping up its game, the country hosted its first annual Himalayan Travel Mart in June, attracting 74 buyers from 36 countries and more than 50 sellers. And the industry has started to actively sell the country’s other attractions, away from the Himalayas and trekking. Huge efforts are being pumped into developing ecotourism, which is seen by many as a way to elevate the industry.

Shital Chandra Dharel of Himalaya Heart Treks and Expeditions said: “We have much more than the mountains. We have national parks, safaris, wildlife with black rhinos and tigers, more than 60 different ethnic groups, culture and a lot of adventure activities. More is being done now to promote these activities and show that Nepal really is a diverse destination.”

Spiritual tourism is another area that is being actively promoted. Nepal is home to Lumbini, the birthplace of Buddha, and other religious sites, and tour operators are starting to target South-east Asian markets such as Cambodia and Vietnam which have strong Buddhist populations and growing economies.

In June, the Bangkok-based Nepali embassy to Cambodia organised an event in Phnom Penh to promote Buddhist tourist sites and activities in Nepal. And talks about starting direct flights between the two countries began.

Not enough
But concerns have been raised that this alone won’t be enough for Nepal to reach its tourism potential. Infrastructure remains weak, airports are in desperate need of upgrading, more flight paths are essential, as is increased investment in human resources.

Saurav Rajkarnikar, executive director of KGH Hotels, which operates a string of properties in Kathmandu and Pokhara, added: “Pollution is also a big factor that needs to be addressed.”

Political stability is necessary if investment is to be put into overhauling infrastructure and upgrading roads. Nepal’s first democratic elections in 20 years is taking place this year, with the third and final stage in September.

Pushka KC, Peak’s sales manager, said: “We are happy for these elections because we need (Nepal) to be politically stable. We can promote Nepal as a leisure or spiritual destination or whatever, but if we don’t have the infrastructure to get people around, it is no good.”

To cater to the predicted increase in visitors, construction of a new US$216 million international airport in Pokhara started in June. Three kilometres east of the current domestic airport, it is slated for completion by July 2020.

In addition, Gautam Buddha Airport in Bhairahawa, gateway to Lumbini, is set to open in 2019. It is also hoped that the stalled US$92 million improvement of Tribhuvan International Airport in Kathmandu will be unveiled the same year.

While hurdles remain, the industry remains confident  of the country’s potential to achieve two million foreign visitors by 2020.

In Asia, the business of fun is a serious industry as attractions keep up the amusement war through constant reinvention.

Asia has been the hotbed of a theme park rush, with intellectual-property (IP) partnerships on the uptick as destinations the likes of Shanghai Disneyland, Legoland Japan and Malaysia’s Movie Animation Park Studios seek out movie and cartoon producers to create new universes of amusement.

With fun being a serious business in Asia, water playgrounds have also been making a splash. From 2015-2016, visitor volume to water parks in the region climbed 5.4 per cent from 19.5 million to 20.9 million, reported the Themed Entertainment Association (TEA) and AECOM.

To quench the region’s thirst for watery fun, new operators are thronging the market – at least 15 water parks have opened in the last three years in Thailand alone, said Wuthichai Luangamornlert, managing director of Siam Park City, at the Asian Attractions Expo 2017 in Singapore in June.

“We’re seeing a growth in private investment in this new emerging market as tourism spreads from Pattaya, Bangkok and Chiang Mai to the second-tier cities,” observed Wuthichai.

Meanwhile, service supplier WhiteWater Southeast Asia has signed to develop “world-class water parks” in Thailand, Vietnam, Cambodia, Malaysia, the Philippines and Bahrain, said CEO Chris Perry.

Yet, as the competition heats up, the market size is shrinking. In 2015-2016, overall visitor numbers in Asia-Pacific’s top 20 amusement parks dipped 2.8 per cent from 130.9 million to 127.3 million, according to the 2016 TEA/AECOM Theme Index and Museum Index.

The decrease, as outlined in the report, is in part due to more parks opening in China, drawing droves of Chinese visitors to domestic attractions and away from those in neighbouring countries.
Confronted with sliding popularity and a tightening market share, incumbents around Asia are facing a mounting pressure to reinvent.

Fun for the whole family
The key, industry players believe, lies in multigenerational experiences. President and CEO of the International Association of Amusement Parks and Attractions (IAAPA), Paul Noland, observed: “We are seeing parks capitalise on the nostalgia factor. Successive generations like to share experiences that they enjoyed growing up, so the trend is to create high-quality rides that all members of the family can enjoy.”

Wuthichai agreed, adding that family rides generate the most visibility and discussion on social media for Siam Park City, Thailand’s oldest water park.

“The trend is to become more family-oriented, so we’ve invested in rides that the whole family can go on,” said Wuthichai. “We’ve had customers who haven’t visited our park in five years come back.”

Operators also reported that more developers are capitalising on this trend by transforming casino complexes into mixed-use, family-friendly destinations.

According to Ken Wheatley, director of entertainment technology supplier Christie, Macau led the pack in the development of mixed-use integrated resorts, which was soon replicated in the Philippines, South Korea and Singapore.

The latest talk of the town is Okada Manila, a 44ha integrated resort in the Entertainment City gaming strip. The US$2.4 billion project boasts a casino, hotel, dining and shopping outlets, and conference spaces, in addition to a 1.2km-long multimedia show comprising choreographed water, light and music performances.

Such multimedia shows are also gaining traction with operators across Asia, checking off boxes as a multigenerational, sustainable and cost-effective revenue driver, with Marina Bay Sands’ Spectra light-and-water extravaganza by its promenade as a recent example.

“Multimedia presentations help us keep (attractions) current and relevant for the next generation, who come back to experience something old that’s new again,” said Paul Rivet, director of entertainment at Walt Disney Attractions Japan.

Often conducted in the evening, multimedia shows motivate visitors to stay longer at resorts or even overnight, and can drive on-site F&B spending to 15 per cent more, said Jean-Christophe Canizares, chairman and CEO of French multimedia provider ECA2, which developed the Wings of Time show in Sentosa.

They can also be “refreshed easily and changed seasonally”, said Michael Reid, founder of IconPath Curated Experiences.

This is a big selling point – especially for regional parks with smaller budgets – as operators prioritise the “sustained repeatable value” of an attraction, explained Ron Merriman, managing director of MR ProFun China, the company that helmed Ferrari World Abu Dhabi.

While parkgoers may be eager to embrace multimedia extravaganzas, industry experts caution operators against leaning on trending technology as the focal point of the attraction.

“We have to recognise it’s the story and experience that is important. The technology delivers it,” said Darrell Metzger, former CEO of Ocean Park. “We have to be willing to abandon the technology and replace it with whatever it is that can tell your story.

The park battle wages on
As Asia continues to receive new openings and expansions, China is seeing multiple IP projects – including Zhuhai’s Lionsgate Entertainment World and Universal Studios Beijing – in the development pipeline. TEA projects that by 2020, attendance at theme parks in China will surpass those in the US.

While numerous IP-driven developments are in the pipeline across Asia,  countries outside of China may find greater favour in smaller or regional IP projects.

Malaysia and the Philippines were quick to hop on this trend, with the Genting Group’s 20th Century Fox World opening this year-end, and the launch of the DreamWorks-branded DreamPlay attraction in City of Dreams Manila.

Entertainment + Culture Advisors reported that other Asian markets, including Vietnam and South Korea, are in talks to develop integrated resorts with international IP.

Still, Indonesia currently lacks IP attractions, noted David Sutiono, director of Funworld Prima. He added that in order to boost international visitor volume, the country should promote its culture and islands, as it has potential for huge market growth in 10 years or more.

Wuthichai commented: “It can be difficult for major companies to come in because there is no major land mass like the US or China. In my opinion, smaller integrated resorts are the solution.”

On the other hand, Wuthichai is optimistic of Thailand’s theme park potential, as the country received 32.5 million visitors in 2016 and expects an upwards of 34 million this year. The country’s main concern lies in increasing repeat visitations, which will be tackled with continued government investment in man-made attractions over the next five years, he shared.

Elsewhere in Asia, previously untapped markets are emerging into the fore. Said IAAPA’s Noland: “Vietnam has huge growth potential right now, and we also are seeing growth in Malaysia, South Korea and India.”

Lionsgate Entertainment World, China
Scheduled to open by the end of 2018 in Novotown on Hengqin Island in Zhuhai, the 2.2ha indoor park will be themed around Lionsgate’s key franchises, including The Hunger Games, The Twilight Saga, The Divergent Series and Now You See Me. It is developed by Thinkwell Group with consultation by VRTP, which will manage its operations after the opening.

20th Century Fox World, Malaysia
Under the 10-year Genting Integrated Tourism Plan, Genting Group is developing its Outdoor Theme Park into the US$300 million 20th Century Fox World. The 10ha park will feature six themed zones such as Alien vs Predator, Ice Age and Planet of the Apes. It is slated to open later this year.

Universal Studios Beijing, China
Universal Studios’ latest foray is a 405ha destination resort in Tongzhou, Beijing, with a reported US$3.3 billion initial capital investment.A joint venture between Beijing Shouhuan Cultural Tourism Investment and Universal Parks & Resorts, the theme park will feature existing Universal Studio attractions as well as new attractions reflecting China’s cultural heritage, alongside a retail, dining and entertainment district and themed hotels. It is scheduled to open in 2020 or later.

Although lacking direct flights from China, Sarawak could see Chinese inbound tourism take off thanks to new major incentives and partnerships.

Being a relatively late entrant in courting the high-growth China market, Sarawak is playing catch up with other destinations in Malaysia through major tourism partnerships and incentives targeting the Chinese.

As the top medium-haul market, arrivals from China to Malaysia reached a record 2.1 million tourists last year, yet only 38,345 Chinese tourists visited Sarawak. China as a visitor source market ranked fourth for Sarawak, after Brunei, Indonesia and the Philippines.

In the absence of scheduled direct services from China, the state government of Sarawak began offering a free-entry pass for Chinese tourists travelling to the state directly from China on October 30, 2016.

This is to encourage charter services from China to offer connections and provide alternative access to Chinese tourists who use Kuala Lumpur as the main gateway, for whom a single-entry e-visa for up to 30 days costs US$25.

Prior to this development, Chinese tourists visiting Sarawak had to connect through Kuala Lumpur or Kota Kinabalu, making it a challenge to sell the destination to budget-conscious travellers who would favour combining Kuala Lumpur with Langkawi, Penang, Malacca or Johor to avoid additional flight costs, according to Mint Leong, managing director of Sunflower Holidays.

Sarawak Tourism Board (STB) has signed MoU with three charter operators in Wuhan, which will also see the board assist in itinerary planning and fam trips for the media and bloggers.

The NTO is also promoting the destination through consumer advertising and B2B roadshows in China’s first-tier cities, as well as increasing visibility through film tourism with the Filming Support Unit – set up earlier this year – to process film permits from international production houses.

A 100-minute Chinese movie Blue Tears was released in May, with scenes shot in Miri featuring the beach, longhouses and Mulu National Caves.

Sarawak Economic Development Corporation (SEDC) recently entered into an MoU with international Chinese tourism development company, Beijing Glory International Culture Development, to develop the state’s tourism potential and hospitality management.

Under the agreement, Beijing Glory will manage two SEDC hotels, Damai Puri and Grand Margherita, take over the management of tourist attractions such as Bako and Mulu National Park, and make Kuching the South-east Asian hub for China Express Airline.

Gracie Geikie, director of Planet Borneo Consultants, is also providing consultation to a large conglomerate in China looking to develop a retirement village in Kuching comprising recreational facilities and a specialist centre. Once completed in three years’ time, it is expected to attract senior travellers from China.

Meanwhile, the growing force of Chinese FITs and their increasing thirst for diverse travel experiences stand Sarawak in good stead to court this burgeoning market.

“We see two types of Chinese FIT profiles. There are some who extend their stay in Sarawak for three or four days and experience the local food, city, heritage sites and culture,” observed Leong.

The second segment comprises “special interest travellers” who stay longer and seek activities ranging from diving and deep sea fishing off Miri, to visiting longhouses and birdwatching. These are typically millennial travellers who travel in small groups of less than six, she added.

But for Kuching-based Bel-Air Travel and Tours, arrivals from China dropped 30 per cent in the wake of the MH370 incident in 2014, and Hong Kong Airlines’ abrupt suspension of service to Kuching in February after launching in May 2016 further dented its Chinese FIT business – not just from Hong Kong but also from Shenzhen and Guangzhou, said managing director Alice Khor.

She added: “The main challenge in attracting the Chinese market (to Sarawak) is the lack of good beaches and beach activities, which is why the Chinese prefer Sabah.”

However, the opening of Borneo Samariang Resort City, a 202ha integrated resort featuring a water park, safari and 1,000-room hotel will attract more family travellers from South-east Asia and China to Sarawak, Khor said.

Sarawak’s potential to attract the China market has not gone unnoticed by Bandar Seri Begawan-based Freme Travel, which started to package Brunei with Miri early this year to leverage the free-entry pass that also applies to Chinese tourists entering Sarawak overland from Brunei.

Said Sugumaran Nair, manager, inbound & MICE division: “We are encouraged that agents from Shanghai are selling Brunei-Miri combinations, which showcase the cultural aspects of Brunei, and nature tours to Niah Caves and Mulu National Park in Sarawak.”